Senate bill will crack down on fraudulent landlords
Landlords who violate state and local housing laws wouldn’t be able to receive loans from state-chartered banks under legislation introduced recently in the state Senate.
Sen. Brad Hoylman, D-New York City, introduced S.7609 on Dec. 17. Hoylman proposes no longer allowing state-chartered banks from providing financing or investing in any person or business entity leasing residential real estate if the person or entity has been convicted of illegal conduct against a tenant, convicted of fraud or embezzlement or has entered into certain consent decrees with the state Attorney General’s Office.
It would take serious crimes for the law to be triggered, however, meaning it would likely not impact local landlords who find themselves dealing with housing code issues in housing court. If Hoylman’s bill becomes law, lending institutions would be prohibited from lending to a landlord only if they have been convicted of illegal conduct against a tenant, including harassment, coercion or fraud; or if the landlord has been convicted of fraudulent refinancing of loans, tax fraud, embezzlement or another fraud or theft related to financial management.
“This bill would help address the lack of accountability by prohibiting state chartered banks from issuing loans to landlords that have been convicted of violating housing laws.
Bad actors that act with impunity should not be given the chance to continue victimizing New Yorkers,” Hoylman wrote in his legislative justification.
The New York City senator cited the case of Steve Croman, a New York City landlord who was sentenced to one year in jail and ordered to pay $8 million in restitution to tenants. Croman was forced to put more than 100 of his properties into independent management, but after serving his jail sentence, Croman purchased a slew of new buildings.
“When a landlord is found time and again to disregard housing law and target tenants with harassment, it is reasonable to expect financial institutions to analyze this record when considering future financing,” Hoylman wrote. “Certain bad actors have been convicted of illegal harassment, coercion, or fraud against tenants, only to turn around and get financing for a new building to exploit.”