by Stephen Michael White

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September 17, 2020

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Resources Mentioned on this Episode:

https://bklyner.com/tenants-withhold-rent-from-citys-worst-landlord/

Show Transcription:

Andrew Schultz: (00:00)
Hey everyone. Welcome back to another episode of the Rent Prep for Landlords podcast. This is episode three 29. I’m your host, Andrew Schultz. On today’s episode, we’re going to be talking about New York. City’s worst landlord. When lying on a rental application goes wrong and how to avoid an eviction using cash for keys. We’ll get to all that right after this.

Voice Over: (00:22)
Welcome to the Rent Prep for Landlords podcast. Now your host, Andrew Schultz.

Andrew Schultz: (00:26)
Let’s jump right in with todays in the new segment. This article is coming out of the Bklyner are written by Alex Williamson on September 8th, 2020. So this is relatively recent, Tenants Withhold Rent from City’s Worst Landlord. The property owner who currently holds the title for New York. Citys worst landlord is facing a tenant uprising at one of his distress properties in Crown Heights. Neighbors at 16, 16 president street have banded together on a rent strike refusing to make monthly payments to owner Jason Korn until he makes vital repairs to their building. During a demonstration outside of 16, 16 President Street on August 25th, Angela Robinson who has lived in the building for 18 years, took the megaphone to share her story. The ceiling fell down on me from the bathroom. I had to have surgery on my knees at Robinson adding that once she went eight months without a kitchen sink, my other neighbors were in here.

Andrew Schultz: (01:18)
We’ve all suffered different tragedies inside this building. And we are fed up. Corn was named the city’s worst individual landlord last year by public advocate. Jumaane Williams. I think I’m pronouncing that right whose office publishes an annual list meant to shame the city’s most notorious, alleged slum Lords into providing better living conditions for their tenants. The only landlord in the city ranked worse than corn last year was the New York city housing authority pay attention to this next section because this gives you an idea of just how bad this guy is. His housing provider, corns 15 properties across the city carried an average of 2,877 open violations with the department of housing, preservation, and development, including citations for rodent infestation, mold, heat outages, and lead paint. Jillian Edward said she has encountered each of those hazards since moving into 16, 16 president street in 1995. Temperatures inside her apartment are often frigid in the winter.

Andrew Schultz: (02:14)
Despite frequent calls to three, one, one leaky pipes have led to a proliferation of black mold in her bathroom, which he says the management company, little more management has attempted to address by sending workers to repaint the walls several times per year. According to Edgar’s. She typically has to make multiple complaints before management sends someone over. Even then the repairs usually don’t address the root issues. For instance, the leaky plumbing that causes the mold leading Edgar to feel trapped in a cycle of temporary fixes that soon need to be done. Once again, me personally, I get tired said, Edgar, I know the contractors by their names. They say, how you doing? You alright? Yeah, I enjoy your Christmas. I’m tired of y’all coming in. Vinci barber who moved into the building last year, says her time at 16, 16 president street has been a disaster so far.

Andrew Schultz: (03:00)
She says she couldn’t open her daughter’s bedroom window recently due to the rat infestation in the building’s rear court, an area that’s frequently overflowing with garbage Barbara says she’s made 71 calls to three, one, one to report the rats. The black mold that grows and regrows in her bathroom is especially worrying because of her daughter’s asthma. It’s an issue that’s ongoing. That’s internal. We have to take care of it, but he’s not, but he’s also collecting rent. A judge has to say, no, this is wrong. This is not right. What you’re doing is totally wrong. Said barber. The city’s past efforts to pursue corn and to making repairs at 16 for 16 president street have not been successful in 2018. The building was placed in the city’s underlying conditions program, which deluxe properties with a high number of mold or leak violations for stepped-up enforcement from housing preservation and development.

Andrew Schultz: (03:47)
Only 50 buildings citywide our selector for this program each year, landlords who fail to make the needed repairs can have their pro buildings placed into the HPDs alternative enforcement program, which is exactly what happened to 16, 16 president in 2019, building singled out for alternative enforcement receive more frequent inspections for housing code violations. If landlords don’t make the corrections within four months, the city can perform emergency repairs. Then bill the owner between 200 and 250 buildings across the five boroughs are placed into the program. Each year, while 16, 16 president was discharged for the, from alternative enforcement in 2019, indicating that all immediately hazardous violations and 80% of the violations related to mold had been corrected. The building still has 62 open violations with HPD for issues, including mold, roaches, mice, unsafe wiring, defective front doors and lead paint. Public shaming also hasn’t proven effective.

Andrew Schultz: (04:42)
Corn was ranked ninth on the worst landlords list in 2018, then jumped to the top of the list. The following year, as his properties continued to rack up violations, tenants are hoping that the rent strike will succeed where other measures have failed. Barbara helped to form the buildings tenant association in February and became one of its leaders. When the Coronavirus crisis hit tenants started working with organizers at hope, a neighborhood tenant union, and on May 1st sent a letter, announcing their rent strike to corn, joining dozens of other buildings across the state withholding rent during the pandemic, the rent strike officially began may one, but several units at 16, 16 president street had already stopped paying rent. By that time out of necessity, 17 units in the 24 unit building have officially signed on to the rent strike of the remaining units. At least one is vacant and others are unable to pay rent.

Andrew Schultz: (05:29)
Although not officially participating according to a hope spokesperson while others across New York are striking to protest the injustice of paying rent during an economic and health crisis. The tenants at 16, 16 precedent are attempting to use their collective power to leverage repairs. Although Barbara who lost her job as a nanny and March, when her employers moved away, say the first reason applies as well. It’s a decision that a lot of families are making in this country. As we speak, are they going to eat, have a meal today, or are they going to have shelter? They shouldn’t be worried about that in a pandemic, Ricky, a spokesperson for a little more management who did not wish to provide her last name. So the company has not been able to make repairs at 16, 16 president since the pandemic began because tenants have not allowed workers into their units.

Andrew Schultz: (06:13)
When asked why the list of HPD violation stretches back several years before the onset of the pandemic or the rent strike. She reiterated that even then the problem lied with tenants, denying workers, access to their apartments. It’s a beautiful building and we’re committed to doing the repairs for the tenant. She said Barbara confirmed that the management company has been calling tenants and offering repairs in exchange for rent management, harassing people for their rent. They’ve been calling, but we have a form of saying to the management, we are in a tenant association, we make our decisions. Collectively Arbor said, management has not yet acknowledged the tenant association or the demands laid out in the rent strike letter, which would include common area cleaning, fixing the front door, giving tenants access to security cameras, and generally ceasing the pattern of incomplete shoddy repairs, which inevitably caused tenants to make repeated calls for the same issue.

Andrew Schultz: (07:03)
Cordon could not be reached for comment. The president’s street renters have started meeting with tenants at another court and owned a building nearby at seven 76 crown street, which currently has 102 open HPD violations for issues like mold, bedbugs, mice, and roaches. They’ve hosted the crown street tenants at their weekly meetings and are encouraging them to join the strike and boost their collective bargaining power. After 25 years at 1616 president street and countless calls to three, one, one to report violations and to the management company for repairs, Edgar hopes that the rent strike will be the strategy that finally improves living conditions for herself and her neighbors. This man is getting his money. He’s able to thrive in life, but we should live in inhumane situation because of who we are. He thinks we’re nobody she said, but we’re the people that keep money in your pocket. We deserve some type of respect.

Andrew Schultz: (07:55)
So typically on this podcast, we cover things in a very housing provider, positive way. This article was chosen on purpose to highlight some of the reasons that tenants have issues with landlords. If you’re this kind of housing provider, or if you’re going to be this kind of housing provider, do everyone in this industry, a huge favor and get out of the business. You look at a situation like this, where you have willful neglect to a building for extensive periods of time. This is not a short duration type of a situation where, you know, there was a broken pipe and it caused a whole bunch of damage. This is years and years and years of willful neglect to this building by the property owner. In my opinion, you now have tenants on a rent strike because of the conditions in their building. And I don’t particularly blame them because you have failed to do your job as a housing provider. One of the key things that we’re supposed to be doing as housing providers is offering safe and secure housing to the tenants that we house.

Andrew Schultz: (08:56)
And if you’re not able to do that, you need to get out of the business. It’s as simple as that, there are often financial reasons that repairs don’t get made and things like that, but this is a longterm situation. It doesn’t really appear to be getting any better. At least from the article that we’re reading here. I honestly think that this is a situation where this building owner needs to find someone else to buy the building from them and just exit this industry because they’re not doing anything to improve the industry. At least as near as I can tell, and they’re certainly not doing anything to improve their building. So I really just don’t understand why you would continue to remain in the industry if you have no interest in helping to push the industry forward. So that’s my soap box for this week. A little bit different than how we typically cover it in the news article.

Andrew Schultz: (09:42)
I hope that you guys understand the perspective of where we’re coming from on this. I hope it’s an eyeopener that while most promising providers are not this type of individual. And I think that that’s very evident. I think that most housing providers out there are not just in it for the quick buck. I think most housing providers out there are in it for the longterm and they are in it. And they do want to provide safe and secure housing to their tenants. But you do get people like this who bring the entire industry down. And honestly, it has to stop

Voice Over: (10:18)
Feet on the street. Real stories from real property managers.

Andrew Schultz: (10:26)
This week’s feet on the street comes to us from the Rent Prep for Landlord’s Facebook group. You can find that free resource over at facebook.com/groups/rentprep, where it almost 12,000 members over there. And it’s a great opportunity for you to get perspectives from landlords around the country. On any topic you may be having an issue with, feel free to check that out today. Again, it’s completely free and you can find that over at facebook.com/groups/rentprep. When you go to join the group, you’ll have to answer, I believe three questions. Do me a favor and let them know that you heard about the group from the podcast. It just helps us to track where people are finding us from. So we’re looking at a couple of text messages sent from an applicant to a housing provider, and then from a housing provider back to the applicant, these are text messages that were sent and received during the rental application process.

Andrew Schultz: (11:14)
And it’s pretty evident to me that somebody did not get the employment reference, that they were anticipating text from the applicant. My boss is listed as Shauna Davis, and she said that she did not say anything like that because I work there. I’m really confused because I get up every day and work six to three and make a pretty penny from them response from the housing provider, we contacted the school directly since Shawna was sketchy with her responses. There’s no Shauna Davis that works there. Your friend, Shawna Mosley did who also quote a week ago, good luck with your rental search. So essentially what happened here is someone tried to use a fake employment reference, tried to use a friend, and caught in the process. And it really goes to show you that you have to do the digging when you’re doing your applicant screening, your tenant screening, as part of your pre-lease process, pay stubs are not enough.

Andrew Schultz: (12:07)
Looking at a pay stub is not enough in today’s day and age. They’re very easily faked. There’s a ton of websites out there where you can buy or fake a pay stub. As a matter of fact, we caught a fake pay stub this week on one of our apartments. And we discovered that it was a fake pay stub because we made a call directly to the employer. The information that the employer gave us did not match at all with what was on the pay stub. Unfortunately, some employers will not verify information, which sucks. Some will only verify if somebody works there or not maybe full time or part time, but won’t actually verify any income information, but make the call to the employer directly don’t necessarily trust the phone number that’s on the rental application. A lot of times they’ll use a direct number to a supervisor.

Andrew Schultz: (12:52)
They might use a friend who doesn’t work for the company, something like that. If it’s a bigger company call and ask to speak to their human resources department, if it’s a smaller company where you might be dealing with the person directly, you know, do a Google search, find the main number for the company, and call that way, try to avoid calling the number that’s on the application. Cause like I said, generally speaking, it’s very easy to put a, a cell phone number or a different phone number in there and try to kind of skirt around an employment reference. So definitely go directly to the source whenever possible and ask the questions, verify employment before moving as well. And the reason I say that is because especially right now, things are very, very dynamic in the world and people’s employment situation are a little bit more fluid than they might otherwise be.

Andrew Schultz: (13:37)
So I would definitely verify employment before moving. You know, it might not be a big deal if you screen somebody on Monday and they’re moving in on Friday, you know, you’ve probably already screened them plenty by that point. But if you have somebody that, you know, maybe you screen them in the first week of September, but they’re not moving in until October one the day before moving, you’re going to want to make sure that they still have employment gainful employment, the same as you would want to verify that they’ve turned the utilities on in their name and things like that. So that’s definitely something to keep in mind. It’s not egregious to think to do something like that. Mortgage companies do it every single time they close a mortgage, they will call and get at least a verbal confirmation that that person is still employed by the company, you know, the day of, or the day before closing. So it’s not unrealistic to, to think about doing something like that, but it’s definitely not enough to just look at one pay stub and say, Oh yeah, this person meets my income requirements. You have to do the digging on something like this. Especially in today’s day and age, there are so many different ways that people are trying to game the system. And you have to make sure that the information that you were using to make your decisions is as reliable and as accurate as possible.

Voice Over: (14:48)
Water cooler wisdom, expert advice from real estate pros.

Andrew Schultz: (14:57)
With all the eviction moratoriums and shifting legislation going on throughout the country. Sometimes it’s very difficult to get a bad tenant out of a unit today’s water cooler wisdom comes to us from our Facebook group. Again, facebook.com/groups/rentprep. And it reads as follows in 30 days. I’m closing on a distressed property with non-paying tenants. I’m really not trying to do the whole court proceeding thing, especially right now. And I really need to get them out. What would you do? Would you do cash for keys? And if so, what are your best tips for that? So first I want to discuss what exactly is cash for keys. Cash for keys is a scenario where you give the tenant some amount of cash and they give you possession of the apartment back. It’s typically done in lieu of an eviction and I was first introduced to it back when I was doing a lot more REO, foreclosure work.

Andrew Schultz: (15:50)
What would happen is the banks would offer a certain sum of money to the occupant of the home to be out by X date and assuming that they were out of the property and took all of their stuff out and left it in a broom clean condition. We were authorized to pay them out up to, you know, X amount of dollars for turning the property over. As long as they sign the cash for keys agreement, conveying possession of the property back to in that instance, the bank cash for keys is certainly gaining popularity right now as a good alternative to an eviction. You really do need to understand exactly what it is that you’re doing before you jump into a cash for keys scenario. But I will give you a couple of tips and tricks that I would recommend if this is the route that you’re thinking about going.

Andrew Schultz: (16:36)
So the first thing I would want you to understand is that this is not necessarily something that you can do in every state. You’re going to want to talk to a good landlord-tenant attorney who has done a cash for keys scenario before and understand the ins and outs of how it, how it works. They should have some kind of an agreement that they can assist you with such that the agreement conveys possession of the unit back to you when the tenant leaves it, as long as you give the tenant, the cash that you had agreed upon, this is not something that you want to screw up because if you do screw it up, you could wind up with this tenant still in place, and you’ve now handed them cash and still don’t have possession of your place. So this is not something that you want to screw up.

Andrew Schultz: (17:18)
This is not something where you want to just go download a template off the internet and hope that that’s good enough. You know, spend a little bit of time, spend a little bit of money. If you need to speak to a proper real estate attorney who deals with landlord-tenant issues understands how cash for keys, scenarios work, and can provide you with some kind of an actual agreement that’s been reviewed by an attorney so that you understand that what you’re doing is the correct way to do things. There are a lot of people who are against cash for keys and my recommendation to those people stop get control of your asset, get it generating revenue for you. Again, I understand that swallowing, your pride sucks, but swallowing lost rent every single month sucks a lot more. So cash for keys is one of those scenarios that, yeah, it might not feel good to hand somebody a check when you know that this person already owes you hundreds or thousands of dollars in back rent, but if it gets control of the asset back in your hands, that’s truly what matters.

Andrew Schultz: (18:21)
Because at that point you can begin the process of turning that unit over and finding a paying tenant to put in that scenario or to put in that unit, swallow your pride, do the cash for keys, get possession of your asset back and move on with life. You’ll be so much better off than if you wait and wait and wait for an eviction. Because at this point we’re not doing any evictions for the most part for nonpayment through the end of this year. So that is something to keep in mind. There is a federal eviction moratorium that basically stops a lot of the non-eviction payments through the end of this year. Do you really want to be stuck with that tenant for several more months? Or is it time to swallow your pride and just do a cash for keys scenario? So that is my recommendation for housing providers who are struggling right now and trying to get, you know, non-paying tenants to leave an apartment.

Andrew Schultz: (19:13)
This might be, you know, the golden ticket for you. It may not work. It doesn’t work in all scenarios. A tenant has to want to leave the space before, you know before it will work. And right now, if they know that they’re not going to be able to find another place, you may not be able to get a cash for keys to work, but it is something to consider exploring that pretty much wraps things up for this week’s episode of the Rent Prep for Landlords podcast. Thank you so much for listening. We really do appreciate it. New episode will drop next Thursday. Anywhere podcasts can be heard also over at rentprep.com/podcast. If you’re looking to get in contact with me, I can be reached over at ownbuffalo.com. There’s links to our YouTube and Facebook channels there. Just to reminder, I also run a weekly show every Wednesday, 10:00 AM Eastern that’s live on our Facebook page with replays available both on Facebook and our YouTube page as well. And if you’re looking for excellent tenant screening services, look no further than rent-prep. You can take a look at all the different services that they offer over there as well. Don’t forget to check out the Rent Prep for Landlord’s Facebook group over at facebook.com/groups/rentprep. Make sure you answer the three questions and don’t forget to let them know that you heard about it on the podcast. Again, thank you all so much for listening. I’m Andrew Schultz with own Buffalo for rent-prep, and we’ll see you next week.

Best Tips: Cash for Keys (Podcast #329)

Can you do us a solid?

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