Savoy Park tenants sue owners for allegedly overcharging on rent

Group of residents at giant Harlem complex claim new landlord owes them nearly $700K

TRD New York /
Aug.August 07, 2014 11:45 AM

A group of tenants at the Savoy Park apartment complex in Harlem have filed suit in Manhattan Supreme Court against the property‘s new ownership, which includes an affiliate of L&M Development Partners, along with financial services firm TIAA-CREF and an affiliate of real estate fund Savanna. The 47 Savoy residents are seeking about $700,000 for almost five years of alleged rent overcharges.

The suit, filed Aug. 1, alleges that the new owners incorrectly billed tenants at 2300 Fifth Avenue — a 257-unit high rise that is part of the massive 1,800-unit, seven-building complex — in violation of a 2011 order to reduce rents by the state Department of Housing and Community Renewal.

“We filed this action to recover hundreds of thousands of dollars in rent overcharges for low and middle income tenants at Savoy Park in Harlem,” said attorney David Hershey Webb, who represents the tenants. “It looks like the current owners are following in the footsteps of the prior owner by mistreating tenants and cavalierly disregarding the law.”

The new owners, who acquired the complex in 2012, claim they were unaware of the dispute.

“These complaints predate the current ownership of the building and we only learned of them recently,” said C&C Management, the L&M affiliate that manages the property, in a statement. “We have invested heavily to improve the property and the quality of life for residents at the Savoy. This lawsuit is the first time these issues have been brought to our attention and we are looking into them.”

Court documents show that since October 2009, which is the effective date of the rollback, most of the tenants have paid anywhere from $7,000 to more than $32,000 in overcharges. The tenants in the rent stabilized building were paying anywhere from $600 to $2,000 per month in rent.

In 2009, a tenant complaint was filed with DHCR alleging that the landlord, which at the time included Vantage and AREA Property Partners, had not provided adequate services. By 2011, DHCR found that the owners failed to repair a broken security gate, had a sealed trash compactor and poor janitorial service in the bathrooms.

As The Real Deal previously reported, tenants accused Vantage of harassment and failure to maintain the property for years. The firm defaulted on loans at the property and sold it in 2012 for $210 million in debt.

Neither Vantage nor AREA were named in the suit.

At the time of the deal, the buyers were announced to be the New York Affordable Housing Preservation Fund, which was formed by Citigroup and L&M. Documents filed in June 2012 with the New York City Department of Finance, however, show that Savanna, led by Nick Bienstock and Chris Schlank, is listed as a former borrower of a loan at the property.

Vantage officials were not immediately available for comment.

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