By Jack Newsham
July 18, 2019
In a Q&A, Massimo D’Angelo spoke about how he got involved in a dispute that led to a high profile raid on a New York condo, his clients’ plans and how this case is unique compared with his other matters.
Massimo D’Angelo, a partner at Adam Leitman Bailey, P.C. represents a group of owners at a midtown Manhattan condominium named the Atelier who claim the building’s board has turned a blind eye to illegal short-term rentals listed on Airbnb and other websites. D’Angelo’s investigation of the building helped spur a headline-grabbing raid last October, where city inspectors found many violations in units. The raid was seen as a major crackdown on short-term rentals. D’Angelo has continued to represent the owners in a dispute with management.
In a Q&A with the New York Law Journal, D’Angelo, 37, spoke about how he got involved in the high-profile dispute, what’s been happening since the raid and about his broader practice.
Have any of your cases been in the public eye like this one?
I made the front page of the New Jersey Law Journal in my first year out of law school. But this is international news. This was the biggest Airbnb outlaw hotel raid that was ever conducted by the Mayor’s Office of Special Enforcement. The egregiousness of the board president’s conduct has gotten attention.
So what has been happening at the Atelier?
It’s an illegal hotel. We believe it is being run by the board president, this guy Daniel Neiditch. I did copious research. I was up until the wee hours of the morning, burning away the midnight oil. I went on ACRIS [New York City’s online property registry] and I pulled up these different entities that were being used in connection with the scheme, tried to link them with Neiditch. We believe this has been going on for some time. He uses his company River 2 River Realty to essentially be the exclusive broker for all sales and leases in the building.
Are disputes like this a normal part of your practice?
A big percentage of my practice, probably 50%, is acting as general counsel for condos and condominiums. general affairs, transfers, governance. Another 30% to 40% is condo construction defect work. Most often we represent the developer. I have several large owner-developer clients for whom this comes up—illegal short-term rentals—where we have to serve a notice and move to terminate [the lease]. Right now, I’d say [short term rental disputes are]anywhere from 5% to 10% of my practice.But never again do I think I’m going to get a case like this Atelier one.
How did this case come to you?
I got the matter through a friend of mine, a matrimonial attorney. He gave me a buzz and he said, “these unit owners have a real case and they want to meet.” I met a group of unit owners last year [in September]. They were telling me that they were coming home to this white-glove, 475-unit building and having to jump over suitcases and tourists. They said that Neiditch and the board were actually fining them because they were speaking out about this. The board’s attorney then threatened to issue liens and even foreclose on their units. I had never heard of this level of egregiousness before, and I do a lot of these cases. It culminated in the October raid. It was like an onion: every time you peeled back a layer, you discovered something else.
Was it challenging to convince the city to act?
It wasn’t hard, but it did take a lot of diligent work to give them everything they needed in terms of what units were part of the operation. It was time-consuming. The city, before they act on anything, usually double and triple checks all of the info provided to ensure it’s true and accurate, and of course they did it in this instance as well.
What has happened since the raid?
After it was covered in the Wall Street Journal, I got a call from a guy named Raul Salvador. He asked me to meet at a McDonald’s in Long Island City. He ended up coming to my office. His girlfriend was one of the cleaning ladies that formed part of this outlaw hotel ring, and she had been fired and was upset and wanted to bring down the operation. He provided me with a plethora of photographs. Once my clients, in the latter part of last year, started bringing these illegalities to the board’s attention, [Neiditch and his allies] created these greeters who would meet guests at bodegas near the Atelier, take their luggage to a holding room within the Atelier and deliver the luggage to their room.
Why aren’t more than 40 or so owners in such a large building up in arms?
Because many or most of the owners are foreign investors—they’re Chinese, Middle Eastern, Russian—and they would use Dan’s company, River 2 River Realty, to lease their units. So they’re folks that live abroad and they don’t attend annual meetings. A lot of these unit owners, at the end of the day, they just care that their investments are making money.
What relief will you be seeking? Illegal rental laws give the city a lot of power, but what can private litigants do?
There hasn’t really been a whole lot of litigation in this area. When the city or agencies sue, it’s generally based on public nuisance, fire or life-safety issues, or how illegal short-term rentals are taking up housing for New Yorkers. From a private right of action, from the civil side, the law is not fully developed, but especially in a building like the Atelier, it’s reducing the equity value of the units. That is a cognizable damage that could be sought in court. This theory has not really been tested, but certainly all you need is an appraisal.
What are your upcoming plans for clients?
We’re ready to rock and roll. I have a retainer agreement out to [about 40 residents]. The plan is to file a complaint, but I don’t have a date set in stone to do that.
What else is on your radar?
These new rent laws [passed in June]. They’re debilitating, and they transcend all sectors. I called the investigator I use under all my holdover cases, and he’s basically shut his doors. [His clients] told him to cease work on all files. Tenants’ lawyers got a smile from ear to ear, but what they don’t realize is there aren’t going to be any more buyouts, which is how they get paid. It’s going to take time to see all the effects of it, but it’s going to be disastrous.
Dani Schwartz, a lawyer at Wachtel Missry who represents the board, disputed D’Angelo’s characterization of issues at the building and said the board has taken action to crack down on illegal rentals, which he said were the fault of unit owners. He added that recent inspections by the city had not found any illegal short-term rentals.
All interviews are condensed and edited for style, grammar and clarity.