When Condo Unit-Owners in Arrears Try to Hide Apartment Ownership

Quick background: Condo boards have a harder time than co-op boards in collecting from residents in arrears, since co-op boards can threaten eviction under the proprietary lease and are first in line in foreclosures. Condo boards, on the other hand, are third in line after mortgage lenders and tax departments, and have little leverage other than limiting access to amenities and letting fellow residents know who's mooching off them.

Spencer Tracing 

The alleged moocher in this case is Elizabeth Hazan, who purchased apartment 1A at The Spencer, a tony, 12-unit condominium at 1 East 62nd Street, just off Fifth Avenue in Manhattan. As of this past May, the apartment owes 65 months of common charges and other fees totaling nearly $200,000. In August  2011, Hazan purportedly gave away the apartment to a Canadian citizen with no ties to New York, Raymond Houle, who in turn, four months later, purportedly gave the apartment to a Canadian corporation, 9221-0228 Quebec, Inc.

She purportedly gave away

the apartment to a

Canadian citizen who then

gave it to a corporation.

The Spencer condominium board filed a lawsuit against the corporation in August  2012. A process server gave Hazan the summons and complaint in the building's lobby, under the board's interpretation that Hazan was  an "agent" of the corporation.

But this past May, the court ruled that while Hazan was properly served in her individual capacity, that didn't satisfy the requirements for serving the corporation, and the complaint against the corporation was dismissed.

It's not like the board's attorney wasn't trying to find 9221-0228 Quebec, Inc. In fact, while that corporation isn't wasn't registered in New York State, it was registered in Canada. In fact, it was registered at two different addresses! And neither 112020 nor 11020 Armand Lavergne, Montreal-North, Quebec, seemed to be valid when they tried serving the corporation in November 2012.

Houle-i-gone

Next step: Send a process server to Houle's Montreal home address: 3765 St-Kevin, Apt 9. Guess what? He'd moved out in July 2012 and didn't leave a forwarding address. 

The court took note of this, and cited the New York Code's Civil Practice Law CPLR §308(5), which states that service shall be made in whatever manner the court directs if service is impracticable under the general rules of this section. And as you can see, boy, was it impractical. In such instances, the court is permitted to allow any form of service that reasonably gives a party notice.

The court's decision: Allow the board to serve Houle's attorney, the Manhattan-based Darius A. Marzec of the Marzec Law Firm, with two copies of the verified summons and complaint, and an additional mailing each to the corporation and to Hazan at 1 East 62nd apartment.

The ruling came down on Aug. 8. Was the condo board's process server successful? Has the mysterious Canadian responded? And how hard is Hazan laughing at the merry chase? It may be months before this case is back in court again, and we'll do our best not to leave you hanging. In the meantime: If your board can't find track down an apartment's owner, ask the court if it's OK to serve the owner's lawyer. Tell 'em Board of Mgrs. of the Spencer Condominium v. Hazan sent you.

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