Attorney General Secures $1M in Rent Credits for Harassed Tenants
New York Attorney General Letitia James recently announced an agreement that secures more than $1 million in rent credits for harassed tenants and provides housing placements for 10 homeless families. The agreement with private equity firm Madison Realty Capital comes after Attorney General James found that the company aided and abetted tenant harassment and other fraud by notorious landlord Raphael (Rafi) Toledano.
With the financial backing of Madison Realty Capital, Toledano harassed tenants through coercive buyouts; executed illegal construction practices; and failed to provide tenants with utilities, repairs, and other necessary services. According to the Attorney General’s office, even with this track record, in 2015, Madison Realty loaned Toledano over $100 million to purchase a 15-building portfolio in the East Village, despite his limited experience in managing a portfolio of this size, evidence of prior tenant harassment, and plans to continue to vacate rent-stabilized tenants and renovate units in violation of the law.
The investigation found that Madison Realty Capital knew or should have known of Toledano’s history, that the proposed conversions were unlawful, and that the aggressive schedule for buyouts and renovations was likely to result in tenant harassment. Under the terms of this agreement, Madison Realty Capital must now take ownership of the 15 buildings in the East Village portfolio subject to $1.05 million in rent credits. These rent credits will be shared among the remaining tenants who suffered through Toledano’s mismanagement of these properties. The owners of the buildings will also ensure placement of 10 formerly homeless families and will adhere to Tenant Health and Safety Protections during construction there.