Court hearing set for April 4
Condo owners at the sprawling Parkchester South apartment complex fighting what they charge is a “draconian” and “unsubstantiated” maintenance fee increase scored a win on Friday when a judge blocked management from evicting condo owners for withholding payments until further hearings.
Assemblyman Luis Sepúlveda, along with Senator Ruben Diaz, the lead plaintiff in the lawsuit over imposition of a 15.19 percent maintenance fee hike for owners of 8,286 units, hailed the judge’s decision. A hearing in the case will be held on April 4.
“While it is a temporary victory in our fight against management’s unwarranted action, we are heartened that it is the first step in what will be final justice in our fight for fairness,” Sepúlveda said after the court ruling.
Sepúlveda, whose assembly district includes Parkchester, and Diaz Sr. have been leading the fight to block the hike until the Parkchester South management explains in detail the need and process for recovering costs for repairs to the aging buildings.
The legislators, with donations from condo owners and renters, filed a lawsuit in Bronx state Supreme Court on March 23 to block the increases and require, among other things, an independent forensic audit of management’s books and expenses purportedly made for the repairs.
On Friday, Bronx state Supreme Court Justice Ruben Franco ordered the management to “take no steps to evict unit owners for failure to pay the 15.19 percent from February 1, 2016 until or after April 4, 2016,” pending a court hearing on that date.
The suit is seeking an Order to Show Cause explaining why the management should not be enjoined from collecting the increase and requiring detailed turnover of crucial financial information and records heretofore kept secret that relate to the rationale for the unprecedentedly high maintenance fee hike.
Management determined the requisite percentage increase, Sepúlveda and Diaz said, based on “unknown computations relating to unverified costs” incurred for complex-wide repairs.
The suit charges that management has failed
- to provide an accounting and backup documentation of the bidding process used
- to select the contractor(s) who performed the repairs
- to demonstrate to individual unit owners that management utilized the most cost-effective course for the repairs
- to honor its fiduciary duty to give individual owners a way to readily review the condominium’ s books
- to provide an independently audited review of the relevant financial records
- to provide a full explanation of and justification for the computations employed and their underlying methodology in determining the increases imposed on owners, or
- to utilize an objective and independent accounting firm to ensure that the individual owners can review a proper audit for the last three years, including revenues and expenditures relevant to the increases in question.
Assemblyman Sepúlveda emphasized that an independent forensic audit of the condominium’s books was essential. “The fact that vital repairs were required throughout the complex does not give management the right to violate its fiduciary duty to owners and hide behind a shroud of secrecy, particularly when owners have been assessed outrageously high increases,” he said.
“The increases are certainly unaffordable, particularly to seniors, to those on fixed incomes, and to others struggling in the current climate to make ends meet,” Sepúlveda added.
Senator Diaz, who owns a condominium in Parkchester South, said, “We will be vigilant in defending the hardworking owner-residents from these astronomical monthly increases, ones they not only cannot afford, but which are mired in secrecy. Management must be held accountable,” he continued. “Only through an independent forensic audit of the condominium’s books can we know what the real numbers will indicate.”
The senator and assemblyman were joined by scores of Parkchester South Condominium owners and tenants on Feb. 10 outside management’s office to protest the charges. The two state legislators also announced plans to sue to block imposition of the monthly hike, with owners asked to contribute $15 each for legal costs.
Among the protesters at the rally was Dr. Mazeda Uddin, president of the South Asian Fund for Education Scholarship Training, who is representing over 2,000 Parkchester South Condominium owners who signed a petition against the increase. Uddin noted that after years of annual maintenance fee increases of 3 to 4 percent, this year’s raise is “a record- breaking amount.”
Built by MetLife from 1939 to 1942 with middle class rentals, a third of the sprawling complex was converted to condominiums in 1974, with what is nowParkchester South Condominium converted in 1986.
Both complexes are now home to a large South Asian and Asian population, including Pakistani, Bangladeshi, and Indian, as well as a number of European residents. African-Americans and Latinos comprise more than 20 percent of the population.
Assemblyman Sepúlveda represents New York’s 87th Assembly District, which along with Parkchester includes Stratton Park, Castle Hill, West Farms, Van Nest, and Unionport.
Senator Diaz represents the 32nd Senate District, which includes Parkchester.
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