In old times, the concept of morality was quite simple. You only knew of two options: good and bad. But in today’s society, the idea of morality has been crumbled so ruthlessly and with so much perplexity that people are bound to question themselves whether it is good to be bad or bad to be good? However, the truth is that neither is right. It is due to some notorious people who rule with the ‘might is right’ theory and poison the culture of justice and goodwill.
Herman I. Kraus is one of those notorious people. He was the owner of the Bedford Gardens apartment complex in Brooklyn, New York.
Commonly known as Kraus Management, it is a company that has been in business for 50 years and is estimated to generate $6.0 million in annual revenues, with around 100 employees working. The owned area is approximately 20,000 square feet.
All the services provided are private, including Kraus Management, Kraus Security, Kraus Maintenance, Kraus & Kraus (for legal problems).
Rising Complaints:
Kraus management claims to provide a quality living place to their tenants. But several complaints related to despicable and despondent conditions also came to be known, including mistreatment with tenants.
An apartment building at 104 Ross Street in Williamsburg, Brooklyn, part of the Bedford Gardens apartment complex, had been without elevator service for four days.
To make things worse, they didn’t seem inclined to fix it despite the numerous phone calls they received from the residents. It’s a severe security issue as it was a seven-story building, with many children, adults and seniors dependent on the elevator.
According to a review on Google by Michelle Rodriguez, the apartments were falling apart. His elderly mother found a leak in her apartment, which made her fall. Nothing was done even after a week.
Getting Away with Taxes and Rent Hikes:
That’s not all. Herman Kraus had been indebted to a massive payment of taxes for decades. Although he has died now, lawsuits against him still keep on piling up.
In 2017, Kraus Organization was ranked at number 10 by The Real Deal on its list of two-generation real estate owners by square feet.
According to the New York Post, he owed more than $100 million. It’s strange how he got away with it since 1991, but the irony is that the city is doing nothing to collect it. This makes him one of the city’s top property-tax scofflaws. Not only is he not paying his taxes, but the worst part is that nobody is going after him.
Officials in Kraus’ company said they need an increase in rent to pay the overdue taxes and held the city responsible for delaying the increase. Bedford Gardens charges $716 monthly charges for a two-bedroom apartment, along with some form of government support for most tenants. A couple of years ago, a 23% increase in rent at Bedford Gardens was approved by HPD. But that decision was overruled by the U.S. Department of Housing and Urban Development, saying that the city did not follow state rules when it applied for rent-hike approval.
Kraus filed a $60 million suit accusing HPD of not following federal regulations, rather than challenging HUD, which gives about $3 million annually in rent subsidies at Bedford Gardens. Bill Notley, the controller of Kraus Management, stated that the rent increase for two years approved by the city in 1991 was insufficient to meet all the expenses at Bedford Gardens.
Criticism Faced:
Herman Kraus had to face a lot of criticism by The New York Times in 1982. It was revealed in an audit that Mr. Kraus authorized nearly $1.5 million in excessive payments for goods and services, mostly provided by companies owned by Mr. Kraus.’
In response, John Scanlon, a public-relations specialist who represents Mr. Kraus, said Mr. Kraus used his own companies because such action was efficient. He said the charges of excessive payments were inaccurate, unfair and unprofessional.
The audit also charged that the high costs included some of the $600,000 in management fees, $349,000 for architectural and design services, $780,000 for security and $150,000 for legal fees collected. Mr. Kraus owns all the companies.
The audit said the high costs resulted in increased rents, which are partly paid by the Federal and city governments.
Eyes on Kraus Management:
Kraus, which has headquarters in Queens and is now run by late founder Herman Kraus’s son Stephen Kraus, has been investigated by HPD and HUD for defaulting on debts.
The spokesperson of Kraus said. “The owners are also committed to meeting all of their financial obligations to the City and are confident that a successful resolution can be reached.”
Final verdict:
For many years now, tenants have complained over and over about the poor service and state of apartments of Kraus property management. Yet, the city keeps pouring tax money into their operation.
It is refutable that they are operating as a monopoly in certain areas of New York, buying large street blocks, filling all sorts of financial reports of the cost of operation. They own “most” of the subcontracting organization operating under them, so technically they have created a system where there is no such thing as a financial loss for them. The reason is they get taxpayers money to keep money flowing through their contractors and subcontractors, which are ALL owned by themselves.
The point is that this company has been taking advantage of New York city Taxpayers and nothing significant has been done about it since the New York Time investigated them back in 1982.
They are notorious for intimidation and favouritism for decades now, and someone has to do something about it.
It is clear that they have a building full of lawyers and probably have politicians in their pockets too, but this is 2019, and someone has to bring them to justice, someone who cannot be bought, someone who knows how to stand by their words.
Readers must bring to light their experiences and come forward to stop this injustice because silence is what makes companies such as Kraus get bigger and get away with their monopolistic and dictatorial tactics.
