Croman Tenants will Receive a Total of $8 Million in Restitution Funding, the Largest-Ever Monetary Settlement with an Individual Landlord
Households Received Checks for $2,425 from the First of Up to Four Rounds of Payments in December 2018
New York State Attorney General Letitia James today announced the opening of the second round of the Croman Tenant Restitution Fund, allowing current and former tenants of Steven Croman owned buildings to apply for restitution. The fund was part of an unprecedented settlement reached with Croman in December 2017 following an investigation and lawsuit against the major New York City landlord for engaging in illegal conduct, including harassment, coercion, and fraud. Such unlawful practices forced tenants out of their rent-regulated apartments, which Croman then converted into highly profitable market-rate units.
“It’s unconscionable for a landlord to unlawfully force a family from its home simply to improve his own bottom-line,” said Attorney General Letitia James. “I’m pleased that this settlement provides Croman tenants with long overdue restitution and additional protections. Unscrupulous landlords like Steve Croman are not above the law, and we remain committed to holding bad-acting landlords accountable for taking advantage of New Yorkers.”
The consent decree requires Croman to pay $8 million into a Tenant Restitution Fund – the largest-ever monetary settlement with an individual landlord. The $8 million will be divided equally among eligible claimants and distributed to tenants in installments over a 38- to 42-month period. This first round of restitution payments was distributed to eligible tenants starting in December 2018. Households received $2,425 in the first round of payments.
Croman must make two additional installment payments to the Croman Tenant Restitution Fund. After receiving each installment, the Attorney General, through its claims administrator, will again send payments to all eligible households. The exact amount of future payments may change based on the number of eligible claimants.
Eligible tenants who did not apply for the first round of payments, can still apply for additional rounds. Tenants are eligible for restitution if they are or were a tenant in a rent-stabilized or rent-controlled apartment owned by Croman between July 1, 2011 and December 20, 2017; they received a buyout of less than $20,000, not including any amount that purported to cover rent or arrears; and no other tenant in their apartment received money from the restitution fund. Several hundred current and former tenants are potentially eligible to apply for these restitution funds.
On Tuesday May 28th, JND Class Action Administration, the claims administrator, mailed a notice to eligible claimants who did not apply in the first round, that they have until June 27th to apply for the 2nd round of payments. Claim forms and additional information are also available at www.cromanrestitutionfund.com. Tenants who received restitution in the first round are automatically approved for future rounds of payments and do not need to re-apply.
In addition to the $8 million Tenant Restitution Fund, the settlement also requires over 100 Croman residential properties to be run by a new, independent management company with no ties to Croman, for up to five years – the longest-ever term for independent management in OAG history. Moreover, the settlement requires seven years of oversight by a monitor ensuring compliance with the terms of the consent decree and providing regular reporting to the Attorney General – the longest-ever monitorship required in any tenant harassment case.
In October 2017, Croman was sentenced to a year in jail and paid a $5 million tax settlement following separate criminal charges brought by the New York Attorney General’s office for fraudulent refinancing of loans and tax fraud.
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