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Kushner Cos. hit with another rent-gouging suit

A second lawsuit alleges residents paid market rates for what should have been rent-stabilized apartments

Aaron Elstein By
Jared Kushner
Photo: Associated Press
Jared Kushner retained ownership in two properties claiming the company overcharged them, according to financial disclosure documents.

The real estate company controlled by Jared Kushner's family has been sued again for overcharging Brooklyn Heights tenants by collecting market rates for apartments whose rents should have been regulated.

Today's suit, brought by six tenants at 18 Sidney Place, mirrors a complaint brought in August by residents at 89 Hicks St. Tenants in both cases seek refunds and unspecified damages from Kushner Cos.

"Kushner's misconduct was not an isolated event but rather was part of a systematic scheme," said Aaron Carr, executive director of the Housing Rights Initiative, a nonprofit that examined rent histories at both buildings, where tenants are represented by the law firm Newman Ferrara in suits that seek class-action status.

Describing the company as a "rapacious predator," Carr called on the governor's Division of Homes and Community Renewal to audit the Kushner family's holdings to see if residents at other apartments are being overcharged.

"The feds are investigating Kushner Cos., Maryland is investigating Kushner Cos., and a tiny nonprofit with the budget of a nickel is investigating Kushner Cos. But where is Cuomo?" Carr asked. A Cuomo administration spokesman didn't immediately return a request for comment.

The Kushners acquired the Sidney Place and Hicks Street residences in 2014 as part of a deal to buy six buildings from Brooklyn Law School for $36 million. Because the apartments had previously been available only to law students, they were exempt from state and city rent-regulation laws, which limit the amount landlords can raise rents each year. But that exemption expired when the Kushners acquired the properties and started marketing them to the general public. According to the lawsuit, the Kushners failed to offer rent-stabilized leases as required by law.

The 6-story building at 18 Sidney Place contains 18 units that rent for about $3,100 per month on average, according to StreetEasy. Typical rent-regulated apartments in the area cost around $1,500 a month. That suggests Kushner Cos. overcharged tenants by about $19,000 a year on average.

A spokesman for Kushner Cos. didn't immediately respond to a request for comment. The firm over the summer reportedly began looking to sell 18 Sidney and another building for $20 million. Jared Kushner, President Donald Trump's son-in-law and adviser, has divested some of his holdings in his family's company but retained ownership in 18 Sidney Place and 89 Hicks St., according to federal financial disclosures.

Complaint against Kushner Cos. by Peter D'Amato on Scribd