United States Obtains Consent Decree Against Lilmor Management, Morris Lieberman, And Others To Abate Lead Paint And Improve Housing Conditions Across More Than 2,500 Apartments In Largely Low And Moderate-Income Neighborhoods

 

Defendants Admit Violations and Agree to Pay $6.5 Million in Penalties and Restitution and to Undertake Broad Remediation of Their Housing Portfolio

Damian Williams, the United States Attorney for the Southern District of New York; Lisa F. Garcia, the Regional Administrator for Region 2 of the U.S. Environmental Protection Agency (“EPA”); Matthew Ammon, the U.S. Department of Housing and Urban Development (“HUD”) Office of Lead Hazard Control and Healthy Homes; and Rae Oliver Davis, the Inspector General of the HUD Office of the Inspector General (“HUD OIG”), announced that the United States, together with the State of New York, filed a civil lawsuit against LILMOR MANAGEMENT LLC (“LILMOR”), MORRIS LIEBERMAN (“LIEBERMAN”), and related LLCs (the “LLC DEFENDANTS”) (collectively, the “Defendants”), alleging that since 2012 the Defendants have violated federal law relating to lead-based paint safety and maintained a public nuisance in approximately 2,700 apartments, including more than 2,500 still owned by the LLC Defendants and more than 2,400 apartments currently managed by LILMOR and LIEBERMAN.  Among other things, the U.S. and the State of New York allege that the Defendants’ apartments are riddled with peeling lead paint and lead dust; infested by rats, mice, and roaches; damp from perpetual leaks and covered with growing mold; and otherwise a danger to human health.  More than 130 children living in the Defendants’ apartments have tested positive for elevated blood-lead levels since 2012.

The parties simultaneously filed a Consent Decree that would resolve the lawsuit and impose extensive relief, including requiring the Defendants to pay $3.575 million in penalties and $2.925 million in restitution to affected tenants, and requiring Defendants to identify and abate all lead-based paint (at an estimated cost of $10 million) and remediate substandard housing conditions across more than 2,500 apartments, subject to the oversight of an independent Housing Specialist selected by the U.S. and New York State. 

U.S. Attorney Damian Williams said: “New Yorkers are entitled to protection from lead-paint hazards and other unsafe conditions in their homes. Landlords must comply with federal lead paint laws, and they cannot neglect their residential properties in ways that create a public nuisance.  The consent decree we filed today, if entered by the Court, would provide the most extensive relief ever achieved in a case of this kind, including requiring the defendants to make 2,500 apartments safe and sanitary and to pay $6.5 million, including nearly $3 million in restitution to impacted tenants.”

EPA Regional Administrator Lisa F. Garcia said: “Our message to housing authorities, landlords, and renovators is loud and clear – Follow The Law – if you persist in cutting corners and putting public health at risk, we will pursue a violation and you will pay a hefty fine.  There is no excuse for these violations. Rather than protecting children from lead poisoning, Lilmor Management Company LLC and the other named defendants systematically violated lead paint safety regulations.  EPA appreciates the partnership with HUD, the U.S. Department of Justice and New York State officials on this action that underscores our joint commitment to protect our children and families from lead hazards.” 

HUD Director Matthew Ammon said: “This settlement means that thousands of families in New York City will have their apartments tested for lead and made lead safe. HUD’s partnering with DOJ and EPA on this case is part of the whole-of-government approach that is vital for addressing lead hazards in homes nationally.”

HUD-OIG Inspector General Rae Oliver Davis said: “The defendants’ failure to maintain safe and healthy living conditions for tenants, particularly the hundreds of children who have tested positive for elevated blood-lead levels, is simply unacceptable.  This consent decree holds the defendants accountable for its egregious conduct.  It provides important relief for victims and will require the defendant to take meaningful action to protect tenants from future exposure to health hazards.  My office will continue to work with DOJ, HUD, EPA, and our local partners such as the New York Attorney General in addressing critical health and safety issues and safeguarding the well-being of families nationwide from preventable hazards such as lead poisoning.”

Exposure to lead-based paint dust is the most common cause of lead poisoning, which can lead to severe, irreversible health problems, particularly in children.  Lead poisoning can affect children’s brains and developing nervous systems, causing reduced IQ, learning disabilities, and behavioral problems.  Federal law seeks to protect tenants from these grave threats.  In particular, the federal Lead Disclosure Rule requires landlords and their agents to inform tenants about the risks of lead exposure in their apartments before entering lease agreements and to disclose known facts about the presence of lead paint and lead paint hazards in their housing. The federal Renovation, Repair, and Painting Rule (“RRP Rule”) provides work-practice standards and related requirements to minimize the risk of lead exposure during renovation projects. 

As alleged in the U.S. and New York State’s Complaint filed in the district court, LIEBERMAN is the co-owner and principal of LILMOR, which currently manages a portfolio of more than 2,400 apartments and previously managed others. Many of the apartments are owned by the LLC DEFENDANTS.  The apartments are largely located in communities where families have low to moderate incomes and are disproportionately burdened by environmental and other health hazards.  For years, the Defendants systematically failed to provide their tenants with disclosures about lead-based paint and lead-based paint hazards in their apartments, as required by the Lead Disclosure Rule.  LILMOR and LIEBERMAN also failed to protect tenants when conducting renovation work as required by the RRP Rule, creating risks of exposure to toxic dust. Furthermore, the Defendants failed to properly maintain their residential properties, leading to apartments that were so unsafe and unsanitary as to present a public nuisance.

In the Consent Decree, LILMOR and LIEBERMAN admit, acknowledge, and accept responsibility for the following, among other things:  

• Defendants own, control, or manage, in whole or in part, 49 residential buildings containing 2,539 units in New York City, all of which were built prior to 1978.
• Government records show that, since 2012, more than 130 children have tested positive for elevated blood-lead levels while living in an apartment owned or controlled by one or more of the Defendants.

Disclosures

• Prior to November 2020, LILMOR and LIEBERMAN failed to provide tenants entering new and renewal leases with known information relating to lead-based paint or lead-based paint hazards and/or records in the possession or control of the Defendants relating to lead-based paint or lead-based paint hazards, as required by the federal Lead Disclosure Rule.
• In hundreds of apartments they rented, LILMOR and LIEBERMAN knew of lead-based paint or previous lead-based paint hazards because of prior lead-based paint hazard violations issued by the New York City Department of Housing Preservation and Development (“HPD”) or the New York City Department of Health and Mental Hygiene (“DOHMH”), but LILMOR and LIEBERMAN did not disclose this fact to tenants as required by the Lead Disclosure Rule.
• Prior to the dates upon which government records show that children tested positive for elevated blood-lead levels while residing in the Defendants’ apartments, LILMOR and LIEBERMAN had received citations for lead-based paint hazard violations from HPD or DOHMH for at least 18 of these apartments but did not disclose the fact that these apartments contained lead-based paint to the tenants when they signed their leases or lease renewals.

Lead-Safe Work Practices

• LILMOR and LIEBERMAN lacked federal certification to conduct repairs and renovations that required lead-safe work practices pursuant to the RRP Rule, did not provide maintenance staff with equipment necessary to perform RRP-Rule-compliant work, and did not train maintenance staff on lead-safe work practices.  LILMOR and LIEBERMAN provided no instructions to its maintenance staff to prevent them from conducting work that was required to be performed in accordance with lead-safe work practices.  Their work-order database nevertheless reflects that work subject to the RRP Rule was conducted by their maintenance staff.
• Through at least 2020, LILMOR and LIEBERMAN failed to follow lead-safe work practices required by federal and local law in covered repair and renovation projects for which they engaged an entity that worked solely or principally for them.  During this time, the entity did not employ lead-safe work practices.
• Furthermore, although LILMOR had arranged for this entity to receive EPA certifications required by the RRP Rule in 2010 and 2020, the entity was not certified to conduct work covered by the RRP Rule from 2015 to 2020.
• In a period spanning from 2019 to the present, HPD issued violations to Defendants under applicable housing code provisions:
• more than 966 times for lead-based paint hazards,
• more than 2331 times for rodent or roach infestations,
• more than 1465 times for mold,
• more than 1492 times for leaks, and
• more than 85 times for lack of heat.

The Consent Decree agreed upon by the parties requires the Defendants, among other things, to do the following:

• Identify and abate all lead-based paint across 49 buildings containing more than 2,500 apartments.
• Eliminate substandard conditions throughout this housing portfolio.
• Engage an independent Housing Specialist, selected by the U.S. and the State of New York, to oversee the Defendants’ work under the consent decree.
• Pay a $3.25 million civil penalty to the U.S.
• Pay $3.25 million to New York State, of which $325,000 will be a civil penalty and $2.925 million will be used to pay restitution to tenants harmed by Defendants’ conduct.
• Provide rent-abatement credits for tenants affected by lead-based paint violations and substandard conditions.
• Provide tenant education efforts to tenants related to the hazards of lead-based paint.

To provide public notice and afford members of the public the opportunity to comment on the Consent Decree, the decree will be lodged with the District Court for a period of at least 30 days before it is submitted for the Court’s approval.

Mr. Williams thanked EPA and HUD attorneys and staff and HUD OIG for their critical work in this matter.  Mr. Williams also thanked the Housing Protection Unit of the New York Attorney General’s Office for coordinating in pursuing the federal and state claims resolved in the Consent Decree.