Brooklyn condo residents win lawsuit, set to convert building to co-op

They thought they were buying apartments in a 25-unit condo in Bay Ridge, Brooklyn. But the developer lacked permits to erect the building, never transferred deeds to the owners, and failed to make $5 million in mortgage payments. When the lender, Maxim Credit Group, started foreclosure proceedings on the property, the residents faced the prospect of losing millions of dollars — and their homes.

But this New York City real estate nightmare had a dream ending. In 2021, after a protracted legal battle, the residents won a lawsuit against the developer, Xi Hui Steven Wu, but continued to face foreclosure threats, Brooklyn Paper reports. The tenants publicized their case through local elected officials, leading to a partnership with the nonprofit Asian Americans for Equality (AAFE). In collaboration with the residents’ attorney, Ed Cuccia, and the court trustee, AAFE staff began meeting with the families and hatched a plan to first purchase the mortgage note to prevent foreclosure and then start the lengthy process of converting 345 Ovington Ave. to a limited-equity cooperative.

Last month, AAFE, with support from New York Homes and Community Renewal and the city's Department of Housing Preservation and Development, finalized the building’s purchase. Earlier this week, Attorney General Letitia James joined the celebratory press conference held outside of 345 Ovington, criticizing Wu for exploiting the residents’ trust, noting, “He sold these families condominiums that did not legally exist. He failed to give them proper mortgage contracts or deeds to their home.”

In the coming months, AAFE said it will assess the building’s needs and develop a construction plan. In the meantime, residents will be participating in training on how to govern a Housing Development Fund Corporation (HDFC) co-op, while five apartments will be offered as middle-income cooperatives through a city lottery.

“You don’t hear every day of somebody robbing their tenants and absconding to another country, never to be heard from again,” Dina Levy, a senior vice president at Homes and Community Renewal, tells The New York Times. This story's happy ending, she adds, "is just miraculous.”