The Real Deal New York

Red light rentals

Headline-grabbing prostitution cases highlight common headache for NYC landlords
By Leigh Kamping-Carder | May 01, 2012 07:00AM

The case of Anna Gristina, the mother of four who allegedly ran a brothel out of her Upper East Side walk-up, may represent an extreme example of a Manhattan home being used for prostitution. But the business practices of the so-called Soccer Mom Madam, who is currently awaiting trial at Rikers Island, are not as rare as you might think.

In 2006, a Brazilian woman was arrested (and later convicted) for running an escort ring out of her midtown condo. And last month, the Sheffield condo board settled a case involving an alleged male escort who was renting an apartment in the building from an Italian couple, as The Real Deal reported.

And those are just the ones who got caught.

“There clearly are plenty of [buildings] that are involved with prostitution,” said Manhattan real estate attorney Sandor Krauss.

It’s difficult, if not impossible, to quantify how many New York City apartments are being used by sex workers to host clients. But with the issue front and center in the tabloid spotlight following Gristina’s arrest last month, The Real Deal took a closer look at prostitution in NYC apartment buildings.

Since the 1990s, prostitution in New York City has steadily moved indoors, researchers said. Former Mayor Rudy Giuliani’s crackdown on the city’s red-light districts, combined with the rise of information-sharing websites like Craigslist and Facebook, have largely transformed the streetwalker of yore into the apartment-dwelling escort of today, according to research conducted by Columbia University sociology professor Sudhir Venkatesh.

“In their effort to clean up New York’s streets, police and law enforcement personnel effectively drove sex workers off of the streets and into the ‘indoors,’ ” Venkatesh and his colleague, Alexandra Murphy, wrote in a 2006 research paper. “At the same time, the growth of the Internet enabled sex workers to solicit clients from the relative security of their own homes.”

These days, the influx of overseas buyers renting out their Manhattan investment properties — as in the Sheffield case — appears to have made it easier for prostitutes to “work” from home, industry insiders say.

“In general, what’s more conducive to illegal activity happening in buildings is when a landlord is off-site and the application process for a tenancy is less stringent,” Krauss said.

Prostitutes are more likely to rent than to buy a home in the city because the barriers to entry are higher and the background checks are stricter to own than to lease. Indeed, landlords often learn about prostitution in their buildings from the police or from other tenants.

“What usually starts the whole ball rolling is other tenants in the building are complaining because people are pressing their buzzer by mistake at all hours of the night,” said Andrew Spinnell, a Manhattan real estate and family law attorney who has worked on several such cases. “Sooner or later, the landlord puts two and two together.”

In Gristina’s case, it’s tough to identify her landlord. The site of her alleged brothel at 304 East 78th Street is owned by an LLC, but prosecutors have reportedly claimed that the building belongs to a male “lawyer friend” of hers. It’s also unclear whether she was paying rent at the property. Diana Cadeddu Ruhl, an attorney whose name appears on the building’s property records, did not respond to a request for comment.

At the Sheffield, the building’s management company, Rose Associates, became aware of the situation when another resident wrote them an anonymous letter, complaining that the alleged escort was “lowering the standards of our building, not to mention putting other tenants in danger.” (A spokesperson for Rose declined to comment, and several rental property managers contacted for this story did not respond to interview requests.)

The Sheffield condo board filed a suit in early March, claiming that both the unit owners and the tenant had violated the building’s by-laws prohibiting illegal activity at the apartment.

Just about every lease out there has similar provisions, sources said, but even without this kind of explicit language, landlords have several legal options for removing tenants who practice the oldest profession.

The so-called Bawdy House statutes — provisions in the New York State Real Property Actions and Proceedings Law — give a landlord, law enforcement or even a neighbor the right to terminate a lease and initiate eviction proceedings against a tenant who uses an apartment for an illegal trade, such as prostitution, drug dealing or gambling.

Landlords don’t need a conviction — they just need enough evidence to convince a housing court judge that a tenant was engaged in repeated illegal conduct at the premises.

A landlord can also file a suit in New York State Supreme Court to get an injunction requiring some sort of action, such as the Sheffield board’s request for court orders forcing the Italian couple to move to evict their tenant and blocking him from engaging in further illegal acts.

“Most landlords take the maximum legal action as vigorously as possible, as soon as possible,” Aaron Shmulewitz, a partner at Belkin Burden Wenig & Goldman, said.

But others said that landlords, when confronted with evidence of prostitution, often first try to negotiate a “surrender,” essentially an agreement with the tenant to terminate the lease and surrender the apartment. (A landlord may still report the wrongdoing to police or the district attorney’s office to avoid liability, Krauss noted.)

Not only does that approach save on legal costs, it also avoids a drawn-out proceeding in housing court.

However, some landlords turn a blind eye, particularly if the rent is being paid in cash, or at a high premium.

That’s often how it works with tenants planning to use their apartments for prostitution: They’ll pay the asking rent up-front, just like a restaurant might pay more for a commercial space because of the noises, odors and vermin associated with food establishments, Shmulewitz said.

“They’re generally willing to pay more to find an apartment,” he said, “and then they go about their business.”