Attorney General James bans predatory landlord from New York real estate business

Raphael Toledano violated the agreement with OAG for
End tenant harassment and illegal business practices

NEW YORK – New York Attorney General Letitia James continued her efforts to protect New York tenants by securing a major court victory against notorious landlord Raphael Toledano barring him from engaging in any real estate activity in New York . A New York Supreme Court order bars Toledano from engaging in any real estate business in New York for at least five years, after which he can ask the court to return. The move comes after Toledano repeatedly violated a 2019 agreement with the Office of the Attorney General (OAG) that required him to stop harassing New York City tenants and to stop engaging in illegal and predatory real estate practices. .

“New York tenants can breathe easier knowing that Rafi Toledano is no longer in the real estate business,” said Attorney General James. “Through his deceitful and unlawful actions, Toledano caused incredible pain and suffering to hundreds of vulnerable families, who still feel the effects of his harassment today. Every New Yorker deserves to live in a safe and decent home, free from abuse and fear. Let this serve as a reminder to New York City owners: any attempt to use illegal and manipulative methods to put profits before people will be met with the full force of my office. »

Attorney General James’ initial investigation established that Toledano engaged in a pattern of fraudulent and unlawful conduct throughout his work as a landlord and property developer. Toledano harassed East Village tenants with coercive take-outs and illegal building practices, and failed to provide its rent-regulated tenants with necessary utilities, repairs, and other services. Toledano has also engaged in deceptive business practices in his real estate dealings, including repeatedly and persistently posing as a lawyer and advertising three- and four-bedroom apartments, when legally the apartment does not Could have only one or two bedrooms.

Under the terms of the 2019 Consent Order (Stipulation and Judgment) negotiated by Attorney General James, Toledano’s real estate business has been ordered to be overseen by an independent monitor to ensure that Toledano ceases to engage in fraud and harassment of tenants. Additionally, Toledano was not allowed direct contact with tenants, had to hire an independent management company for its properties, and had to pay damages and penalties. The June 2019 agreement stated that Toledano could be subject to penalties for breaching the agreement, including a ban from participating in the real estate business, and another suspended judgment of $7 million. While continuing to monitor Toledano, OAG found that he violated the terms of the agreement, including:

  • Not disclosing its real estate business activities to the independent monitor or obtaining the monitor’s approval for other transactions;
  • Divert funds from a reserve account established by the agreement;
  • Failure to pay penalties (other than initial payments totaling $520,000); and
  • Failing to maintain its properties in a manner that complies with applicable laws and protects the rights, health and safety of tenants.

In response to Toledano’s blatant disregard for the provisions set forth in the 2019 agreement, Attorney General James filed a motion seeking enforcement of the consent order’s penalty provisions (including the real estate prohibition) in December 2020. This month, the New York Supreme Court entered a supplemental consent order prohibiting Toledano from any further real estate business activity in New York State (other than activities related to the liquidation of its current portfolio) . Toledano will have to pay OAG an additional $500,000 from sales of its current properties to cover outstanding penalties. Toledano can ask the court for permission to join the New York real estate industry after five years, but only if he has complied with the consent order during that time.

“No one is above the law. We have seen too often this blatant disregard for rent laws in New York and the callous treatment of tenants,” said U.S. Representative Yvette D. Clarke. “Many have recklessly chosen a career in the New York real estate market by engaging in deceptive business practices and taking advantage of unsuspecting tenants. This decision by New York Attorney General Letitia James to bar a bad actor from inflicting further harm on tenants is the right one that sends a strong message: New York will hold accountable anyone who engages in misconduct. illegal which forces people out of their homes for wealthy stockholders and real estate moguls. I wholeheartedly support Attorney General James’ pursuit of housing justice and am grateful for his efforts to protect tenants in New York City.

“This action puts New York landlords on notice – we will not tolerate tenant harassment or any other unlawful behavior,” said State Senator Zellnor Myrie. “I am grateful to Attorney General Letitia James for protecting the rights of tenants.”

“Predatory landlords like Toledano should know by now that New York City and New York State will not tolerate tenant harassment and shady business practices,” said Brooklyn Borough President Antonio Reynoso. “I want to thank Attorney General James and his team for staying vigilant about protecting tenants and taking steps to ensure Toledano doesn’t harm anyone else. I hope this is a lesson for other landlords who think they can get away with treating their tenants this way.

“Landlords like Raphael Toledano, who harass tenants and engage in dishonest business practices, don’t deserve the privilege of continuing to do business in New York City,” said Rita Joseph, New York City Council Member. “I am grateful that Attorney General James was able to ban Toledano from real estate activity in New York, and I look forward to working alongside him in future fights against bad faith landlords.”

“While Toledano’s story and his attempts to use dangerous construction and intimidation to harass and displace rent-regulated tenants were cartoonish, they are all too common in New York’s real estate industry,” said Liam Reilly, housing organizer, Cooper Square Committee. “This settlement is the welcome result of years of committed organizing by Tenants Taking Control (formerly known as the Toledano Tenants’ Coalition), who have been steadfast in their demands for basic conditions of safety and dignity in their homes. since Madison Realty Capital funded Toledano’s run. on the East Village more than 5 years ago. I applaud the example that Attorney General James has set in prohibiting Raphael Toledano from buying more buildings in the city, and hope that this regulation will serve as a wake-up call to show speculative landlords and corporations alike. Real estate investing that when tenants are harassed and fight to voice their concerns, they are heard both at home and in Albany.

“Tenants Taking Control is grateful to Attorney General James for preventing Raphael Toledano from engaging in real estate transactions throughout New York State,” said Liz Haak, a former tenant from Toledano. “In the future, tenants will not have to suffer the harm that Toledano inflicted on us. While he owned 22 buildings, Toledano harassed tenants with in-person visits and phone calls urging acceptance of low-cost buyouts. He managed to intimidate nearly half of the tenants into leaving their apartments, most of them rent-regulated. Toledano sometimes illegally engaged in the wanton destruction of habitable apartments, causing high levels of lead dust. Some buildings had cooking gas and intercom cutouts. All tenants experienced a lack of housekeeping services, exterminator services, and livability guarantees. Our coalition is grateful to Attorney General James for responding to our complaints.

“Tenants are not pawns to be abused and thrown into illegal and lucrative real estate schemes,” said Sandra Mayer, former tenant of Toledano. “At least one evil-doing chess piece has been removed from the chessboard in New York City. On behalf of future tenants who deserve peace in their homes, Tenants Taking Control is extremely grateful to Attorney General Letitia James and her staff for excluding Mr. Toledano.

“Tenants who lived under the Toledano property fought for years to reclaim and keep their homes.” noted Mike Leonard, Supervising Attorney, TakeRoot Justice, who has worked with many tenants of the buildings in Toledano. “Attorney General James stood by them, and it’s a relief to know now that Toledano no longer has the right to be a landlord, that no other tenant will have to go through what he went through.”

“Landlords are often able to harass tenants without any consequences for their actions,” said Michael McKee, Treasurer, Tenants Political Action Committee. “It is high time the government got serious about holding dishonest landlords accountable for their predatory behavior instead of giving them a light slap on the wrist. We thank Attorney General James for setting a powerful example.

This case was handled by Assistant Attorneys General Elena González and Mark Ladov, and Deputy Chief of the Consumer Fraud Bureau Laura Levine, under the supervision of Chief of the Consumer Fraud and Protection Bureau Jane M. Azia and Housing Protection Unit Chief Brent Meltzer. The Fraud and Consumer Protection Bureau is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo, and the Housing Protection Unit is part of the Social Justice Division headed by Deputy -Chief Attorney General for Social Justice Meghan Faux and overseen by First Deputy Attorney General Jennifer Levy.

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