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Rabbi living in house of worship not enough to stop foreclosure

The beit hamidrash (house of study) of Congregation Atzei Chaim of Siget on 50th Street in Borough Park. Photo courtesy of Google Maps

Brooklyn Daily Eagle

A Brooklyn judge has allowed property foreclosure to continue despite arguments that a rabbi and his family reside on the premises.

Congregation Atzei Chaim of Siget borrowed $499,000 from State Bank of Long Island (State Bank) and used its building at 1511 50th St. in Borough Park, Brooklyn, as commercial collateral for its mortgage.

Failing to pay the note, State Bank initiated foreclosure proceedings against the organization’s Brooklyn property. The congregation, a religious corporation, filed motions to halt the foreclosure, arguing against the real property classification of 1511 50th St. as a commercial asset.

New York state law requires that tenants be given notice of foreclosure proceedings being levied against their residential dwellings where such property is  "intended principally for occupancy of from one to four families."

The congregation argued that its rabbi, Rabbi Jacob Teitelbaum, used the Brooklyn property as his private residence along with his wife and their eight children.  As the property was being used as a residence, Teitelbaum’s name should have been included on the foreclosure notice, the congregation’s argument continued. Brooklyn Supreme Court Justice Carolyn Demarest found “no merit” in the premise of the congregation’s foreclosure defense.

The Brooklyn property is classified in the New York City Register — which maintains and records all NYC real property transfers — as a religious structure. The portion of the law that the congregation rested its primary argument requires foreclosure notice be given to tenants of residential buildings; religious structures are not residential dwellings.  

Furthermore, the mortgage expressly noted that the property has and will not be improved to accommodate residential dwelling units.

In reaching her conclusion, Demarest wrote: “The property at issue in this action is a religious structure and is not residential real property. The borrower was not a natural person and the debt was not incurred primarily for personal, family or household purposes.”

If the court were to view the congregation’s building as a residential structure, the claim that Teitelbaum was not given proper notice would still fail, Demarest ruled. The congregation did not establish the existence of a “written lease or any other agreement” between Teitelbaum and the congregation, nor did the congregation show that it listed Teitelbaum as a tenant of the property on the mortgage documents.

Joseph Zelmanovitz of Stahl & Zelmanovitz  represented the congregation in this matter, and Steven Rand of Zeichner Ellman & Krause served as opposing counsel.

January 22, 2014 - 4:00pm


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