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Habitat Magazine Business of Management 2021

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ARCHIVE ARTICLE

The Battle of 95 Greene Street

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Elevator bans, spray-painting, $2,500 sports seats, and the issue of arrears – and how to collect them – are all part of The Battle of 95 Greene Street.

It was just a few days after Ken Nahoum had been arrested in a courtroom that the fire department had to bash down his door. You couldn’t blame them – the gas leak could have blown up the building.

In one of the most extreme and instructive cases of a condo board trying to collect arrears, celebrity photographer Ken Nahoum and his supermodel wife, Basia Milewicz Nahoum, appear to be engaged in a war of attrition with the board of 95 Greene Street, a 19th century cast-iron classic in Soho that converted to a 29-unit condominium in 1985. With battles involving rotting garbage, scolding posters, an off-limits elevator, and the inevitable lawsuit and countersuit, it’s a tale of the problems – and possible positives – of condo boards taking creative, aggressive measures against deadbeat owners.

The board and the couple have been feuding for nine years. Nahoum is a Hamptons and downtown-Manhattan fixture who shoots major magazine covers and has directed TV commercials and music videos – including David “Buster Poindexter” Johansen’s 1987 classic for “Hot Hot Hot.” Milewicz has modeled for Victoria’s Secret catalogs, international editions of Elle magazine, and ads for such brands as J. Crew, Liz Claiborne, L’Oreal, and Vera Wang. They bought into the building in 1999, with Milewicz purchasing Penthouse B for $1.4 million. Nahoum then bought Penthouses A and E, and in 2003, the couple purchased the $1.66 million Penthouse C. They eventually combined A, B, and E for themselves and their three children, and kept C vacant.

Things soon turned sour. The contentious Nahoums sued the lawyer who had handled their renovation/combination. The architect on that job had to file a lien against the couple. And the board sued Nahoum in 2003 over some of his actions as board president and the apparently illegal sale of some common areas and mechanical space. He said he would not pay his maintenance charges partly because of persistent leaks beginning in fall 2009. Not Sitting Well This rankled the other residents, particularly since the couple own about a fifth of the building’s interest – and also because the Nahoums can afford to send their daughter Zosia to an expensive Manhattan prep school. In addition, as the board wrote in a January 26 letter to unit-owners, “Residents who watch the New York Knicks home basketball games could hardly fail to observe Mr. Nahoum cheering from court-side seats that retail for about $2,500 each.” It eventually filed a foreclosure suit for a mid-five-figure amount, including late fees, and at an owners meeting in February ratified several bylaw amendments allowing the board to:

• key-code the elevator so that it can be used only by unit-owners who are not seriously delinquent;

• post and distribute information in the lobby and by mail about seriously delinquent owners;

• require such delinquent owners who rent their condos to have their tenants’ rent paid directly to the condo association; and, among other things,

• prohibit seriously delinquent owners from serving on the board and from voting at annual or special meetings.

On June 15, the board’s lawyer, Robert Braverman, a partner at Braverman & Associates, sent the Nahoums’ attorney a letter stating that if the arrears weren’t paid, the board would begin denying the couple and their children elevator access. (At six stories, the building isn’t required to have an elevator.) The board carried through on its threat two days later, which by coincidence – since it had to be in the works already – was the same day the Nahoums filed a countersuit against the board.

The couple’s case? Aside from wanting a lower, reapportioned common interest and the alleged leaks fixed, their lawsuit claims the board “improperly intruded upon the Apartments without any reasonable excuse or justification” to conduct “purported repairs of the roof” that, in addition to leaks, caused problems with their skylights and terraces; removed and damaged an air conditioner; and engaged in harassment “in order to collect the common charges to which it is not entitled to [sic] in full.”

Braverman disputes that the Nahoums had any basis for withholding common charges. “We emphatically deny that repairs were not made or that any damage was caused to his property, or that he was entitled to reduction to his common charges because of giving back space in a 2008 settlement agreement,” he says. “The 2008 agreement was heavily negotiated.” Nahoum, in his lawsuit, also claims that his “minor children have been subject to curses by members of the Board.” Responds Braverman: “We deny that. He hasn’t been able to articulate who allegedly did this.” Shaming Them

Around this time, in addition to denying elevator access, the board posted in the lobby a notice designed to embarrass the couple into paying their arrears. And here the board clearly overstepped the bounds of a neutral public notice by mounting an 8 ½ x 11 inch framed poster of Milewicz and Nahoum at a 2005 Halloween party celebrating the 80th anniversary of the fashion house Fendi – showing her in a Batgirl costume and him in an orange cape, captioned: “Why aren’t these ‘caped crusaders’ paying their common charges?”

Nahoum, says Braverman, “came down to the lobby and ripped the poster down. Then the board put the poster back up. Then he came down again with a can of spray paint and spray-painted the poster.”

Things slid even further downhill from there. As a sworn affidavit by one of Braverman’s attorneys described to the court, Nahoum also “vandaliz[ed] the Condominium’s intercom system [and] has twice intentionally deposited odorous garbage inside the Condominium’s elevator, for the obvious purpose of harassing and annoying his fellow residents.”

The Nahoums’ attorneys did not respond to a number of calls for comment.

At a June 22 hearing, Manhattan Supreme Court Justice Emily Jane Goodman tried to be Solomonic about the elevator access and the public notice. According to Braverman, she said “she would issue an order saying the board will take the poster down and reactivate the [elevator’s electronic key] fob, provided Mr. Nahoum start paying their common charges beginning with the July payment.” Her conditional order specified he “pay 25 percent of the arrears, in July, along with current common charges, and 25 percent each of the next three months,” Braverman says.

The poster “came down right away,” he says, “with the hope he would make his payment. He didn’t do that. As a result, the order dissolved on July 1,” and the board could again place a public notice and restrict elevator access. At the next court hearing, on July 21, Goodman “expressed her view that the posters ought to be taken down and the board consented to take them down.” The board also agreed to allow elevator access to real estate brokers who are trying to sell the apartments. Little else got decided at that hearing, however, because, Braverman says, "During the course of the court proceeding, the police, acting on the complaint [the board had filed during the poster incident], arrested Mr. Nahoum." As for how long he may have been held or what the disposition was, "We don't know what happened with regard to the arrest."

Less than a week later, on July 27, a potential crisis struck: the gas stove in empty Penthouse C somehow had two burners turned on – and no pilot light. The fire department shut off the apartment’s gas line, notified Con Ed to cap it, and left the super in charge. Braverman says the firefighters “had to forcibly enter the unit. We couldn’t get in because he [Nahoum] refuses to provide a key to the super,” contravening a house rule.

The board believed the gas leak was no accident. An affidavit from the board alleges the Nahoums “intentionally and maliciously turned the burners inside the Unit to the ‘on’ position and extinguished the Stove’s pilot light with the intent that the flammable gas would collect inside the Unit... Defendants have a documented history of intentional acts committed for the purposes of harassing and annoying other residents...”

As for the board’s lawsuit seeking foreclosure, the subject of a September hearing, “the judge,” says Braverman, “took our motion for summary judgment on the foreclosure action and is going to issue a decision on that motion. We’re foreclosing on each of the units.” The couple had put the combined apartment for sale for $25 million in 2005 and the remaining apartment for sale for, initially, $3.95 million in 2009. They haven’t yet sold. “We would love for him to sell the apartments,” says Braverman. “But that doesn’t seem to be happening despite it being a very hot area.”

 

“Self-Help” Needed?

The case has become a much-observed study as to what practical pressure a condo board can put on unit-owners who are in arrears. Current laws tie a board’s hands since legal remedies can cost far more in most cases than the amounts of the arrears themselves – leading some boards to look to what the law calls “self-help” to achieve its necessary financial ends.

“There are some New York cases out there that say it’s permissible for a board to take away owner privileges and to use amenity spaces such as a parking spot, a gym, a pool,” Braverman says. “Maybe concierge amenities – I’ve had some buildings that did it.” In the absence of case law, “I don’t know ultimately whether that will be enforced,” he says.

Other attorneys, not involved in the case, urge caution with self-help. “I’m afraid to say I do not recommend those policies,” says longtime co-op/condo authority Arthur Weinstein. “There has always been a prejudice in the courts against self-help. I understand the agony of what they’re going through,” he says of boards in this position.

“I always get nervous about a board deciding it’s going to do something not directly related to collecting the money,” says James Samson, a partner at Samson Fink & Dubow. “Turning off electricity [in master-metered buildings] where electricity is included – boards say they want to save costs, but they really just want to punish the [debtor]. They gussy it up in terms of protecting the condominium [association], but it’s really about harassment.”

Much of it comes down to the amorphous legal construct “quiet enjoyment of the apartment.” You can’t beat a bass drum outside someone’s door, but is “quiet enjoyment” breached if you make someone in a building six stories or less take the stairs, or prohibit food-delivery guys from going up to the apartment?

Attorneys allow that where amenity facilities are concerned, such as clubhouses, gyms, pools, and tennis courts, particularly in complexes where they may be in separate buildings, the question is less murky. Samson goes so far as to say that something like a clubhouse “has nothing to do with habitability or enjoyment of your unit” and so forbidding that amenity to owners seriously in arrears probably would pass legal muster. As for doormen not accepting deliveries, another self-help tactic boards have tried, “You’ve got to be careful,” he says. “I’m not sure a board has the right to deny service to those who cannot or will not pay.”

And that last phrase indicates a finer point. “You can’t treat all motivations the same way,” Samson says. “You’ve got the former Lehman Brothers partner who’s destitute and not likely able to pay,” he offers by way of example. “And then you’ve got the ones who get into fights and say, ‘You damaged my laundry so I’m not paying my common charges.’”

In the end, whatever good, if any, the 95 Greene Street board’s self-help did in this case will be rendered moot as the foreclosure case slowly wends toward resolution. “It gets messy,” says Samson, “because you’re dealing with people’s lives.”

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