Building Sues City After Getting Booted From Co-Op Conversion Program

Sept. 21, 2015 — Thirty years after the co-op conversion boom of the 1980s, another boom has been taking place: a transformation of low- and middle-income rental stock into cooperatives. It's a lot of hard work, but it is possible for troubled buildings to get back on their feet and make the transition. Unfortunately, that doesn't seem to be the case for the building at 240 East 119th Street. The tenants association there — where half the residents are reportedly behind on their rent — is suing the city after getting kicked out of a co-op conversion program. DNAinfo reports that, in May, "the department of Housing Preservation and Development (HPD) sent tenants of 240 E. 119th St. a letter notifying them that they would be removed from their Third Party Transfer program, which is meant to give low-income tenants a chance to own their apartments as co-ops." The reason? HPD cites "low attendance at mandatory training sessions, tenants not having current leases, and 54 percent of tenants being in rent arrears." The tenants blame their noncompliant issue on the nonprofit company that manages the building. Although they don't actually name the company — SoBRO — in the lawsuit, the tenants say that the nonprofit "issued defective lease renewals, miscalculated rents and failed to make repairs. Meanwhile, SoBRO denies "the allegation and said it spent millions on renovating the building. It also worked with both HPD and the tenant association to get the building converted into a co-op" adding that "the residents were not able to reach any of the conversion milestones." According to the report, "the building had a 58 percent attendance record and 46 percent of rents collected. While those numbers increased to 64 percent and 77 percent the next month, they were still under the 80 percent requirement, according to [an] HPD letter." Now it's a waiting game, but if the building is removed from the program, the residents' apartments will become rent stabilized.