Lawsuit: New owner of big warehouse in Scranton claims former owner misrepresented tenant information

Jim Lockwood, The Times-Tribune, Scranton, Pa.
·3 min read

Jun. 14—SCRANTON — The new owner of a large warehouse in South Side is suing the former owner claiming he misrepresented information about the building's tenants and rents.

JBAS Realty LLC of Jessup, a firm of John Basalyga, recently filed a lawsuit in Lackawanna County Court against Brook Street Holdings LLC of Dunmore and its principal, Joseph Fernandes.

The two companies reached an agreement of sale on Feb. 14, 2020, and the closing occurred July 21, 2020.

Basalyga's business bought the 200,000-square-foot warehouse and several parcels totaling 2.23 acres at 300 Brook St. and Cedar Avenue from Fernandes' firm for $950,000, according to the lawsuit.

It claims Brook Street Holdings made "false, misleading and fraudulent statements" regarding the number and identities of tenants and their square footages and rents.

Fernandes also was supposed to collect prorated rents and turn them over JBAS Realty, but never did, the lawsuit contends.

The suit also claims that after the closing, JBAS Realty discovered the following:

Some tenants had rental terms that were different from Brook Street Holdings' representations; some had fixed rents of varying amount that were not disclosed to JBAS Realty.

Brook Street Holdings did not disclose that one tenant had prepaid three years of rent, with 27 months remaining on that arrangement.

One tenant rented an entire floor without a lease.

Two separate tenants renting spaces for storage were allowed by Brook Street Holdings to operate a dance club and a dog mill.

Brook Street Holdings removed a compressor for a heating unit, which cost JBAS Realty $8,000 to replace.

The lawsuit claims a breach of contract and lists JBAS Realty's damages at $122,713.

The plaintiff is represented by the Spall, Rydzewski, Anderson, Lalley & Tunis law firm of Clarks Summit.

Fernandes deferred comment to his attorney, John Hart of Hart Law in Scranton. Hart said last week he could not comment as they were not aware of the lawsuit, which had not yet been served on Fernandes.

Brook Street Holdings is located at 150 E. Grove St. in Dunmore, according to the lawsuit and agreement of sale that is an exhibit in the complaint.

Meanwhile, in an unrelated matter, Fernandes' building at 150 E. Grove St. in Dunmore was raided by the state attorney general's office on Jan. 22, 2020.

At that time, agents who entered the former Grove Textiles building that housed multiple businesses declined to say why they went inside. It was unknown exactly who or which business the agents targeted at the building that Fernandes owned through a real-estate holding company.

Hart said Fernandes does not know the outcome or status of the raid.

"We've been left in the dark completely about that," Hart said. "As far we as understand, it's still an ongoing investigation."

A representative of the state attorney general's office said in an email that the matter remains under investigation, and the office has no further comment.

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