- New York AG Letitia James reached a settlement with private equity firm Madison Realty Capital Advisors, LLC (“Madison Realty Capital”) to resolve allegations that its financing helped a now-bankrupt New York City landlord to engage in fraudulent activity and tenant harassment in violation of New York’s consumer protection laws.
- According to the assurance of discontinuance, Madison Realty Capital provided financing to Raphael Toledano and associated entities for the acquisition of a portfolio of rent-stabilized apartments, which Toledano then attempted to convert to market-rate apartments through forced apartment-vacating practices like tenant harassment and failure to provide necessary repairs, and through renovations that did not comply with New York’s building code. The assurance of discontinuance further alleges that Madison Realty Capital knew or should have known about Toledano’s history as a landlord and that his proposed conversion scheme was illegal.
- Under the terms of the assurance of discontinuance, among other things, Madison Realty Capital and Toledano will pay $150,000 to the AG’s office to be used for restitution. Madison Realty Capital will also take ownership of Toledano’s portfolio of buildings, subject to $1.05 million in rent credits, which will be shared among the tenants who still remain in the portfolio apartments, and ensuring placement of 10 formerly-homeless families in its buildings. In addition, Madison Realty Capital will register more than 70 percent of the portfolio apartments as affordable housing, with rent at or below $2,000 per month.