New Foreclosure Legislation Would Require Banks to be More Transparent
February 17, 2012
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Yesterday, New York 1 reported on legislation proposed by Christine Quinn that would require banks to notify the city when they’re going to put a building in foreclosure. This legislation will help tenants who live in foreclosed buildings continue to get the services they need, which is very important, considering foreclosure often means divestment and deterioration for the buildings.
The tenants who live in 164 Dikeman, the building featured in the NY1 video, are a great example of why this type of legislation is needed. For this building, the foreclosure process consisted of an absentee landlord and deteriorating conditions. The residents discovered that the foreclosure was only the tip of the iceberg of the buildings problems. Due to the poor conditions the building fell into the Department of Housing Preservation and Development’s (HPD) Alternative Enforcement Program (AEP), meaning it was one of the 200 worst buildings in the city. On top of this, the residents realized all the tenants were being illegally overcharged for rent, while receiving no services. The tenants were able to file for rent reductions to have the legal rents restored, but while this was going on the bank sold the notes to a building to a Eman Realty who has now become the owner.
Unfortunately, the new owner has not proved to be more responsive than the last. Eman Realty’s principal, Alexander Varveris, has a history of being a neglectful landlord. Eman took over in September, yet tenants have seen very little change in the building.
Besides tipping the city to be on the lookout for declining physical conditions, another reason this legislation could be helpful is it could provide more time for the tenants to have a voice in what happens to their homes after the foreclosure ends. The tenants at Dikeman were not able to intervene in the sale of the note because they were not aware that was a possibility and that a new landlord was going to take over through a note sale. The residents are fed up with the neglect and would like the building to become Co-op. The tenants and UHAB are currently organizing and working towards this goal, but this outcome might have come sooner and possibly easier for the tenants if the foreclosure proceedings were more transparent to the city and to residents of the buildings.