Tenants Sue Kushner Business for Rent Law Violations
A group of tenants in Brooklyn, New York has sued the Kushner Companies, claiming that the business has systematically violated the state's rent laws.
The Kushner Companies is the family firm of Jared Kushner, the son-in-law of President Trump. Kushner is a White House advisor tasked with (among other things) achieving peace between Israel and the Palestinians.
According to the New York Times, the lawsuit was filed on behalf of nine tenants but more than 100 current and former tenants could have similar claims.
One claim involves a one-bedroom apartment rented for $2,500 per month. Allegedly it should have been rented for no more than $1,000 per month based on rent-control laws.
The claims for over-charges in a single building could total more than $1 million.
In 2014, the Kushner Companies bought the 48-unit building in Brooklyn Heights. The building had previously been owned by the Watch Tower Bible and Tract Society and by the Brooklyn Law School. Since those organizations didn't rent apartments to the public, the building was temporarily exempt from state rent stabilization laws even after it was sold.
Under New York law, buildings with six apartments or more built before 1974, and new buildings that receive certain tax breaks, must register the units and comply with the state's rent stabilization laws. Landlords may only increase rents based on formulas set by the city and state.
The tenants' lawsuit claims that Kushner Companies failed to provide rent-stabilized leases for tenants of the Brooklyn Heights building after the temporary exemption expired.
Housing Rights Initiative, a nonprofit group, found similar issues with more than 50 other Kushner apartment buildings.
The Kushner Companies did register a few units in the Brooklyn building as rent-stabilized. A spokesman for Housing Rights Initiative said that this showed the failure to register the majority of the units was not an accident. He told the Times:
Rent overcharges or rent fraud is part of a systematic business model. When you see irregularities in a few buildings, that mostly likely means there are irregularities in all of their buildings.
Kushner is no longer CEO of his family company. He divested a small part of his ownership of his family business before taking his White House position, but is still the majority owner of the business, which owns more than 20,000 apartments and almost 14 million square feet of office space.
The value of the business held by Kushner and his wife, Ivanka Trump, is estimated to be around $761 million.
The Kushner Companies have also been criticized for seeking the arrests of 105 former Maryland residents of the company’s properties who failed to appear in court over claims that they had not paid their rent debts.
Critics say that the arrests, called "body attachments," punish people for being poor and bring back "debtors' prisons" out of Charles Dickens novels.
According to The Week, 20 former Kushner tenants were detained, and a dozen filed for bankruptcy to avoid being arrested.
The tenants claimed that they hadn't received proper notice of the court dates.