Toledano, facing eviction, says: I am a rent-stabilized tenant

Simon Baron Development is trying to kick the controversial real estate player out of his luxury apartment on the UWS
By Will Parker | September 14, 2017 05:16PM

toledano 393 west end

Raphael Toledano and 393 West End Avenue

Hyperkinetic landlord Raphael Toledano, whose alleged methods in evicting tenants from rent-stabilized apartments made him a major target of the New York City tenant movement, faces eviction at his $13,800 a month Upper West Side home, where he claims to be a rent-stabilized resident, court records show.

According to a Housing Court petition filed on June 1 by landlord Simon Baron Development, Toledano reached the end of a three-month lease at 393 West End Avenue this May and was thus obligated to leave the building.

But Toledano, who is being represented as a tenant by Belkin Burden Wenig & Goldman, filed a motion to dismiss the petition. He claimed that he, his wife and their young child are entitled to a rent-stabilized lease. The rental contract, Toledano claims, included a 421a rider detailing the apartment’s rent-stabilization requirements.

In court filings, Toledano also argues that the high-rent vacancy decontrol performed by a prior landlord in 2006 was not properly documented to account for an estimated $20,000 in apartment improvements (known as IAIs) needed to justify jacking the rent over the deregulation threshold, then $2,000 a month. Simon Baron acquired the prewar building in 2012, paying $68 million.

Perhaps ironically, Toledano’s claims resemble the lawsuits organized by the Housing Rights Initiative, which helps tenants sue their landlords for allegedly violating tax abatement laws and rent regulations. Targets of such litigation include Stellar Management, A&E Real Estate and Kushner Companies.

If the court finds Toledano’s rent-stabilization claims to be correct, he could be looking at a rent reset that would bring his $13,800 monthly bill down by more than $11,000. Toledano is demanding no less than $315,000 in rent overcharges, damages and legal fees from his landlord.

“This has got to be a joke, right?” said SaMi Chester, a tenant organizer at the Cooper Square Committee who actively works with tenants in Toledano’s buildings who often claim they are being harassed by the 27-year-old landlord. “Here’s a guy who’s built his career on screwing over rent-stabilized tenants. Now he’s doing that?”

City property tax records show that 18 units at 393 West End Avenue are currently registered as rent-stabilized and records from the state’s Homes and Community Renewal included as part of Toledano’s court filings show his apartment is not among them. The building receives a number of tax abatements, but 421a does not appear to be one of them.

Jeffrey Goldman, counsel for Toledano, said that questions about the building’s 421a status were best directed at Simon Baron. When asked if the apartment was Toledano’s primary residence, a requirement for rent-stabilized tenants, Goldman said “I can’t answer that,” but clarified that if the court found that Toledano’s apartment should indeed be rent-stabilized, he would have to be given a lease before the landlords could try to evict him based on residency.

Sources told The Real Deal that Toledano has multiple homes outside of Manhattan, though those same sources also said that the Upper West Side home was his primary residence.

Matthew Baron, president of Simon Baron Development, declined to comment.

Toledano, who recently filed for bankruptcy on a portfolio of multifamily buildings in the East Village amid claims he was overleveraged, operated a real estate business on a model that sources have said depended on vacancy deregulation to crank up rent rolls.

In 2015, he went on a tenant buyout spree, borrowing $125 million from Madison Realty Capital to fund renovation work. The New York Times reported that some of the tenants Toledano bought out never received their payment. Last year, Toledano agreed to pay more than $1 million to settle harassment claims with rent-stabilized tenants at 444 East 13th Street.

Goldman said many of the allegations reported in the press about his client are inaccurate.

Earlier this year, Madison foreclosed on 15 of Toledano’s East Village buildings and then moved to take over their management, an action that New York State Attorney General Eric Schneiderman tried to block, arguing that Madison had unscrupulously lent to Toledano in the first place, assuming Toledano would engage in “unlawful conduct.” Madison prevailed, however.