Ten foreclosed Bronx buildings formerly owned by “Ten Worst Landlords” firm Milbank Real Estate scored a rare victory in court today. A Bronx Supreme Court judge has ruled that a financial services company responsible for the buildings cough up $2.5 million for emergency repairs. The Miami-based company, LNR, has 30 days to come up with the money.
Back in April, we reported on how the tenants of these 10 broken buildings went to court with an usual legal strategy: with no landlord to sue to fix the broken boilers, roofs, and other problems that plague the buildings, the tenants turned to the bank that holds the mortgage, Wells Fargo and LNR.
LNR has argued that the company is not responsible for the massive repairs needed in the buildings — a recent report estimated costs between $17.5 and $26.6 million — but is only obligated to service the buildings until a buyer is found. In recent weeks, the company has told the judge that a buyer has come forward, but it refused to name the buyer.
That frustrated Judge Stanley Green, as well as City Council members such as Christine Quinn, who have jumped on board in recent months.
Dina Levy, president of the tenant advocacy group, the Urban Homesteading Assistance Board, hailed the ruling. “It’s the first time any court has sent a stern message to these irresponsible banks,” Levy said.
Jonathan Levy, the Legal Services attorney who represented the tenants in the case, said the decision “sets a model.” “Not just for this portfolio, but for other portfolios in the Bronx and throughout the city that are in or are soon to be in similar circumstances.”
The buildings went into foreclosure in April 2009. They gained notoriety in the aftermath of the housing bubble, when Los Angeles-based Milbank Real Estate — the two Iranian brothers that own the company were named in our Ten Worst Landlords list — lost a slew of properties. Judge Green had appointed a special administrator to oversee the buildings while a new buyer could be found. But the administrator had complained that the buildings were hanging on by a thread and that the banks were only providing enough funds to do basic “survival” repairs.