Thursday, July 12, 2007

In Suit Against Landlord, Tenants Make Unusual Accusation: Racketeering

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Subject: In Suit Against Landlord, Tenants Make Unusual Accusation: Racketeering

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Respective Chairpersons: This has been a monumental week for me starting with the Public Hearing on Tuesday and yesterday, today and tomorrow with the filing of the lawsuit in the Southern District and the press conferences. We tries to talk to this man but he is intractable so we filed. The tenants seem happy that someone is finally fighting for them...let's see what happens next. Onward and upward

NEW YORK REGION July 12, 2007 In Suit Against Landlord, Tenants Make Unusual Accusation: Racketeering By TIMOTHY WILLIAMS A group of tenants in a federal lawsuit accused one of the city’s fastest-growing residential landlords of harassment, fraud, rent overcharges and illegal evictions.

N.Y. / Region

In Suit Against Landlord, Tenants Make Unusual Accusation: Racketeering

Published: July 12, 2007

A group of tenants filed a federal racketeering lawsuit against one of the city’s fastest-growing residential landlords yesterday, accusing it of harassment, fraud, rent overcharges and illegal evictions.

The suit, filed in Federal District Court in Manhattan, contends that the landlord, the Pinnacle Group, and its owner, Joel Weiner, systematically evicted tenants to raise rents in apartments throughout the city, but primarily in units concentrated in Harlem, Washington Heights and the Bronx.

Because Pinnacle owns several thousand apartment units in those areas — most of them bought during the past four years — tenants and their lawyers said the company’s actions constituted an attack on rent-regulated housing in some of Manhattan’s few remaining working-class neighborhoods.

Pinnacle has acknowledged sending out some 5,000 letters, called dispossess notices, to tenants in about a quarter of its 21,000 units during a 29-month period from 2004 through 2006, citing nonpayment of rent, invalid line of succession for occupancy and other violations; however, it said only a few hundred people had actually been evicted. Issuing a dispossess notice is a legal requirement before an eviction can take place. The company said that its rate of eviction was below the industry average.

Pinnacle representatives said yesterday that data on evictions since 2006 were not available.
In a statement yesterday responding to the lawsuit, Kenneth K. Fisher, a lawyer and former city councilman who is representing Pinnacle, said that the company had not violated any laws.
“Pinnacle is proud of its record of providing safe and affordable housing for thousands of New York families, and we are confident that this lawsuit, which was released to the press before being served on us, will be found to be without merit,” the statement read.

The lawsuit — filed by several individual Pinnacle tenants along with a tenants’ group, Buyers and Renters United to Save Harlem, made up largely of Pinnacle tenants — is unusual in that it accuses Pinnacle of engaging in racketeering, including using the federal postal system and interstate wires as “part of an ongoing scheme to increase rents unlawfully, to receive illegal rents and ultimately, to free their properties from New York’s rent control and rent stabilization requirements.”

Racketeering allegations are more commonly used by the federal government to prosecute organized crime figures and drug traffickers.

The suit also contends that Pinnacle has intimidated tenants through threatened evictions and claimed to make building repairs and improvements that had never been made. The company has acknowledged in the past that it improperly passed on costs of repairs and apartment upgrades to new tenants, but said they were isolated mistakes.

Last year, both the state attorney general’s office and the Manhattan district attorney’s office began investigations into the company after receiving numerous complaints from tenants and elected officials.

In December, Pinnacle reached a settlement with the state in which it admitted no wrongdoing but agreed to hire an auditor to analyze its rents. The district attorney’s investigation is continuing, officials said.

Richard F. Levy, a senior partner at Jenner & Block, who is representing the tenants pro bono, said the firm filed the lawsuit against Pinnacle after conducting its own yearlong investigation.
Andres Mares-Muro, a Pinnacle tenant who is a plaintiff in the suit, said he had recently learned that the rent on his Harlem apartment, $1,275, was almost double that of the previous tenant, $648. “In this supposedly rent-stabilized unit, we are paying market rate,” he said.

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