Elderly Homeowner Fights to Keep Her Five Brownstones

By Kelsey Jean-Baptiste

She came to New York for the American dream, but one Harlem homeowner could find herself losing it all and owing $7 million.

Giselle Allard, 75, who moved from Montreal in the 1990s, purchased five brownstones that are being auctioned off after she failed to pay the mortgage and property taxes on one of them. Her original mortgage for the property was $100,000, but at a 25% interest rate, her debt climbed to $7 million.

One building was auctioned earlier this month; a bank auctioned two more last week at the Marriott Hotel near LaGuardia Airport, and could sell the rest.

“This is like stealing property, and it’s total greed,” said Allard, who is fighting to keep all her brownstones, including the one in which she lives, at 134 W. 119th St. In an interview in her first-floor apartment, crammed to the ceiling with filing cabinets and papers, she sounded determined and defiant.

Sixty people attended the sale by Maltz Auctions at the Marriott, though not Allard.

The starting bid for the first brownstone at 32 W. 120th St. was $1 million. It sold for $2,675,000 to a man who would only identify himself as Bidder 707. He also bought the second brownstone, at 239 Lenox Ave. The starting bid was $400,000; it sold for $2,575,000.

The buyer said his real estate company purchased the two brownstones to fix them up and sell them. “We have done these types of buying before. We are real estate investors,” he said.

Allard intended to turn the brownstones into hostels, she said. She rented rooms to students and tourists. Her trouble began when the first brownstone she’d purchased, at 50 W. 126th St. was auctioned off in early September.

She originally bought the house from the owner Robert Robinson for $135,000, with a down payment of $35,000 and an agreement to pay $100,000 over 10 years. But Robinson died months later, so Allard said she made her payments to his lawyer, but the checks were never cashed. “It took seven years to find someone to collect,” said Allard.

In 2009, Allard said, Robinson’s executor tried to collect the unpaid mortgage and taxes by suing her, arguing the interest rate should be 25% compounded over 10 years, increasing the debt from $100,000 to a little over $7 million.

The case sat in limbo for almost a decade.

“It’s extraordinary to have this high of a default rate, and to have it compounded all these years,” said Steven Wagner, a veteran New York City real estate lawyer. “They are certainly taking advantage of this poor situation.”

Arthur Trakas, Allard’s attorney, tried to get the case dismissed in court. “The outcome here based on an initial $100,000 debt is unjust,” said Trakas. He and Allard are awaiting a decision by Judge Arlene Bluth.

She could decide the case in several ways, said Trakas. She might order Allard to pay the simple interest amount of around $500,000, pay the compounded interest rate of $7 million, or blend the two interest rates.

“With the brownstones now sold, Allard may not have to lose any more properties,” said Trakas. The auction buyers are obligated to forgive the note, so the combined sale prices could be enough to cover Allard’s debt, allowing her to keep the brownstone she lives in, he explained.

Allard’s hope is that she can stay in Harlem, and somehow get back all her properties on an appeal, she said.

“I am a victim. It is literally like you are stealing my house.”

(Photo by Kelsey Jean-Baptiste)