Steve Croman-Inspired Law Would Ban Loans to Bad Homeowners

Senator Brad Hoylman and Steve Croman (Getty, iStock)

The holiday spirit was audible outside Steve Croman’s Upper East Side mansion Thursday night, but the singers weren’t singing “Jingle Bells.”

As members of the Stop Croman Coalition, a group of tenants formed in 2007 to hold the notorious landlord to account, put their feelings about him to music, a colorful rewrite of “You’re a Mean One, Mr. Grinch “, stood out:

“You are a demon, Mr. Croman.
You are a devil from hell.
You’re the Bernie Madoff of landlords
And a slumber merchant too
Mr Croman…”

The song served as an introduction for State Senator Brad Hoylman, who came with a legislative gift: a bill prohibiting landlords convicted of fraud or breaching housing laws from receiving financing from banks at state charter.

The purpose of the proposed legislation, Hoylman said, is to prevent bad actors like Croman from buying additional buildings and subjecting more tenants to harassment.

“[They] won’t get more money to expand their evil empires and take advantage of even more New Yorkers,” he said.

Croman has been criticized for years for his alleged predatory treatment of tenants.

He spent eight months in jail after pleading guilty to grand larceny and tax evasion in 2017, and agreed to pay $8million to settle allegations he harassed tenants of rent-regulated apartments. As part of the settlement, temporary control of its more than 100 properties was handed over to Michael Besen’s NYC Management until 2023.

But in the years since his release, critics say Croman has resumed many of his old tactics.

The real deal reported in 2019 that the infamous landlord had returned to the city’s real estate market, acquiring new buildings and breaking in to order supers into his existing properties, despite the five-year ban that allegedly bars him from manage their portfolio.

Tenants said TRD they suffered further abuse under NYC Management, which had hired the former Croman employees. Croman also faced new lawsuits for allegedly reneging on deals and illegally deregulating units.

The legislation would prevent Croman from receiving financing from the main multifamily lender New York Community Bank, which continued to lend to the owner despite being one of the banks for which he was convicted of fraud.

Excluding construction loans, the city’s three largest commercial real estate lenders – Wells Fargo, JPMorgan Chase and Deutsche Bank, according to TRD‘s 2019 – are each federally chartered and would therefore not be affected by the measure. NYCB and Signature Bank, fourth and fifth respectively on the list, are state banks that would be affected by the bill.

Hoylman, who claimed at the rally that tenants in some buildings in Croman lost their heat last month after the landlord stopped paying bills, said he hoped the ban would send a message that the state would not tolerate harassment.

“Let’s hope that non-state chartered financiers will think twice before lending to known sleep dealers,” he said. Croman did not respond to a request for comment.

Responding to the suggestion that the legislation could be a form of double jeopardy for landlords who paid for their crimes with time behind bars, Hoylman said state-chartered banks simply shouldn’t help and abet well-known owners like Croman.

The Conference of State Banking Supervisors, a national organization that supports regulators overseeing state banks, did not comment in time for publication.

A spokesperson for the Real Estate Board of New York said the trade group, which represents property owners, was reviewing the legislation.

The bill will be on the table when the state legislature returns to Albany in January. Until then, the Stop Croman Coalition will “dream of a warm Christmas…”

“Just like the ones I knew
We had heating and hot water
And all the things we should
Before the arrival of Steve Croman.

Comments are closed.