Tenants Of Notorious Village Landlord Get $1M In Rent Credits

VILLAGE, NY — Real estate private equity firm Madison Realty Capital will have to pay more than $1 million to tenants in the Village for knowingly hiring a landlord notorious for harassment and unsafe construction.

Attorney General Letitia James announced Tuesday an agreement that secures over $1 million in rent credits for harassed tenants and provides housing placements for 10 homeless families.

“Today’s agreement stands up for all the tenants harassed and pushed out of their homes by a fraudulent landlord and the lender that financed his unlawful operation,” said Attorney General James in a news release. “Madison Realty Capital aided one of our city’s worst landlords in his unlawful scheme, but we’re holding the company to account and delivering real relief to the many victims through rent credits and housing placement. My office will continue to stand up for tenants who rely on affordable, rent-stabilized housing by stopping dishonest landlords and their unscrupulous financiers dead in their tracks.”

James' investigation uncovered that Madison Realty Capital knew or should have known about Toledano's history before hiring him to manage the East Village Properties.

In 2015, Madison Realty Capital loaned Toledano over $100 million to purchase a 15 buildings in the East Village, which are found on East Fifth, Sixth, Seventh, Ninth, 10th and 12th streets and St. Marks Place, according to the documents.

The loan came despite Toledano's "limited experience managing a portfolio of the size," future plans to vacate rent-stabilized tenants and prior evidence of his tenant harassment, including a lawsuit he settled with tenants on East 13th Street in 2013, according to the documents.

Once Toledano did take over the East Village property management, he went on to harass hundreds of tenants, engage in dangerous construction practices, and failed to provide essential services for people living within the building, according to the attorney general.

Under the agreement, Madison Realty Capital must now take over ownership of the 15 buildings in the East Village portfolio, pay out the $1.05 million in rent credits to tenants, and ensure placement of 10 formerly-homeless families within the buildings.

“We are pleased to have resolved this matter without admitting or denying any of the allegations raised, and will continue to work with the tenants and community stakeholders to continue to improve the buildings and bring positive change to the community," a spokesperson for Madison Realty Capital told Patch.

The agreement is not the first time Madison Realty has been involved in controversy in the Village. Earlier this year, activists protested their plans to demolish a historic building on Fifth Avenue and replace it with a 21-story tower, four times the size of typical buildings on the block.