Carlton probe: State investigators hear charges of improper fees
Long Island Press, November 9, 1973
It was the only day the investigation would come to them, and many tenants took advantage of it.
They sat patiently in the Carlton Gardens Children’s Center at 150-17 75th Road, commiserating with neighbors they had hardly spoken to before, if ever.
They waited and when their time came, they told their stories to two investigators for the Department of State, which is probing rental practices at the 504-family Carlton Gardens garden apartment complex in Flushing.
About 25 tenants gave sworn affidavits to the investigators, who labored almost non-stop from 9 a.m. to 3 p.m. And the stories they heard were strikingly similar.
Tenant after tenant echoed complaints that were highlighted in a Press Spotlight article on Aug. 27, charges which sparked the probe.
The tenants said they were forced to pay brokerage fees to the Flushing real estate firm, Rabern Properties, Inc., even though they first tried to rent apartments directly from the Carlton management office at 73-07 153rd St. Though they said they either inquired over the phone or in person, they said they were told that they would have to go through Rabern if they wanted an apartment.
At Rabern, the tenants said they were charged brokerage fees ranging from one to one and a half month’s rent.
According to Patrick Cea, legal counsel to the Department of State – which has the power to revoke or suspend real estate licenses – it is “improper” for a real estate broker to charge a brokerage fee to a person referred to him by a managing agent.
According to Cea, when such charges have been proven, the department has suspended brokerage licenses until all improperly collected fees have been returned.
The tenants’ charges have been denied by the Carlton Managing agent, Andrew Guthartz, who is also a licensed real estate broker.
However, his denial was contested yesterday in sworn affidavits submitted to the investigators by Sam Levine, a community affairs worker for the Human Resources Administration, and Barbara Parker, acting president of the Carlton Gardens Tenants Association and member of Community (Planning) Board 8.
In Levine’s affidavit, he charged that at a meeting with officers of the tenants group in June, “Guthartz stated that the management office did no renting. He stated that even if a prospective tenant came to his office for an apartment, he sent them to…Rabern.”
Lawrence Sklar, president of Rabern, has refused to comment on any of the allegations.
Many of the tenants who lodged complaints yesterday were on welfare, and they charged that Rabern had a special system for dealing with them.
They said they had to show the Department of Social Services indicating lower rents and fees than they wound up paying. They said the original leases, discarded after they were approved and checks were issued, were geared to the maximum amounts the department would normally allow. The second leases, they charged, showing higher rents and fees which they had their own pockets.
According to Department of Social Services guidelines, fees, which are not to exceed one month’s rent, are only to be paid when unavoidable.
If the charges are true, the department would have paid out thousands of dollars in unnecessary fees to have welfare families placed in Carlton, which has been cited for nearly a thousand violations of the city’s building code in recent months.
According to Robert Carroll, the Human Resources Administration also initiated an investigation into renting practices following the publication of the Press Spotlight article in August.
A month ago, Carroll said the department’s inspector general would be winding up the probe “within a matter of days.” But despite repeated requests from The Press, the department has yet to release the results or to say when any will be forthcoming.
Meanwhile, the investigators for the Department of State should be finishing up their reports in the next couple of weeks. The report will then be submitted to the department’s legal counsel, who will decide whether there are grounds for a hearing.
If a hearing is scheduled, the tenants will be called to testify at the hearing, which must precede any judgments by the state agency.