Saturday, December 18, 2004

Invest In a Fixer-Upper, Renovate, Find a NY Giant To Rent It...

And learn all about the perils of New York City's housing courts:

BERRYL FOX, a psychologist and a widow with a young son, thought she had found the perfect tenants for the top three floors of her brownstone on West 90th Street, just a few steps from Riverside Drive.

The tenant, Peter Hall, was a former professional football player in his 60's who charmed everyone around him and talked of a private trust and financial dealings across Europe and the Middle East. His wife, Anne Torselius Hall, 40, meticulously supervised renovations, even offering to share the cost of building a roof deck.

....The Halls signed a one-year lease in April 2003 and agreed to pay $5,800 a month, at a time when luxury rents had tumbled sharply and good tenants were hard to find. Dr. Fox, who lived on the bottom two floors, needed that rent to meet her monthly mortgage payments.

But after a few months, the Halls began paying their rent late, and after six months they stopped paying altogether, according to court papers. Dr. Fox was about to discover that despite their charms, the Halls were every landlord's worst nightmare - tenants unusually skilled at delaying and evading the perils of eviction.

....Now, more than a year since their last rent payment, after a series of broken promises, three bankruptcy filings, four eviction notices, a mysterious foreign bank draft that took two months to clear and then was not honored, the Halls are still in residence at West 90th Street, along with three children (they recently had another boy, an event cited as an explanation for a delay in a court filing), two dogs and three large birds.

They owe $81,000 in back rent, or close to $100,000 if Dr. Fox's legal fees are included, while Dr. Fox had to take out a home equity loan to help cover expenses. And that doesn't include the $10,000 she agreed to spend on improvements to the rental apartment, including a new oak dining room floor, when the lease was signed.

At a hearing last Tuesday, Judge Sheldon J. Halprin of Housing Court in Manhattan lifted a stay and once again cleared the way for an eviction within 48 hours. Outside the courtroom, Dr. Fox's lawyer, Jeffrey Klarsfeld, was not celebrating. "It's not over," he said. And the lawyer for the Halls, Maria M. Malave, said that she was confident that any eviction threat would be postponed until after New Year's Day at the earliest, because marshals halt evictions during the week before Christmas.

"Housing Court is supposed to protect poor rent-regulated tenants from rich landlords," Dr. Fox said. "Here we have a struggling landlord being victimized in Housing Court by rich tenants who know how to use the system."

....It was only after her troubles began that Dr. Fox learned that the Halls had a long history in court, including prior evictions from high-rent apartments, and multiple bankruptcy filings apparently timed to avoid evictions. Over the years, court records show, Mr. Hall had been accused of participating in fraudulent multimillion-dollar investment schemes including the use of fake letters of credit, but the cases were dropped.

....Dr. Fox filed suit in April 2004, and although she has won favorable rulings in court, has not gotten any money or her rental apartment back. After a series of postponements sought by the Halls, Dr. Fox won an eviction order at the end of July, and eviction was scheduled for mid-August. But the day before the eviction, Mr. Hall filed for bankruptcy in federal court, a move that automatically stayed the eviction.

In late September, Dr. Fox's lawyers were permitted by bankruptcy court to resume the eviction, and it was rescheduled for October. But a few days before the new eviction date, Ms. Hall filed for bankruptcy, too, delaying the eviction until mid-November.

Both bankruptcy filings were eventually dismissed by the court. ....

A city marshal was scheduled to carry out the eviction at 12:30 p.m. on Thursday. But, at 10:04 p.m. on Wednesday, the Federal Bankruptcy Court in Manhattan received an electronic filing in which someone else, Eleke Emeh, filed a bankruptcy petition, listing the Halls' apartment as an address. When the marshal was notified the next morning, the eviction was halted.

Dr. Fox and her lawyer said that they were certain the stay in the eviction would be lifted - but only after a hearing can be scheduled before the bankruptcy judge, during or after the busy holiday season. But they worry that the case won't end there.

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