In this article I am going to stray from the wacky landlords to some of the situations that we had with City employees and the courts. There are thousands of dedicated City employees that do their best to make things work for the tenants without making the situation impossible for the Landlords. They recognize that the Landlords, to continue investing in the various communities, must be able to make money. They also recognize that there are Landlords who will take what they can at the expense of the Tenants as long as they can. Occasionally, and I believe rarely, there are City employees that take advantage of this situation depending on a Landlord’s fears, especially a good Landlord. This is where our story starts. In the late 1980s, we had just purchased a property in a lower middle -income neighborhood in Brooklyn, from a bank that was about to foreclose on the property, but had the agreement of the owner/debtor, that they could sell the building and avoid the costs of a court foreclosure. The building was a beautiful small elevator building with 42 apartments. The problem was that it had over 400 violations issued by both the Housing and the Building departments. Many were serious violations, such as not providing heat and dangerous elevator violations. As we had in all of our acquisitions, we had the capital resources to make the improvements necessary to bring the building to the condition that the Tenants were entitled to have.
As this acquisition occurred early in our growth, we were not yet known to the City or the City employees. As we took control, a building inspector appeared and to perform an inspection. While he inspected the property with our superintendent, our field agent happened to arrive at the building for his weekly inspection. He met up with the inspector and the Superintendent. Our agent told the inspector of our improvement plans and the inspector appeared pleased. He told our agent that he would like to come back and meet with him privately to discuss our plans. The agent told my partner and I about this conversation, which he felt to be suspicious and that he had agreed to meet with him at the property the following week. My partner and I also felt that there was something wrong. Both of us being attorneys felt that we should contact the Building Department attorneys’ office and ask if this was acceptable practice. The attorney took the information and agreed to get back to us. Apparently, he discussed the matter with their internal investigators, who actually had their own concerns about this particular City employee. They came to our office to speak with us and our agent. They asked our agent if he would meet with the City inspector wearing a wire. We felt this was a bridge too far to put on our own employee, but, he seemed anxious to do it, especially with the fact in his mind that he deals with these inspectors every day and if corruption is allowed to exist, his job and the lives of Tenants and Landlords would be miserable.
The meeting between our agent and the inspector was set. When he arrived at the building, he was aware that City investigators would be nearby listening in to the conversation. We were in our office unaware of the events as they occurred. When the agent arrived at the building, the inspector said he wanted to meet on the roof so they could have privacy. When we heard this after the fact, we were stunned that our agent agreed and went with him to the roof. What happened, was what we all expected. The City inspector asked for a payoff for which in return 100s of violations would be removed and new violations avoided. When the meeting was finished and our agent said he would discuss with his boss and would meet again in a week, they proceeded to leave the building. They were met by City investigators who took the inspector into custody. Although he was not criminally charged, the inspector was fired, lost his pension and was banned from working for the City forever. I do not think the punishment was strong enough, but I understand the fact that a criminal case would be hard with only one conversation taped and that the City wanted to send a message quickly.
On the subject of violations, there were two humorous incidents that I can quickly describe. Prior to going on my own, the individual I worked for owned an SRO (Single Room Occupancy Hotel). (This hotel now gone, torn down and replaced with a high-rise is another story I will discuss in a future article). Located in the West 20s the property was always of interest to City inspectors due to the fact that the occupants were generally unemployed men, many of whom would beg on the street. In any event, showing the sometimes inefficiency of City Inspectors, we received two violations within about ten days of each other. One stated that the fire escape staircase was rusty and needed to be repainted. The other violation stated that we did not have a fire escape that was required by law. My staff member that handled violations, went to the Housing Department and stood before one of the Supervisory Inspector and asked, “how he can paint the non-existent fire escape.” Upon his assurance that he would paint the fire escape they removed both violations.
Sometimes the inspectors would err in their entry of violations in what was an early version of computer programs. Very standard violations were:
“Replace with new, paint and plaster”
“Eliminate infestation of mice and roaches”
We received a violation as follows:
“Replace with new mice and roaches”