Lev Leviev / Getty
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Africa Israel Investments is being sued by unhappy condominium owners, in downtown New York. These are unit holders of an upscale condominium conversion project at 15 Broad Street in lower Manhattan. The building is round the corner from Wall Street and was once office space occupied by banking giant JP Morgan.
After many complaints of unfinished work and the lack of a proper certificate off occupancy, owners of the upscale condominiums sued Africa Israel, which is controlled by billionaire Lev Leviev and his development partner, and also fellow Chabadnik, Shaya Boymelgreen.
Now the New York State Attorney Eric Schneiderman has got involved in the case, and last week a New York court put in place, at his urging, a ban on Leviev or Boymelgreen from transacting any further cooperative or condominium sales in the State of New York, pending resolution of the deficiencies found at 15 Broad and enquiries there into the associated allegations of possible fraud.
Leviev’s Africa Israel Investments and Boymelgreen were also ordered to pay a deposit of US$470, 000 into a court supervised account in the mean time.
Leviev and Boymelgreen also have to turn over comprehensive accounting information, and building and construction records, before the next court hearing in three weeks time.
Eric Schneiderman is reported to have asserted, “This fraud on homebuyers, conducted literally on Wall Street, is emblematic of the very worst conduct by property developers. Homebuyers at the downtown condominium were deprived of the most fundamental aspects of homeownership – a completed home and control of their property.”
Strong words, though as yet no case has been proven and both Africa Israel and Boymelgreen have so far made no official comment on the proceedings.
This is not the first time the two developers have crossed swords with State Attorney General Eric Schneiderman over allegedly shoddy construction work, and the lack of a certificate of occupancy, for a downtown Manhattan condominium conversion project.
In 2012 Leviev and Boymelgreen also had to settle with him, and also face continued multi-million dollar claims by purchasers of units in another building. In this case similar problems had apparently been dragging on for several years at a conversion project just two blocks from 15 Broad Street, at 20 Pine Street also just around the corner from Wall street, where Leviev and Boymelgreen had taken former Chase Manhattan offices and turned them into residential apartments.
With the financial crisis of 2008 leading to many banks upping stakes from Wall Street and fleeing to seek both cheaper and smaller digs elsewhere , converting former bank buildings to residential use seemed to be a good idea at the time.
However older properties are not always so easy to convert, and many problems come to the surface once the construction work begins. Having lost a lot of money themselves during the same crisis it would not be surprising if Africa Israel and Boymelgreen had tried to cut a few corners along the way therefore. And, if so, this is the likely result: one ends up in a court of law to determine the rights and wrongs and, perhaps, obtain restitution.