A Landlord’s Worst Nightmare

A New York real estate rental story:

By JOSH BARBANEL, Dec. 19, 2004

BERRYL FOX, a psychologist and a widow with a young son, thought she had found the perfect tenants for the top three floors of her brownstone on West 90th Street, just a few steps from Riverside Drive.

The tenant, Peter Hall, was a former professional football player in his 60’s who charmed everyone around him and talked of a private trust and financial dealings across Europe and the Middle East. His wife, Anne Torselius Hall, 40, meticulously supervised renovations, even offering to share the cost of building a roof deck.

They had two boys who attended a local public school who seemed like promising companions for Dr. Fox’s own son.

The Halls signed a one-year lease in April 2003 and agreed to pay $5,800 a month, at a time when luxury rents had tumbled sharply and good tenants were hard to find. Dr. Fox, who lived on the bottom two floors, needed that rent to meet her monthly mortgage payments.

But after a few months, the Halls began paying their rent late, and after six months they stopped paying altogether, according to court papers. Dr. Fox was about to discover that despite their charms, the Halls were every landlord’s worst nightmare — tenants unusually skilled at delaying and evading the perils of eviction.

It turned out that being an amateur landlady, and counting on that steady flow of cash from tenants, wasn’t as easy as brokers sometimes suggest. Dr. Fox also learned that even more experienced landlords had been caught up in similar disputes with these same tenants, as the court records show.

Now, more than a year since their last rent payment, after a series of broken promises, three bankruptcy filings, four eviction notices, a mysterious foreign bank draft that took two months to clear and then was not honored, the Halls are still in residence at West 90th Street, along with three children (they recently had another boy, an event cited as an explanation for a delay in a court filing), two dogs and three large birds.

They owe $81,000 in back rent, or close to $100,000 if Dr. Fox’s legal fees are included, while Dr. Fox had to take out a home equity loan to help cover expenses. And that doesn’t include the $10,000 she agreed to spend on improvements to the rental apartment, including a new oak dining room floor, when the lease was signed.

At a hearing last Tuesday, Judge Sheldon J. Halprin of Housing Court in Manhattan lifted a stay and once again cleared the way for an eviction within 48 hours. Outside the courtroom, Dr. Fox’s lawyer, Jeffrey Klarsfeld, was not celebrating. “It’s not over,” he said. And the lawyer for the Halls, Maria M. Malave, said that she was confident that any eviction threat would be postponed until after New Year’s Day at the earliest, because marshals halt evictions during the week before Christmas.

“Housing Court is supposed to protect poor rent-regulated tenants from rich landlords,” Dr. Fox said. “Here we have a struggling landlord being victimized in Housing Court by rich tenants who know how to use the system.”

In response to several requests for a comment on the dispute, Mr. Hall twice e-mailed a reporter and refused to discuss it. “I love my landlady,” he said.

Ms. Malave said, “Peter is a brilliant guy, but here, he is using protections and rights available to all tenants.”

It was only after her troubles began that Dr. Fox learned that the Halls had a long history in court, including prior evictions from high-rent apartments, and multiple bankruptcy filings apparently timed to avoid evictions. Over the years, court records show, Mr. Hall had been accused of participating in fraudulent multimillion-dollar investment schemes including the use of fake letters of credit, but the cases were dropped.

Sherwin Belkin, a real estate lawyer who represents landlords, said he had never heard of a case as bad this, involving so many bankruptcies and so many apartments. “I have come across serial deadbeats, but never serial bankruptcy filers,” he said. “The lesson is don’t be penny wise and pound foolish when you are renting an apartment, especially at high rents.”

In the 1990’s, the Halls rented a luxury apartment on the top floor of 200 Central Park South, with its distinctive curved facade, but were sued repeatedly for back rent, and filed for bankruptcy, halting the eviction before they reached a settlement and left.

They had legal troubles again when they moved in to an $8,000-a-month apartment on the 12th floor of 441 West End Avenue. Eventually, the management company there, Lyndonville Property Management, rented Mr. Hall a total of four apartments in two buildings at the same time, for his own family, relatives and even his accountant, for a combined rent of $23,000 a month.

The Halls stopped paying and eventually owed more than $366,000 in back rent, according to court papers. They left the apartment only after both Peter and Anne Hall filed for bankruptcy on the eve of evictions, but evictions were carried out against the other three apartments.

Despite the troubles, Dr. Fox said that she had received a glowing reference from a managing agent at Lyndonville. Leonard Wassner, a principal at Lyndonville, said the employee who wrote the reference had since retired and did not represent the views of the company. Mr. Wassner said that he, too, had received a positive reference from Mr. Hall’s previous landlord.

Mr. Hall grew up in western Pennsylvania, played basketball and was a quarterback for the football team at Marquette University in the late 1950’s. He came to New York in 1960 when he was drafted by the New York Giants as a quarterback, and played one season as an end. He now lists his occupation as “financial consultant.”

In 1989, he was arrested in connection with what prosecutors said was a fraudulent Haitian mortgage bank based in Queens and in Mr. Hall’s Central Park South apartment that issued fake letters of credit and phony securities, and had dealings with the Palestine Liberation Organization, Libya and Iraq. The charges were dismissed.

Dr. Fox bought the house on West 90th Street in 2001 for $2.1 million, as both a home and an investment that she hoped would eventually provide some financial security for her son. Her husband, Bruce Hertz, a lawyer, had died of a brain tumor about two years earlier at age 46, and she used insurance proceeds to cover part of the purchase price, along with a $1.4 million mortgage.

The house was 17 feet wide and five stories high and needed extensive work on the bottom floors. But soon after Dr. Fox moved in and construction began, she learned she had ovarian cancer, now in remission, and found herself at one point supervising construction while undergoing chemotherapy. Last February, she was married to Robert Friedman, a math professor at Columbia University. She uses her married name socially.

When Dr. Fox first began to rent the apartment, she had great luck with tenants. In the hot New York market she was able to rent out the top three floors for $8,000 a month. But as interest rates fell, and prices rose, many people renting large luxury apartments began to buy instead. Her second tenant, the actress Marcia Gay Harden, moved out to buy her own brownstone.

Then the rental market stalled, and her broker was unable to rent the apartment. She decided to both lower the price and rent it out herself, saving the renter the broker’s fee, typically 15 percent. And that is when she found the Halls.

She checked their references, including a call to the former managing agent at the Halls’ prior apartment building at 441 West End Avenue, who gave them a glowing report. She got a bank statement showing an account containing $50,000 in cash. But she made one critical mistake — she didn’t order a credit report that might have showed their history of bankruptcy filings.

When the rent was late in November 2003, she wrote the Halls a letter, and they promised to pay the rent as soon as they could have the money transferred “from the Middle East.” The payments finally came in at the end of January, in the form of a bank draft from a Netherlands bank. But the draft was not readily negotiable. And after two months, Dr. Fox learned that the bank would not pay.

When she complained to Mr. Hall, he wrote her a lengthy letter about his efforts to get a second payment to her, discussing the difficulties of communications with his “asset management company in the Middle East.”

“I knew my management officer was leaving on Monday for Libya (where he is a consultant to the government) for a two or three week stay,” he wrote, “and my experience has taught me that Libya is still a very difficult part of the world to communicate with.”

Dr. Fox filed suit in April 2004, and although she has won favorable rulings in court, has not gotten any money or her rental apartment back. After a series of postponements sought by the Halls, Dr. Fox won an eviction order at the end of July, and eviction was scheduled for mid-August. But the day before the eviction, Mr. Hall filed for bankruptcy in federal court, a move that automatically stayed the eviction.

In late September, Dr. Fox’s lawyers were permitted by bankruptcy court to resume the eviction, and it was rescheduled for October. But a few days before the new eviction date, Ms. Hall filed for bankruptcy, too, delaying the eviction until mid-November.

Both bankruptcy filings were eventually dismissed by the court. Though the Halls listed almost no assets in their own names — making it difficult for Dr. Fox to enforce a court judgment against them — they have been looking into the purchase of a town house in the neighborhood, according to an account by Dr. Fox, confirmed by a real estate broker.

A city marshal was scheduled to carry out the eviction at 12:30 p.m. on Thursday. But, at 10:04 p.m. on Wednesday, the Federal Bankruptcy Court in Manhattan received an electronic filing in which someone else, Eleke Emeh, filed a bankruptcy petition, listing the Halls’ apartment as an address. When the marshal was notified the next morning, the eviction was halted.

Dr. Fox and her lawyer said that they were certain the stay in the eviction would be lifted — but only after a hearing can be scheduled before the bankruptcy judge, during or after the busy holiday season. But they worry that the case won’t end there.

And if she does get a chance to rent it out again, Dr. Fox said, she plans to use a broker and do a very thorough check before signing a lease.

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