Buffalo Developer To Reform Business Practices

Attorney General Spitzer announced today that a Buffalo businessman who duped scores of low-income people into renting, leasing or buying ramshackle homes has agreed to reform his business practices and make repairs to many of his rental properties.

"New Yorkers have every right to expect that the properties they rent, lease or buy will meet basic standards of habitability and safety," said Attorney General Spitzer. "As this case demonstrates, my office will do all it can to hold developers to these standards."

New York Senator Byron Brown, whose district includes many of the properties covered in the settlement, commented on the resolution of the case, saying: "I want to commend Attorney General Spitzer for forcing repairs to dozens of city properties under this settlement. City of Buffalo residents deserve the best possible living conditions."

The agreement announced today resolves a lawsuit brought against Scott Wizig, operator of NY Liberty Homes, LLC. Wizig lives in Houston, Texas. Liberty Homes is located at 904 Broadway in Buffalo.

In the fall of 2000, Wizig bought 280 dilapidated homes in poor Buffalo neighborhoods at an average price of $2,200. Wizig sold 10 of these properties at prices that were as much as 10 times higher than his original purchase price. He leased 34 of the properties for a total option purchase value of nearly $1.1 million. And he rented another 80 properties, 40 of which had an option to buy. The homes are in the East Side, Lower West Side and Black Rock neighborhoods of Buffalo.

An investigation by the Attorney General's Office determined that many of those properties were in deplorable condition. The homes frequently had failed heating systems, no water or gas, inoperable toilets, leaking roofs, collapsed ceilings and exposed electrical wiring -- all of which are violations of housing codes.

In addition, Wizig's leases and rental contracts contained illegal provisions that held tenants responsible for repairs he was legally required to make and forced tenants to pay double the cost of repairs he performed.

In November 2002, the Attorney General's Office sued Wizig and obtained a restraining order halting his illegal real estate sales and rental practices.

Today's settlement, which was filed with Justice Peter Notaro in New York Supreme Court, Erie County, resolves that lawsuit.

Under terms of the agreement, Wizig is liable for $250,000 or more in housing repairs, rental credits, rescinded mortgages, restitution and other costs.

Among other provisions in the agreement, Wizig and Liberty Homes must:

• Cease renting properties without assurances that all mechanical, electrical, plumbing and waste systems are in working order;
  
  
• Cease issuing leases that require tenants to sign away the warranty of habitability;
  
  
• Make all rental unit repairs not necessitated by tenant misconduct;
  
  
• Pay $750 to each buyer who was not provided with required disclosures;
  
  
• Give tenants rent credit for repairs that should have been made by Liberty Homes;
  
  
• Give tenants rent credit for option payments at the tenants request;
  
  
• Forgive $167,000 in mortgages for consumers who rescind their home purchases; and,
  
  
• Pay $20,000 to the Attorney General's Office for restitution to tenants and to cover costs of the investigation.

"Purchasing a home is the most important financial decision many people make," said Attorney General Spitzer. "Make it wisely. Protect yourself. Buying a home should be the realization of a dream; not the start of a nightmare."

The Attorney General's Office recommends that consumers contemplating purchasing a home hire an appraiser to determine the value of the house; have the house inspected by a professional housing inspector to determine whether repairs are needed; and hire a real estate lawyer to protect their interests in the transaction.

The case was handled by Assistant Attorney General James Morrissey of the Attorney General's Buffalo Regional Office.