A Queens apartment broker stripped of his real estate license more than a decade ago allegedly continued collecting deposits from desperate renters for years, exposing gaps in the city’s consumer protection and housing enforcement systems.
At least a dozen renters say David Michael took deposits ranging from a few hundred dollars to several thousand dollars for apartments they never ultimately rented, then refused to return the money when deals fell apart, according to Gothamist. Court records reviewed by the outlet show at least 24 small claims lawsuits have been filed against Michael in Brooklyn and Queens since 2012.
The allegations follow a familiar script. Renters searching Craigslist for below-market apartments would meet Michael, tour a unit and be asked to submit a “good faith” deposit to hold the apartment.
New York outlawed such deposits in most rental transactions in 2019, citing concerns they were vulnerable to abuse. Still, multiple tenants told Gothamist they paid Michael between $1,500 and $3,500 after being assured the money would be refunded if they were not approved.
Instead, many described stalled applications, apartments that became unavailable or landlords who appeared unaware of the applicants. When renters requested refunds, Michael allegedly offered partial repayment agreements that required them to waive future legal claims.
The complaints stretch back years. In 2015, New York’s Department of State revoked Michael’s real estate salesperson license after receiving 15 complaints and concluding he had demonstrated “incompetence and untrustworthiness.” Investigators accused him of acting as a broker before obtaining a license and failing to return deposits after transactions collapsed.
Yet Michael appears to have remained active in the market, advertising apartments through Craigslist and operating with a storefront labeled the Pyramid Group. He described himself as a “real estate advisor” rather than a broker and disputed allegations that he stole money or engaged in criminal conduct. In a statement to Gothamist, Michael said his company had helped many tenants and landlords and received overwhelmingly positive feedback.
The saga underscores how difficult it can be for renters to recover money even after winning in court. Ten plaintiffs interviewed by Gothamist secured judgments against Michael, but most said they never collected. Small claims courts can award judgments but do not enforce them, leaving successful plaintiffs to locate bank accounts, hire marshals and pursue collections themselves.
The case also highlights a broader challenge for regulators. The state attorney general’s office is reviewing complaints, but local prosecutors have reportedly declined to pursue criminal charges, citing the high burden of proof.
Meanwhile, online apartment listings tied to Michael continue to appear, often targeting renters with poor credit or limited housing options, precisely the tenants advocates say are most vulnerable to abuse.
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