Raphael Toledano reaches $3M settlement over tenant harassment

If Toledano violates agreement, he could face a $10M fine and a lifetime ban from real estate

Letitia James and Raphael Toledano (Credit: Getty Images; Toledano by Michael McWeeney)
Letitia James and Raphael Toledano (Credit: Getty Images; Toledano by Michael McWeeney)

Controversial landlord Raphael Toledano has reached a $3 million settlement with the New York Attorney General’s office over accusations that he harassed tenants and violated rent-stabilization laws.

Attorney General Letitia James’ office and the state’s Division of Housing and Community Renewal started investigating Toledano after tenants and community advocates complained that he was pushing tenants out of rent-stabilized units via harassment, dangerous construction work and other illegal means, according to the agencies.

The investigation concluded that Toledano was indeed harassing tenants through coercive buyouts, illegal construction and failing to provide them with necessary services like utilities and repairs. He also repeatedly misrepresented himself as a lawyer and advertised apartments as three- or four-bedroom units even when they were only legally allowed to have one or two bedrooms, according to James’ office.

“These tenants were terrorized by Toledano’s pervasive threats, fraud and scheming, which jeopardized their safety,” DHCR commissioner RuthAnne Visnauskas said in a statement.

Under the terms of the settlement, an independent monitor will supervise Toledano’s real estate business to ensure that he does not harass tenants or commit fraud. He also will not be allowed to contact tenants directly and will have to hire an independent management company to oversee his properties.

If he violates the terms of the agreement, James’ office will seek to fine him $10 million and impose a lifetime ban on his participation in the real estate industry.

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“Under no circumstance should tenants be subjected to the harassment perpetrated by landlords like Raphael Toledano,” James said in a statement.

Toledano referred to his lawyers Jacob Kaplan and Ben Brafman for comment.

Brafman said in a statement that Toledano “looks forward to working carefully in the future and has the potential to be one of the most successful young real estate entrepreneurs in the city now that these issues have been resolved.”

Toledano reached a settlement in a separate matter last year over $124,200 in unpaid rent for his luxury apartment at 393 West End Avenue on the Upper West Side, where owner Simon Baron Development had moved to evict him after he overstayed a short-term lease. Toledano tried to claim that his unit was supposed to be rent-stabilized but had been illegally deregulated, giving him the right to stay, and eventually agreed to pay Simon Baron $82,800 and leave the building by the end of April.

The state just recently passed its most sweeping package of rent-regulation reform laws in years, eliminating vacancy decontrol and putting new caps on the Individual Apartment Improvement and Major Capital Improvement programs, all of which were common ways for landlords to increase rents at regulated apartments.