| Releases
& Statements
FOR
IMMEDIATE RELEASE July 11, 2007
Contact: John Collins
(212) 669-4193; (917) 496-4587
Release #: 034-2007
Community
Leaders, Tenants and Elected Officials Announce Major Lawsuit
Against Corporate Slumlord Pinnacle Group & Landlord Joel
Weiner
- Pinnacle Group, Wiener fraudulently inflate
rents, fail to make needed repairs and groundlessly harass tenants
out of rent-regulated apartments-
- Community calls for creation of an independent body to ensure
lawful management of buildings -
MANHATTAN
– West Harlem community residents today announced a major
lawsuit against the apartment management company Pinnacle Group
and its founder and owner Joel Wiener, claiming they fraudulently
inflate rents, fail to make needed repairs and groundlessly harass
tenants – all as part of a coordinated business strategy
to boost profits and drive middle-income tenants from their apartments.
Pinnacle Group and Wiener own and operate more than 420 apartment
buildings that contain more than 21,000 apartment units and approximately
60,000 tenants in the city.
The
lawsuit, filed today by law firm Jenner & Block, constitutes
a new fight against corporate slumlording and comes at a time
when rising property and rental prices have made it increasingly
difficult for middle class families to find affordable housing
in the city.
The
nine individual tenants from West Harlem and the community group
Buyers and Renters United to Save Harlem (BRUSH) claim that Pinnacle’s
pattern of deceptive consumer-oriented acts and practices violate
the New York State Consumer Protection Act. Additionally, Pinnacle’s
ongoing pattern of fraudulent practices violates the Federal Racketeering
Influenced and Corrupt Organizations Act (RICO), which makes it
unlawful to conduct affairs through a pattern of racketeering
activity.
Public
Advocate Betsy Gotbaum and Manhattan Borough President Scott Stringer
joined to support the community’s efforts to seek, among
other forms of relief, payments for overcharged rents, immediate
injunctive relief to restrain unlawful behavior and the creation
of an independent body to ensure lawful management of buildings.
Pinnacle
and Wiener are financed in part by a six-billion-dollar real estate
investment firm, the Praedium Group, to undertake a self-described
“value enhancement” business strategy, an apparent
policy of harassing tenants to the point of eliminating rent-regulated
units. Included among the list of harassing techniques allegedly
used by Pinnacle and Wiener are:
* Seeking to collect illegal rents based on fraudulent claims
of individual apartment improvements and major capital improvements;
* Failing to make necessary and reasonable repairs to address
housing maintenance code violations;
* Commencing unfounded court proceedings to challenge tenants’
succession rights;
* Unjustifiably refusing to accept tenants’ rent checks
and then claiming non-payment; and
* Directing and encouraging superintendents of its buildings to
make unacceptable and shoddy repairs or make false promises to
conduct repairs.
In fact, regarding the shoddy repairs, the City’s Department
of Housing Preservation and Development (HPD) website currently
lists multiple apartments under Pinnacle management with a slew
of long uncorrected violations, including multiple “impairing”
rent and hazardous violations such as inadequate fire exits, lead-based
paint, and lack of heat and hot water. Many of these hazardous
“Class C” violations have not been addressed for years,
despite the fact that the Housing Maintenance Code requires owners
to correct Class C violations within 24 hours.
Ms.
Wright, a 74-year-old woman who has lived in a Pinnacle-owned
rent-controlled apartment for almost thirty years, had an electrical
fire in her apartment in November 2006. The fire damaged her apartment
to the extent that she was forced to move into a shelter, where
she remained until March 2007. While she was at the shelter, the
property manager told her that the repairs had begun. When she
returned to her apartment, paint and rubbish had been left throughout
the rooms and soot from the fire was still concentrated in various
areas.
Kim Powell, President of BRUSH, said, “The Pinnacle Group
is a parasite, profiting from tenants without giving anything
back to the community. They have amassed thousands of affordable,
rent-controlled units in New York City, victimizing tenants by
illegally inflating rents while reducing the quality of repairs
and services. It’s obvious in the contrast between the inferior
quality of work and materials used in older, occupied apartments
and the newly-renovated units. BRUSH was formed by Pinnacle tenants
to fight back against these kinds of tactics by landlords, and
we intend to hold The Pinnacle Group accountable for their actions.”
Richard
Levy, the lead partner at Jenner & Block, said "Slumlording,
and the attack on affordable housing in New York city are not
new. But the sheer size of the Pinnacle and Wiener assault on
rent regulated units, financed and supported by the $6 billion
Praedium Group and its publicly announced "value enhancement
program" that focuses "on underperforming assets"
provides a serious threat to many of Pinnacle's tenants in particular,
and affordable housing in New York City in general. We have undertaken
this huge effort to do something about that.”
Public
Advocate Gotbaum said, “Unscrupulous landlords mistreating
tenants is nothing new. But we now believe there is a coordinated
practice of harassment and neglect from corporate slumlords across
thousands of apartments in the city. This major lawsuit opens
a new front in the battle to protect tenants. Tenants and families
need to know that they are not alone, and that we will do everything
we can to protect them.”
Manhattan
Borough President Scott Stringer said, “The actions alleged
by this lawsuit are a direct attack on affordable housing. Middle
and low-income residents of Northern Manhattan are among many
others throughout the city who believe that illegal tactics are
being used to drive them out. For all those New Yorkers, whether
dealing with Pinnacle or with some other landlord, this lawsuit
is an important show of resistance, for which BRUSH and Kim Powell
should be applauded.”
The
city clearly faces some challenges when it comes to cracking down
on deadbeat landlords. As of June 2006, HPD had fewer than 40
attorneys in its Housing Litigation Division to deal with the
nearly 13,000 cases it initiated in 2005. Some instances linger
for months or years, meaning that New Yorkers have to go on living
with unsanitary and dangerous conditions, such as leaky ceilings
and apartments overrun with vermin.
The
lawsuit was filed by Jenner & Block, a national law firm with
more than 450 lawyers in offices in New York, Chicago, Dallas,
and Washington, D.C. Jenner & Block lawyers and professionals
spent more than 1,500 hours without charge during the past year
investigating the Pinnacle Group and Joel Wiener, interviewing
tenants and preparing the complaint that was filed today. Last
year Jenner & Block's lawyers devoted more than 50,000 hours
to pro bono representation.
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