JUST IN: PRIME APARTMENTS LANDLORD RESPONDS TO TENANTS' LAWSUIT

As first reported here on FAA News, 60 tenants of Prime Apartment tenants have served their landlord and his property manager with a Superior Court lawsuit alleging a long list of illegal rent increases and associated harassment, intimidation and retaliation.

The tenants are Alexander Sternbuch, Shmuel and Rochel Bogart, Dovid Balter, Shmuel Banker, Aaron Beer, Yaakov Cohen, Moshe and Feigy Eisemann, Ezra Esses, Tzvi and Zipora Feifer, Chezky Feigenbaum, Yehoshua Finkel, Yisroel Friedman, Ashi Fuchs, Boruch Gellis, Yaakov Glustein, Yonah Goldberg, Yaakov Gordon, Esther Gorelick, Elozor Greenberger, Shmuel Grunhut, Yehuda Gugenheimer, Alter Halberstam, James Holtzberg, Yisroel Kanarek, Dovid Kaplan, Kirnos, Zev Kramer, Abraham Leibiker, Yehuda and Yehudis Marcus, Steven Meisels, Yisrael Mordowitz, Nochum Naiman, Chayala and Moshe Olshin, Dovid Paskesz, Meir Poltzer, Tzvi Puretz, Shlomo Reidel, Mordechai Reis, Menachem Rosenblum, Dov Rosenman, David Rothstein, Yaakov Schechter, Chaim Schwab, Chanoch Shapiro, Temima and Zachary Shemesh, Naftoli Simon, Yosef and Zizi Simon, Mordechai Snyder, Samuel Tepfer, Yisroel Weiss, and Moshe Wilner.

The tenants are represented by Attorney Ian Goldman Esq. of Levin Shea Pfeffer and Goldman. (Mr. Goldman also serves as the Lakewood Municipal Prosecutor and counsel to the Lakewood Township Municipal Utilities Authority and Board of Fire Commissioners.)

Defendants are Prime Apartments, which is owned by Cheskel Brach, and Rushmore Management, the property manager.

Prime Apartments is a 104-unit residential building, with 4 of those units classified as storage units pursuant to their Lakewood Zoning Board approval.

According to the tenants allegations:

The landlord, Cheskel Brach entered into contracts he prepared with tenants and specifically in writing agreed not to raise rents more than 5% at renewal and be bound by Lakewood rent control.

However, he is attempting, and has raised rent above the 5% Lakewood Township Rent Control Ordinance, and in one instance raised rent 50% over current rent in breach of not only the existing leases but also in violation of law.

Additionally, Brach contends that there is no Lakewood rent control law or rule as Deputy Mayor Menashe Miller years ago abolished the Rent Control Board and his building is new and exempt from rent control and hardship for landlord.

In 2014, Prime Apartments submitted an application to the Lakewood Zoning Board to construct a building with 104 apartments. The application was represented by Attorney Abraham Penzer Esq.

Ultimately, the Board approved the application but with a stipulation that there be only 100 apartments rented for residential use, and the remaining 4 apartments are to be for storage use only.

The developers of the building originally decided to use this stipulation to their advantage by expressly advertising that the building will contain units for storage space and that the tenants of the residential apartments will be able to make use of this "extra storage area."

Chaskel Brach and David Glick were the owners of the building when the building was brought on the market and leases were offered to the tenants.

Many of the new tenants received lease agreements which stated a rent amount of $1,795, however they were told that the actual rent via rent concession would be approximately $400-500 less each month, depending on the tenant.

The reason for this odd set up, allegedly, was to defraud the bank by inflating the value of the property. The tenants had no idea and were duped into being pawns which enabled the landlords to do their fraud.

In the beginning of the third year of the lease, in December 2020, Prime renewed another lease but requested a rent increase of $35 for a total rent of $1,335, a 2.7% increase over the base rent of $1,300 - well within the Township's 5% rent control ordinance.

However, suddenly, in January 2023, despite the terms of the current lease, letters were sent to a number of tenants stating that their rent would increase to $2,000.

The letters to the tenants indicated that because the building was newly built, it is exempt from the Township's 5% cap on rent increase.

However, the Township's ordinance specifies that such landlords are only exempt if they expressly write in their initial leases that the building is exempt from rent control, and the date when the exemption expires.

Additionally, State Statue requires landlords of rent control exempt buildings to file as a new building 30 days prior to the issuance of a Certificate of Occupancy, which this landlord failed to do.

To date, some of the tenants have collectively decided to continue to make payments to the landlord at 5% above their most recent lease that they agreed to.

Each month they receive a statement from the landlord with arrears accruing as a balance for not paying the full amount requested pursuant to the landlord's unilateral and illegal lease changes and rental increase.

The landlord is bound to the contract he drafted and he failed to comply with requirements to claim exemption from rent control and just the opposite bound himself contractually to rent control.

The defendants are attempting to rescind all contracts and leases of their current tenants through a campaign of threats and intimidation unless tenants agree to an illegal and substantial rent increase.

The ten count lawsuit alleges that the defendants violated the following laws and regulations in the State of New Jersey:

1) Lakewood Rent Control Rules

2) Destruction and Removal of Tenants Properties from Storage Units - in order to intimidate the tenants to pay higher rent, the landlord removed their property from the storage units and began to renovate those units into rental apartments

3) Intimidation of Tenants Through Threats of Harassment - the landlord first attempted to buy them out of using the storage units, then attempted to evict them from using the units, and even attempted to charge them extra for using the units

4) Non-payment of Utilities and Threats of Water Shut-off - despite the tenants having paid rent as required under their leases, they have received notices that their utilities will be shut down

5) Lack of Heat Due to Poor Insulation - the building has been at 50° in the winter due to the landlord's failure to fix the insulation

6) Lakewood Zoning Ordinance - the landlord does not provide 1.5 parking spaces per unit as required

7) Retaliation Against Tenants - it is Mr. Brach's stated goal to make it untenable to live in the building so he can charge new tenants as much as he wants and chase out existing tenants from the building. He has threatened to remove tenants for "overcrowding," and he is further threatening to remove tenants property from the storage if they are not marked up with the tenants name and further limiting access to the storage units for several hours per day

8) Breach of Contract

9) Breach of Covenant of Good Faith and Fair Dealing

10) Consumer Fraud Act

The lawsuit seeks for an order reinstating the rental amounts to the initial amounts, ordering that the tenants regain access to the storage units, compensatory damages, punitive damages, attorney costs and fees, and any such other damages as the law deems just and proper to make the Plaimtiffs whole again.

The lawsuit specifically demands a jury trial.

Marlton Attorney Lori C. Greenberg, Esq., representing Prime Apartments, has now filed an Answer together with counter-claims and separate defenses.

The Separate Defenses include that the lease contract expressly waives the right to a jury trial.

The Answer asserts that the parties entered into lease agreement contracts, which provides how much rent is to be paid on a monthly basis, and the number of occupants that can reside at the premises, and nature of tenants occupancy.

Plaintiffs are in breach of their leases either because they failed to pay their rent, a rent increase, had too many occupants residing in the unit and/or occupying the unit in a manner inconsistent with the terms of the lease agreement, including by taking up storage units that are not in their lease and they are not paying for the storage.

Counter-claims include:

Count I - Frivolous Claims; the action was filed or pursued in bad faith, solely for the purpose of harassment, delay or malicious injury, and Plaintiffs knew or should have known that the claims were without any reasonable basis in law and could not be supported by a good faith argument.

Count II - Unjust Enrichment; Plaintiffs violated the terms of their lease agreements by failing to pay rent and over-occupying units, yet they continue to reside in their apartments in clear violation of those terms, unjustly enriching themselves.

Count III - Misrepresentation; Plaintiffs states that Defendants openly acknowledged that they were to offer common storage and that the storage was "touted by Defendants as an inducement of potential tenants to enter into leases." Additionally, Plaintiff alleges that the $1,795 rental amount was never intended to be the actual rent but was intended to defraud the bank by inflating the value of the property. Plaintiff fails to demonstrate how any attempt was made to defraud. Defendants did send correspondence to Plaintiffs asserting a rent increase. This is not beyond the scope of Plaintiffs rights as a landlord. Plaintiffs admit that they paid additional rent increases however the complaint alleges same were made under duress - a simple fact that cannot be proved.

Together with the Answer, Mr. Greenberg filed discovery which includes a list of interrogatories and notices to propound.

Judge Valter Must has not yet scheduled a trial date.

Following the filing of this lawsuit, as previously reported here on FAA News, Cheskel Brach, the landlord of Prime Apartments, served the tenants with a Hasra'ah (a warning) from the Bais Din of the Central Rabbinical Congress of the U.S.A. and Canada (the CRC).

Additionally, as previously reported here on FAA News, Bais Din Zedek which is under the auspicies of Rav Yisroel Knopfler, has also authored a Hasra'ah against the tenants.

To join a FAA WhatsApp Group, click here.

To join the FAA WhatsApp Status, click here.