It looked like justice had been served.
Last October, the city Department of Housing Preservation and Development announced that a warrant had been issued for the arrest of James Caban, a Bronx landlord so negligent that the agency regularly delivered fuel to a building he owned just so tenants could have hot water.
At the behest of lawyers for the city agency, a housing court judge sentenced Caban to 30 days in jail — a rarely invoked punishment.
HPD showcased Caban’s fate as a warning sign for other landlords.
“If you neglect your property and your tenants, disregard your legal responsibilities and defy court orders we will seek the maximum penalties available under the law,” then–HPD Commissioner RuthAnne Visnauskas said in a statement announcing the arrest.
“Unfortunately Mr. Caban is finding that out the hard way, but in reality it is his tenants who suffer the most, and it is the welfare of his tenants that is our overriding concern.”
But Caban walked out of jail a free man after less than two weeks.
And now, with tenants still living in dismal conditions, the run-down 12-apartment building is going up for auction to the highest bidder, with no guarantees that a new owner will undertake the extensive repairs the building needs.
The saga of the shabby structure at 1547 Commonwealth Ave. reveals much about the limits of city government’s power to rein in bad landlords.
Under Caban’s ownership, 1547 Commonwealth racked up hundreds of serious housing code violations and ended up in a sort of intensive care for the city’s most troubled apartment buildings, called the Alternative Enforcement Program.
By the time Caban went to jail, work crews brought in by HPD had repaired some of the worst damage, sending the bills to Commonwealth Realty Group LLC, the company through which Caban owns the property. Commonwealth has racked up nearly $300,000 in unpaid repair charges and fees owed to HPD, plus interest.
Yet conditions remained so dire that visitors to the building were greeted with a rat carcass and vermin in the entryway. The building entrance’s walls and ceiling are cracked, as are the walls and ceilings of several apartments.
“Rats killed my mother’s dog,” said David Perez, whose family has lived in the building for 32 years.
Caban did not respond to repeated requests for comment. He told a housing court judge that he did not have funds to make repairs, a claim that the judge rejected.
Caban was able to get out of jail early after Commonwealth Realty declared Chapter 11 bankruptcy. By the time Caban went behind bars, the real estate was in the hands of a trustee charged with auctioning it off to the highest bidder. Caban’s lawyer successfully argued that Caban no longer had the legal power to make repairs to the building — and after that, the landlord was sprung from his cell.
HPD has not recorded significant repairs to the building, aside from the emergency fixes its own crews had made.
A new management company was brought in by the trustee for the bankruptcy case, which is being heard in the U.S. Bankruptcy Court for the Southern District of New York. The trustee informed the judge last month that he “does not have the resources to make the substantial repairs needed and perform basic maintenance.”
The property manager, who bills $225 an hour, will be auctioning the building on April 29. As-is.
Not his only building
Commonwealth Realty Corp. bought the Commonwealth Ave. building in 2000 with a $420,000 mortgage from the building’s seller. Documents for the buyer were signed by Sergio Conde, then an NYPD officer on Mayor Rudolph Giuliani’s security detail. Caban, too, is a former cop, who resigned from the force after locking up a taxi driver he believed had stolen from his wife’s purse.
In 2003 ownership transferred to Caban’s Commonwealth Realty Group LLC in what the deed noted as a “mere change of identity,” costing nothing to the buyer. Commonwealth Realty Group LLC refinanced with Ridgewood Savings Bank for $600,000.
It was not Caban’s first building — nor the only one to fall into dangerous disrepair.
Caban was the landlord of at least two other Bronx apartment buildings also riddled with housing code violations. He sold both for substantially more than the prices he had paid to buy them.
His company Double Image Realty Corp. bought 424 East 162nd Street for $140,000 in 1997, and sold it seven years later for $510,000. In between, it was taken to court by HPD in 2002 and again in 2004 for housing code violations. Double Image received two judgments totaling more than $30,000.
Caban bought an adjacent building for $130,000, and barely escaped foreclosure for nonpayment of taxes. He ultimately sold that building for $625,000, but not before being taken to court by HPD. A judge ordered the Caban company that owned the building, Double Trouble Realty Corp., to pay $18,000 in penalties for housing code violations.
The story repeated itself on Commonwealth Ave., where It took 10 years and at least two dozen housing court actions filed by tenants and HPD lawyers to get Caban to his brief stint in jail. But this time, instead of selling, he held on to the building as it decayed.
“I can’t say that I’m happy, but he is a bad landlord,” said resident Annie Hernandez not long after Caban was arrested.
Hernandez is a stay-at-home mom who recently moved into the building with her grandmother, a longtime tenant. “For years now he’s not been fixing anything. The apartments are infested. We have mold and it’s affecting my 2-year-old son’s breathing.”
Inez Perez, David’s mother, said it was HPD, not the landlord, that bought her a new door when her old one broke.
Apartment rents range from about $400 to $1,300. Several tenants said they sometimes withheld rent in order to pressure Caban into making repairs.
Esmeralda Osorio did not pay rent for August or September 2013 because she did not have hot water. “He finally fixed it and I gave him a check for the two months and for October,” she said. “I told him, ‘I don’t want to see you until November.’”
Osorio took Caban to housing court in 2011 for failing to get rid of mold in her apartment or fix a crack in her bathroom ceiling. Records show that the judge ruled in her favor.
At least three other tenants also sought rulings from housing court to force Caban to maintain the building. When he made any repairs, the tenants said, he addressed only the specific housing code violations covered by the judge’s order — nothing else.
“We suffer in the winter. We get no heat, no hot water,” said Osorio. “There was a whole week last year when we didn’t have either.” Osorio now resorts to calling 311, and she records in a notebook every single complaint she makes.
HPD records show 1547 Commonwealth Ave. tenants made 415 complaints from November 3, 2012, to March 31, 2014, citing issues from roaches and rats and no heat or hot water, to holes in the ceiling and leaks.
Out of 227 remaining unresolved housing code violations, 63 are Class C, meaning they are “immediately hazardous.” Thanks to HPD’s contractors, that’s substantially lower than the 313 open violations before Caban went to jail.
Tenants have not been alone in their fight against Commonwealth Realty Group. Since 2005, HPD attorneys have filed 19 housing court cases against Caban or Commonwealth Realty, either on their own or on behalf of a tenant.
Its long trail of violations brought 1547 Commonwealth into the special Alternative Enforcement Program, which each year targets 200 of the city’s most decrepit residential buildings for corrective action. Under the program, HPD issued an order calling on Caban to replace or repair the roof, electrical systems and other items. It paid for fuel to keep the building heated.
When Caban didn’t comply, it brought him to court, where he signed an agreement promising to correct all outstanding violations.
None of it worked. Housing Court Judge Jerald Klein found Caban in contempt and hit him with $500,000 in fines — and then an arrest warrant.
Prospective buyer once on worst-landlord watchlist
The Commonwealth Ave. building is set to go to auction April 29. The tenants now face a future with a new landlord — and their most immediate prospect has a record that’s far from unblemished.
“The irony is that the tenants, who have the most stake, get the least say in this,” said Marc Landis, a real estate attorney who has served as a court-appointed caretaker for troubled Bronx apartment buildings.
On deck as a minimum-bid buyer, offering $650,000 cash, is Keyoumars Keypour, a Long Island–based landlord who owns or manages numerous Bronx buildings. He, too, has been on the receiving end of summonses to housing and civil court, filed by tenants and by HPD lawyers.
Keypour declined to comment for this story.
In one building under Keypour’s management, a ceiling collapsed because of flooding from an upstairs toilet, knocking a tenant to the floor and leading her to sue for alleged back injuries. (Her lawsuit is still ongoing.) The building’s insurance company has refused to provide coverage because management failed to report the incident.
In another building he manages, at 2800 Sedgwick Ave., the New York City Housing Authority suspended payments for two tenants’ Section 8 housing vouchers after the authority determined in 2011 that the apartments were not up to program standards. The vouchers were later reinstated.
Keypour owns some of the properties he manages, including 874 Longwood Ave., where tenants say heat and hot water were both sporadic this winter. Lawyers for HPD took Keypour to housing court in 2012 after a man identifying himself as the super refused to let in a crew to repair a cascading water leak first reported months earlier. The leak was fixed.
In 2012, Keypour ended up on then-Public Advocate Bill de Blasio’s “worst landlord watchlist” for a building he managed across the street at the time, at 871 Longwood.
His buildings’ problems aren’t just in the past. A building where Keypour is registered as the head officer and managing agent, at 2170 Ryer Ave., currently has a 118 open housing code violations, 28 of them classified as “immediately hazardous,” including lead paint.
HPD’s contractors have continued to maintain the building on Commonwealth Ave. that Keypour now intends to buy. They have repaired a bathroom shower and bring in heating fuel each month. The city agency paid Con Ed to keep the electricity on, removed lead paint, patched water leaks and more.
While the repairs have added up to more than $200,000, most of the cost has been taken off the city’s books. That’s because the city Department of Finance packages unpaid repair charges, water bills and taxes for sale to investors, as liens against the properties. Between the repair costs, unpaid taxes and accumulated fees and interest, the Commonwealth Ave. building now owes those investors more than $720,000.
Under HPD policies, the building will remain in the Alternative Enforcement Program even after it is acquired by a new buyer. Whoever the successful bidder on the property is, he or she will be obliged to make the repairs as well as pay outstanding bills for the maintenance work and fuel paid for by HPD.
Meanwhile, James Caban has moved on. His company is bankrupt, but he still owns a house in Rockland County, which he purchased for $660,000 in 2008.
‘Like a bad rerun of a horror film’
The saga of 1547 Commonwealth Ave. is not an isolated instance, tenant advocates say, and points to a need for city agencies to take a more active role. One way to do this, says Sheila Garcia, a community organizer at Community Action for Safe Apartments, a Bronx group, is for the city to use liens on a property as a negotiation tool.
Rather than selling liens on badly decayed buildings like Caban’s to investors — thereby washing the city’s hands of the problem in exchange for cash — the city could, Garcia and others argue, bargain to reduce or even forgive the repair costs for a buyer who is willing to fix up the apartments and keep them affordable.
“The city has leverage over that money, they can use it in a better way,” said Garcia. “It can help in a process about who’s coming next.”
Added Garcia, speaking of HPD, “It’s really the only power they do have.”
The city sells off the liens in an annual sale, with the next one coming up on May 16.
“The city needs to really come in as an active partner,” agreed Jonathan Furlong, an organizer at the Pratt Area Community Council, a local development group in Brooklyn.
Advocates and the de Blasio administration have begun to discuss what might be possible, sources say.
“We’re in a new era of the city being aware and proactive,” Furlong said, “but they need to be really cajoled and prodded and made aware of the circumstances.”
Kerri White, a director at the Urban Homesteading Assistance Board, which helps transfer buildings from negligent landlords to tenant ownership, said that the vicious cycle of real estate speculation is hard to break.
White said she hopes that HPD will start to take a larger role in determining how much certain buildings are worth to prevent private buyers from taking on expenses in excess of likely rental income. Many of the buildings in the Alternative Enforcement Program, she said, are not worth the amounts people are willing to pay for them.
“The city has said a lot about being against predatory equity and they have been very supportive,” White said.
But, White added, there’s a long way to go, since so many buildings are still handed over from owner to owner while tenants continue to live in deplorable conditions.
“Nobody is being held accountable,” White said. “It’s like a bad rerun of a horror film or something. It’s ridiculous.”