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Landlord Steve Croman Will Pay Harassed Tenants Record $8M

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On Wednesday, December 20, New York Attorney General Eric T. Schneiderman announced an unprecedented settlement with Steven Croman, a major New York City landlord, for engaging in illegal conduct, including harassment, coercion, and fraud, to force rent-regulated tenants out of their apartments and convert their apartments into highly profitable market-rate units.

The consent decree requires Croman to pay $8 million into a Tenant Restitution Fund – the largest-ever monetary settlement with an individual landlord. The settlement also requires over 100 Croman residential properties to be run by a new, independent management company with no ties to Croman, for five years – the longest-ever term for independent management in OAG history. Moreover, the settlement requires seven years of a monitor who will oversee compliance with the terms of the consent decree and provide regular reporting to the Attorney General – the longest-ever monitorship required in any tenant harassment case.

Croman is currently serving one year in jail and paid a separate $5 million settlement as a result of criminal charges brought by the Attorney General.

“Over and over again, Steven Croman acted as though he was above the law, putting profits before his tenants’ safety and wellbeing. Earlier this year, we put Mr. Croman in jail for an elaborate scheme that was intended to push out rent-regulated tenants. And today, we’re ensuring tenants get the restitution and protections they deserve – including the largest-ever settlement with an individual landlord, and unprecedented independent management and monitoring at his properties,” said Schneiderman. “New Yorkers are already struggling with high rents. We have zero tolerance for those who try to boost their bottom line by disregarding the welfare of their tenants. My office will continue to ensure that all landlords play by the rules, and aggressively pursue anyone who doesn’t to the fullest extent of the law.”

Eligible tenants will be able to apply for restitution; the Office of the Attorney General (OAG) will announce details of a claims process early next year. Tenants will be eligible for restitution if they are or were a tenant in a rent-stabilized or rent-controlled apartment owned by Croman between July 1, 2011 and the date of the agreement (December 20, 2017); they received a buyout of less than $20,000, not including any amount that purported to cover rent or arrears; and no other tenant in their apartment received money from the restitution fund.

The Attorney General’s office will approve both the independent management company and the monitor. The independent management company will oversee operations and institute new policies at the Croman properties to ensure full compliance with the law and correction of all past violations. It will also post a comprehensive set of Tenants Rights in every building it manages. The monitor will provide quarterly reports to the Attorney General, which will include at minimum any complaints received from tenants and actions taken; the total number of rent-regulated apartments that became deregulated during the reporting period, the reason for deregulation, and all supporting documents; and the monitor’s assessment as to whether Croman has complied with the consent decree.

The consent decree also ensures that Anthony Falconite – another defendant in the Attorney General’s lawsuit whom Croman allegedly referred to as his “secret weapon” in intimidating rent-regulated tenants – will have no interaction with any Croman tenants.

In addition to the $8 million Tenant Restitution Fund, Croman is responsible for covering the costs of the management company and monitor, as well as any outstanding government fines.

By Mark Snyder

 

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