James bans predatory landlord from real estate business

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New York State Attorney General, Letitia James.
Associated Press / Richard Drew/File

New York Attorney General Letitia James continued efforts to protect New York tenants by securing a major court victory against notorious landlord, Raphael Toledano, banning him from engaging in any real estate activity in New York.

An order by the New York Supreme Court bars Toledano from engaging in any New York real estate business activity for at least five years, at which point he can petition the court for reentrance.

This decision 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 stop engaging in illegal and predatory real estate practices.

“New York tenants can breathe more easily knowing that Rafi Toledano is no longer in the real estate business,” James said. “Through his deceptive and illegal actions, Toledano caused incredible pain and suffering to hundreds of vulnerable families, who are still feeling the effects of his harassment today.

“Every New Yorker deserves to live in a safe, decent home free of abuse and fear,” she added. “Let this serve as a reminder to New York landlords: Any attempt to use illegal, manipulative methods to put profits over people will be met with the full force of my office.”

James’ original investigation established that Toledano engaged in a pattern of fraudulent and illegal conduct throughout his work as a landlord and real estate developer.

She said Toledano harassed tenants in the East Village through coercive buyouts and illegal construction practices, and failed to provide his rent-regulated tenants with utilities, repairs and other necessary services.

The attorney general said Toledano also engaged in deceptive business practices in his real estate transactions, including repeatedly and persistently misrepresenting himself as a lawyer, and advertising apartments with three or four bedrooms, when legally the apartment could have one or two bedrooms only.

Under the terms of the 2019 Consent Order (stipulation and judgment) negotiated by Attorney General James, Toledano’s real estate business was ordered to be supervised by an independent monitor to ensure that Toledano stopped engaging in fraud and tenant harassment.

Additionally, Toledano was not allowed to have any direct contact with tenants, required to hire an independent management company for his properties, and required to pay damages and penalties.

The June 2019 agreement stipulated that Toledano could be subject to penalties for violating the agreement, including a ban against participating in the real estate business, and a further suspended judgment of $7 million.

While continuing to monitor Toledano, the OAG found that he was violating the terms of the agreement, including: Failing to disclose his real estate business activities to the independent monitor, or to get the monitor’s approval for further deals; diverting funds from a reserve account established by the agreement; and failing to make penalty payments other than initial payments totaling $520,000.

In addition, the OAG said Toledano failed to maintain his properties in a manner that complied with applicable laws and protected tenants’ rights, health and safety.

In response to Toledano’s blatant disregard for the provisions laid out in the 2019 agreement, Attorney General James filed a motion seeking enforcement of the consent order’s penalty provisions, including the real estate ban, in December 2020.

In January, the New York Supreme Court entered a supplemental consent order barring Toledano from any further real estate business activity in New York state other than activities relating to the liquidation of his current portfolio.

James said Toledano will be required to pay OAG an additional $500,000 from the sales of his current properties to cover past-due penalties.

She said Toledano may petition the court for permission to rejoin the New York real estate industry after five years, but only if he has shown compliance with the consent order during that time.

“No one is above the law. We have seen this blatant disregard for New York rent laws and callous treatment of tenants far too often,” said Caribbean American Democratic Congresswoman Yvette D. Clarke, the daughter of Jamaican immigrants.

“Many have unwisely chosen to make a career in New York’s real estate market by engaging in deceptive business practices and taking advantage of unsuspecting renters,” added the representative for the 9th Congressional District in Brooklyn.

“This decision by New York Attorney General Letitia James to ban a bad actor from inflicting more harm to tenants is the right one that sends a strong message: New York will hold accountable anyone that engages in illegal conduct that forces people out of their homes for the sake of wealthy stakeholders and real estate tycoons,” Clarke continued. “I wholeheartedly support Attorney General James’ pursuit of housing justice and am grateful for her efforts to protect New York tenants.”

“This action puts New York landlords on notice — we will not tolerate tenant harassment or other illegal behavior,” said State Sen. Zellnor Myrie, representative for the 20th Senate District in Brooklyn, whose grandmother hailed from Jamaica. “I’m grateful to Attorney General Letitia James for safeguarding the rights of tenants.”

“Predatory landlords like Toledano should know by now that New York City and New York state won’t tolerate tenant harassment and shady business practices,” said Brooklyn Borough President Antonio Reynoso. “I want to thank Attorney General James and her team for staying vigilant about protecting tenants and taking action to ensure that Toledano doesn’t harm anyone else. I hope this is a lesson to 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 practice, do not deserve the privilege of continuing to conduct business in New York,” said newly-elected New York City Council Member Rita Joseph.

“I’m thankful that Attorney General James was able to ban Toledano from New York real estate activity, and I’m eager to work alongside her in future fights against bad-faith landlords,” added Joseph, the Haitian-born representative for the 45th Council District in Brooklyn.

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