The Real Deal New York

Landlord appeals decision in ongoing Carol Cohen rent saga

Katz says BHS broker withheld true income in manner similar to "tax evasion"
By Katherine Clarke | February 16, 2012 03:30PM

Carol Cohen’s former landlord, who last year sued the real estate broker for allegedly misstating her income in order to keep a rent-stabilized apartment, has appealed the September dismissal of the case.

The landlord, Katz 737 Corp., filed an appeal in the New York Supreme Court Appellate Division Feb. 1, claiming that Cohen and husband, Lester, had hidden their true income “in a manner equivalent to “tax evasion,” and the dismissal of the case by a judge Sept. 26 2011 should be overturned.

The landlord’s appeal also stated that the Cohens should be held accountable for their so-called “fraudulent” behavior, according to court documents obtained by The Real Deal.

The initial lawsuit, which led to Cohen’s reported 2010 dismissal from the Corcoran Group, alleged that between 2004 and 2008, the couple repeatedly lied about their income on state forms in order to prevent a rent increase at their $3,060 per month apartment at 737 Park Avenue. The landlord claimed that they had reported their combined income as being less than $175,000 per year to avoid a rent hike. The Cohens had lived in the building, located between 71st and 72nd streets, since 1989.

That suit was dismissed in September, on the basis that the landlord’s claims were speculative and insufficient to prosecute. Cohen has since filed suit against Corcoran, seeking $3 million from the brokerage for allegedly spreading rumors about her personal and professional qualifications.

The landlord’s appeal references Cohen’s legal proceedings against Corcoran and her high-profile career during the real estate boom, citing it as evidence of her allegedly higher-than-declared earnings.

“It appears from both ‘media’ published sources, and from her own publicity/postings, that Carol Cohen was, during the period in question, one of the very leading brokers involved in sales of Manhattan luxury apartments,” the appeal states. “Her income from even just a handful of the sales for which she claimed responsibility would, at ’standard’ brokerage rates, have yielded her income well in excess of the applicable threshold.”

The appeal noted that in her suit against Corcoran, Cohen claimed that the firm refused to allow her to take her contact list when she left, thereby preventing her from generating income “in excess of $3 million.”

While Cohen and Katz’s attorneys both declined comment, a legal source told The Real Deal that an opposition filing in response to the appeal would likely be filed before the end of March.

Cohen was not immediately available for comment, but previously told The Real Deal in a statement that she regretted how the suit had affected her successful career at Corcoran.

“I was deeply disappointed by how the matter was handled by Corcoran, resulting in the split with the firm and my partner Deborah Grubman after a long and fruitful relationship,” she said.

Cohen has since taken a position at Brown Harris Stevens and is working out of the offices at 790 Madison Avenue.

Katz 737, which is made up of several family members of the late real estate developer and investor Louis Katz, no longer owns 737 Park Avenue, following the purchase of the building last summer by Harry Macklowe and Los Angeles-based firm CIM.

  • Get Real

    How much more obvious can the case be? I mean seriously, her sales were on Corocran’s website which even in the most extreme co-brokerage, minimal commission scenario would still have put her well over half a million a year, so come on, what could possibly be her defense? Produce a real tax return or W-2’s and the case is closed. By all appearances she and her husband brought this upon themselves, so good for the landlord not giving up against their high-priced attorneys. Hey Carol, why not just make a statement to clear things up? Perhaps you were under duress or all those sales on the website were just an honest mistake? C’mon, Get Real…

  • FatsSpinnola

    Get Real? Sounds more like Macklowe’s Katz to me. Carol’s nobody’s fool. She’s allowed to take a salary from her Sub S or LLC after taking out all sorts of legit expenses. Just as aggressively as Harry Macklowe does, I might add. And, personally, I find weasily sleazy lawyer phrasing like, “in a manner similar to tax evasion” skirting the line of using the protection of litigation to mask liable.

    Let’s keep this in perspective – if a billionaire like one of our presidential candidates can legally pay less than 15% taxes on a $45M take out, there are ways and means for Carol to very legitimately do what she does. If you don’t like it, go pursue oligarchs in the Former Soviet Union with Razz Putin.

    All this huffing and puffing amounts to a hill of Macklowe Beans – what did Harry’s paper holders feel like when he was bidding billions he couldn’t back up and almost turned the melt-down into a disaster for all us commercial developers?

    Look, personally, I’d be just as irritated as Harry, but, there are a hundred better ways to go about it than slander someone’s reputation publicly, and appear to coerce their license holder to engage in restraint of trade in return for listing favors. This is part of the bad judgment that reminds us all of the great legacy Harry left us all when he bull dozed the SRO in Times Square. That made life really easier for all of us didn’t it?

  • Get Real

    Fats! Good to see you take the bait and elucidate your principally-challenged, hyper rationalized alternate reality mentality. As you so splendidly assert, it’s common knowledge that the 1% can afford to make their own rules and hire attorneys to make it so. Makes sense really, I mean why bother with a conscience when it’s so much more satisfying to make more money instead? Feels so good, doesn’t it?