Landlord faces trouble in what has become quite the mess
August 03, 2010
One of the biggest landlords in Hartford has been accused in court documents of stealing $275,000 from a group of condominium owners at Bushnell on the Park by using their association fees as his own personal “piggy bank.”
Attorney Jonathan Starble, who represents the condo owners, says Martin Carlin controls the finances of the Bushnell condominium association because he owns a majority of the residential units, 129 of 180 total, renting them out. Starble claims Carlin not only doesn’t pay the association fees he himself owes on his 129 units — Attorney Patrick Boatman, representing Carlin, concedes he is four months behind on payments totaling some $250,000 — but that he also uses the fees paid into the association by the independent condo owners to cover his own expenses instead of paying for the maintenance of the building.
Carlin testified in foreclosure court in Hartford last August he owns approximately 3,000 apartment units in the city, including those in Bushnell on the Park. There are 21,592 apartments total in Hartford, according to City Assessor Larry LaBarbera, meaning Carlin controls nearly 15 percent of the city’s total rental market.
LaBarbera provided the Advocate with a list of 2,471 apartment units owned by Carlin through several limited liability corporations, including Marks Group LLC, Surrey Group LLC, The Alphabet Group LLC, and Bushnell Regency LLC, which owns the units in Bushnell on the Park. LaBarbera says there could be a few other parcels with different “ownership entities” that could also belong to Carlin, bringing him to the 3,000 mark.
Carlin has been involved in an escalating battle with the group of independent owners in the building, who finally hired an attorney after repeated attempts to find out from Carlin what was happening to their association fees went unanswered. Meanwhile maintenance languished and the iconic building crumbled around them. Chunks of concrete have fallen off the rear steps and large swaths of a concrete patio have crumbled into gravel.
Significantly, Bushnell Regency owes some $15 million to Wells Fargo bank and has been staving off foreclosure and bankruptcy for 15 months by asking for, and getting, extension after extension from the court.
Starble scored a significant victory at the end of June when a Superior Court judge granted his motion to appoint a receiver for the condo association. The receiver, Trio Realty Services in Hartford, is empowered by the court to take over the management of the condo association from Carlin, who had steadfastly refused to open the books of the association to the independent condo owners, while at the same time collecting their dues.
“Just imagine that these unit owners have been in the dark for years,” says Starble. “Only now do we have a chance to look a little behind the curtain, and the good news of course is that the association is now being managed by an entity that does not have a conflict of interest.”
Starble says this may be the first time a condo association has ever been put into receivership in Connecticut.
“My clients now know when they pay their dues every month [they’re] subject to direct court supervision and oversight,” he says. “But it does not solve the problem of the fact that the association is in financial crisis as a result of what happened prior to the receivership.”
And that’s where the alleged theft comes in. As Starble argues in a memorandum opposing a motion by Boatman to set aside the receivership and return control to Bushnell Regency, it is Carlin who must account for the $275,000 of association fees he owes.
“The problem is not the Foreclosure Action, or the Bankruptcy Case, or even the weakened economy; the problem is Mr. Carlin,” writes Starble in the memorandum. “Even if the $274,274.96 is paid to the Association tomorrow, it does not change the fact that Mr. Carlin stole this money from the Association; he repeatedly lied to his fellow unit owners about stealing it; he refused to disclose any Association documents to any of his fellow unit owners, in violation of state law; and he held his fellow unit owners hostage in a crumbling building while he continued to siphon their money into his own pocket.”
Boatman calls Starble’s accusation of theft a “red herring.”
“While it is clear that money is still due and owing from Bushnell Regency, LLC, it is also evident that these outstanding fees will be paid at the resolution of the Foreclosure Action,” writes Boatman, who speculates the foreclosure will be resolved “in the next 60 to 90 days.”
Starble doesn’t even try to hide his contempt for Boatman’s expedited foreclosure timeline, calling it “laughable” given Carlin’s “numerous strategic maneuvers” to delay the action for more than a year already.
Boatman did not return a call for comment.
The theft Starble is accusing Carlin of committing is unconventional, a point Starble acknowledges in his memorandum. Starble writes: “Although there is no evidence that the $274,274.96 was physically deposited into the Association’s account and then withdrawn [by Carlin], Mr. Carlin did not need to do this in order to effectively steal from the Association.”
Instead, says Starble, Carlin used the association as his own “piggy bank” by not paying his own fees that were due and by siphoning off the independent owners’ fees throughanother of his companies, Bushnell Regency Management. Starble says the management company was consistently paid a “bloated management fee” by the association of $11,250 monthly, despite the building’s deplorable condition.
“Ultimately it will be for a court to determine how this kind of behavior should be characterized under the law,” Starble told the Advocate. “But I do know that taking money under false pretenses is illegal and is defined in Connecticut as a larceny.”