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Mitchell-Lama Cooperative Board Successful in Cleaning Up Illegal Occupancy Mess

Adam Leitman Bailey, P.C.’s client, a city-regulated Mitchell-Lama cooperative, was being charged by a city regulatory body (the Department of Housing Preservation and Development) with allowing over 60 illegal occupancies in their 500-unit building. As a result, the board of directors for the cooperative faced stiff sanctions from the city regulators. The firm’s client was frustrated because they were unable to prove that the occupancies in question were, in fact, illegal and were therefore unable to evict the tenants or occupants. They hired one law firm after another to help them with the evictions, but each firm failed to evict a single illegal occupant. Finally, the client turned to Adam Leitman Bailey, P.C., which quickly analyzed the problem and developed a solution. Within weeks, evictions were under way. Within months, half of the identified units were turned over to management for resale, with the evictions achieved by means of settlement. Most of the other unqualified tenants were required to appear before the Department of Housing Preservation and Development and/or Housing Court. In all cases where a final decision has been rendered, Adam Leitman Bailey, P.C. has achieved the board’s goals.

How did the firm attain such positive results where no prior firm was able? It focused on fact finding and fraud detection. As soon as it was retained, it sent detailed document request letters to the tenants and occupants suspected of involvement in illegal occupancy or fraud. The firm’s document request letters demanded that the tenant or occupant prove his/her right to the apartment by supplying a multitude of documentary evidence. In addition to the firm’s general fact finding, the firm also performed its own fraud detection. The firm searched investigative databases to determine whether the occupants’/tenants’ proof was authentic. According to one attorney at the firm, “Knowledge of the data in investigative databases gives you the advantage of asking the right questions and requesting the right documents.” The firm also hired private investigators to acquire evidence for hearings.

Once the fact finding and fraud detection had confirmed illegal occupancy, Adam Leitman Bailey, P.C. immediately began the appropriate case: illegal sublet, non-primary residence, or breach of the lease by misrepresentation or fraud. Most of the illegal occupants claimed that they had succession rights, so success in the firm’s cases also depended on extinguishing their false claims. In addition, in bringing the firm’s cases, it had to be sure that we were following the Mitchell-Lama Rules, a complex, detailed protocol. In the end, our thorough knowledge of the Mitchell-Lama procedure was a key factor in our prompt success.

Another problem facing the firm’s client’s board was how to handle those units identified as illegal occupancies by the city regulators where the board believed that the tenants were, in fact, legitimate. In these situations, the firm worked hand-in-hand with the tenants and/or purported successors to produce documents necessary to prove their right to the apartment. Once sufficient documents were compiled, the firm prepared formal submissions to the Department of Housing Preservation and Development. All of the units in question were restored to good standing with the Department of Housing Preservation and Development, except for one instance where the board was mistaken about the identity of a purported successor.

In addition to the illegal occupancy cases described above, Adam Leitman Bailey, P.C. also handled a number of nuisance and non-payment cases for which we aggressively commenced and pursued proceedings in the Department of Housing Preservation and Development and/or Housing Court.

Christopher Halligan represented the cooperative in these matters.

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