Attorney Linda Leali. Courtesy photo

Residents of several apartment buildings in Miami's Liberty City and Overtown for years have been dealing with leaky units, mold-like paste on walls and overall structural disrepair. They might be poised for relief.

Seven buildings are in for renovations under new ownership following nearly five years of court battles — all stemming from allegations that the previous owner was a slumlord who left the apartments to deteriorate.

These aren't public housing or officially designated as affordable but with rents around the $600s, they still are a reprieve to low-income residents from the ever-rising Miami rents.

It all started years ago when residents and the city raised issues with the poor living conditions. In October 2014, the city sued the owner to enforce $2.5 million in violation liens and for injunctive relief to stop new leases until the issues were fixed.

The buildings are owned by limited liability companies, but state Division of Corporations records show the LLCs are affiliated with Abraham and Denise Vaknin of Englewood Cliffs, north of Fort Lee, New Jersey.

Some properties had sewer problems, some properties had balconies and windows in disrepair, some didn't have fire extinguishers, and others didn't have government-required recertification, according to the complaint. Permits to address the issues had been pulled for some of the buildings, but the work wasn't done.

The city prevailed when the owner failed to respond to the complaint by deadline. Miami-Dade Circuit Judge Barbara Areces entered a final judgment for the city and set $3.1 million in damages plus interest in 2015. The judge agreed with the city to appoint attorney Linda Leali as receiver for the properties.

As the state case evolved, the properties headed to a sheriff's sale in April 2018 to satisfy the judgment. But the owners obtained an automatic stay by filing for Chapter 11 bankruptcy protection. The Vaknins' LLCs were the debtors.

Their attorney, Gary Murphree, said Friday that the Vaknins weren't entirely to blame for the buildings' conditions because they bought them in poor shape.

“It's not like the Vaknins took over nice, perfectly managed properties and drove them into the ground. The properties were distressed when they bought them. They were spending some money to do repairs, but I guess they weren't spending enough,” said Murphree of AM Law in Miami.

The couple brought five properties into compliance and in that way “recognized their obligations as the owner,” Murphree said.

The city sued over nine properties, and eight of them made their way through bankruptcy.

NEW CHAPTER 

The buyers of six properties — community fixtures and cousins Peter and Nick Politis, who head local fruit and vegetable supplier Mr. Greens Produce — plan major renovations at a cost of $1.8 million after fixing pressing problems.

“They were just completely a mess,” Peter Politis said. “The work includes brand new bathrooms, brand new HVACs, brand new air conditioners, brand new roofs, brand new kitchens, brand new of everything.”

The Politises through an affiliate closed on the $6.55 million purchase last October after U.S. Bankruptcy Chief Judge Laurel Isicoff approved the private sale.

They bought a 27-unit building at 1250 NW 62nd St., a 21-unit building at 1231 NW 61st St., a 21-unit building at 6040 NW 12th Ave., a six-unit building at 1335 NW 60th St., an adjacent six-unit building at 1341 NW 60th St., and the 20-unit building at 1710 NW First Court.

Residents of the first building have been relocated for the building overhaul.

But don't expect the Politises to renovate, raise rents and gentrify. The Politises said they aren't in it for big profits. They have an affinity for the communities after years of working to better struggling Miami neighborhoods, and their Mr. Greens Produce is based in Liberty City and employs area residents.

Rents at the renovated apartments will range from $750 to $825 for one bedrooms, and $1,000 for two bedrooms, up from the current range of $575 to $750 for the twos but still below the market rate that's way up in the $1,000s.

Disheila Dumas, who rents a one-bedroom unit at the 62nd Street building, said she is willing to pay more as long as the owners take care of the mold-like paste that keeps reappearing on her walls and keep her unit maintained.

“I don't have a problem paying $750 as long as my apartment is in good condition,” said Dumas, who now pays $695.

Isicoff approved a settlement last December to resolve the fate of the two remaining buildings.

A boarded-up 22-unit building at 6820 NW 17th Ave. was transferred to the city, and an eight-unit building at 1730 NW First Court was retained by Vaknin affiliates.

The settlement said $1.4 million was remitted to the city to cover liens and accrued interest on six properties. The city agreed to deem the property at 1730 NW First Court, which the owners kept, up to code but retained the right to inspect it four times a year on short notice.

The 17th Avenue building will reopen as affordable housing with the city's Department of Housing and Community Development calling soon for developers to do renovations.

The settlement also discharged receiver Leali, who at one point was the property custodian.

Attorney Ido Alexander, a partner at Leiderman Shelomith Alexander + Somodevilla in Miami, represented the LLCs in the bankruptcy case.

Isicoff confirmed the debtors' reorganization plan April 9 with the resolution of all but two pending claims by Leali. The debtors dispute the claims and set aside $1.15 million in a reserve account for a potential payment.

The debtors also did a 1031 exchange when selling the properties, allowing them to defer taxes on any capital gains as long as they use these gains to buy similar properties. The debtors bought three properties in New Jersey, Alexander said.