NIAGARA FALLS, N.Y. (WIVB) – New York Attorney General Letitia James has requested a receiver to sell a dozen properties owned by a Niagara County couple that admitted in 2020 to renting uninhabitable and unsafe apartments and using scare tactics to collect late rent.
The action is necessary, the attorney general said, because Nicholas and Sharon George, of Lewiston, failed to comply with an August 2020 agreement that required them to divest in and be barred from any landlord businesses by Nov. 1, 2021.
Proceeds of the sales were to be used for repairs of apartment units, and the Office of the Attorney General had to approve each property sale.
The married couple, who split time in New York and Arizona, operated an illegal landlord business with 29 residential properties, most of which were in the City of Niagara Falls. The attorney general said the Georges lacked experience as landlords and did not have consistent maintenance of the properties.
As a result, many properties received code violations for plumbing problems, infestations of insects and vermin, and not having operable smoke detectors. Authorities have condemned some properties, where tenants had gone without heat, water and electricity.
The attorney general said the couple rebuffed an offer to extend the deadline if they hired a reputable property manager to take over the remaining 12 properties in the City of Niagara Falls, including three on McKoon Avenue, and two each on Chestnut Avenue, Devaux Street and Bell Street.
In addition, the attorney general said a $50,000 penalty is immediately due, whereas it would have been suspended if the couple had honored the agreement.
Documents filed Wednesday by the attorney general show the email communications her office had with an attorney for the Georges, in which they discuss the sale of properties to a limited liability corporation without the written approval of the Office of the Attorney General.
Assistant Attorney General Christopher Boyd on Aug 13, 2020, inquired about the proposed transfers and said a tenant contacted the state claiming Nicholas George reached out to him for rent payment for the new limited liability company, which would also be a violation of the 2020 agreement.
“Please instruct your clients to unwind these transactions within two weeks, or we will treat this as a breach of the [agreement],” Boyd wrote in the email.
William Berard, the attorney for the Georges, responded that the transfers were done as a “panic move” by Nicholas George before being hired to represent him. He also noted that Nicholas George is “clearly aware of the spirit and intent” of the 2020 agreement and “would not do anything to intentionally violate the agreement.”
The attorney general filed more email communications from late 2021, in which Boyd and Berard discuss extending the property sale deadline, but only if the Georges hired a reputable property manager to take over operations.
“If we are unable to reach an agreement on this issue we may need to move forward with appointment of a receiver,” Boyd warned in a Dec. 14, 2021, email to Berard.
Berard wrote back the same day that there may be a “possible solution”, but Nicholas George was out of town.
Boyd inquired again with Berard for an update on May 6, 2022.
“There is no need for a property manager,” Berard wrote back. “The contract has been signed and all title documents have been ordered (and many have already been received). Right now the purchaser is conducting his due diligence.”
In February, Berard emailed Boyd copies of legal documents from the Georges, but Boyd declined to accept them.
“As you know, the Georges are already in violation of the [agreement] by, inter alia, failing to complete the Property Sale by the Sale Deadline,” Boyd said.
Boyd also warned that the forbearance of the $50,000 penalty is now “purely discretionary and an effort to facilitate an orderly disposition of the properties.”
Berard responded within the hour that he was “disappointed” by Boyd’s “abruptness.”
Berard said selling the remaining properties has “proven to be more than challenging” after his clients “wasted close to 12 months in trying to sell everything to Neighborhood Housing, only to have them pull their offer when all was said and done.”
Berard strongly disagreed that the Georges are in violation of the 2020 agreement “because we have continuously discussed extending the deadline to close within reason.”
The final email communications the attorney general filed is from May, when Boyd gave a July 17, 2023, deadline for the sale of any remaining properties.
Berard said his clients twice had deals to sell the properties, but one client pulled out of the deal after 12 months, and the other ended up returning five of the 10 parcels that the Georges sold to them.
“As I’ve advised on several occasions, the fact that all of the parcels are not sold is not due to the lack of diligence on Nick’s part,” Berard wrote back on May 21.