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Tenants Demand Lender Pay for Repairs

NEW YORK CITY-The motion filed Wednesday seeks to hold a CMBS trust responsible for fixing more than 4,000 violations at a Bronx apartment portfolio in foreclosure.

By Paul Bubny | Updated on April 22, 2010

NEW YORK CITY-A motion filed Wednesday in New York State Supreme Court seeks to hold a CMBS trust controlled by Wells Fargo responsible for maintaining building conditions in a 10-property Bronx multifamily portfolio going through foreclosure. Specifically the motion asks the court for orders directing the court-appointed receiver to address 4,300 housing code violations in the portfolio, 756 of which are considered immediately hazardous, and the trust to pay for the repairs.

A spokeswoman for Wells Fargo tells GlobeSt.com she hasn’t seen the motion, and she referred inquiries about the properties’ upkeep to the special servicer, LNR Partners. Calls to LNR and to Milbank Real Estate Services, which defaulted on a $35-million mortgage on the portfolio, were not returned by deadline.

The filing on behalf of tenants at the portfolio was announced Wednesday by attorneys from Legal Services NYC-Bronx and several lawmakers, including City Council Speaker Christine Quinn. “As properties like these move into foreclosure, tenants are left in a state of limbo, not knowing who is responsible for critical repairs,” Quinn says in a release. “Through this lawsuit, we’re saying that lenders must be held accountable for the properties they helped finance. No family should have to live in deplorable conditions because of the unsustainable investments that someone else made.”

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