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Kushner Business Hit With Class Action Alleging Rent Overcharges

By Andrew Denney

Kushner Cos. has been hit with another lawsuit regarding Jared Kushner's conduct as a landlord, this time accusing him of charging market-rate rents to tenants of an apartment building in Brooklyn that was supposed to be rent-stabilized.

The proposed class action, filed on Tuesday in Brooklyn Supreme Court on behalf of tenants living at 18 Sidney Place in Brooklyn Heights, which Brooklyn Law School formerly used for student housing, is the third suit filed in recent months regarding business practices at the Kushner family’s real estate holdings.

Jared Kushner, son-in-law and adviser to President Donald Trump, stepped down as CEO of Kushner Cos. in January.

The latest suit accuses the firm of flouting New York City’s rent-stabilization code by offering tenants market-rate leases.

According to court papers, the building at 18 Sidney was rent-stabilized when it was sold to Brooklyn Law School. Because they were used for student housing, the units were temporarily exempted from rent stabilization laws.

Kushner Cos. purchased the building in 2014, court papers state, and began renting out properties. The plaintiffs say that rent stabilization should have resumed at that point.

The Housing Rights Initiative, a nonprofit that advocates for tenants rights found out about the alleged overcharging of tenants at 18 Sidney Place while investigating similar complaints from tenants at 89 Hicks Street, another Brooklyn property formerly used by Brooklyn Law School and added to the Kushner portfolio in 2014.

In August, the tenants at 89 Hicks Street filed a proposed class action alleging that they have been overcharged for rent.

“It fits into an overall pattern of them circumventing the law to enhance their bottom line,” said Aaron Carr, executive director of the Housing Rights Initiative.

The nonprofit has teamed up with law firm Newman Ferrara to fight on the tenants’ behalf in both cases; Newman Ferrara attorneys Lucas Ferrara, Jarred Kassenoff and Roger Sachar Jr. appear on the brief.

In a statement, Kushner Cos. spokeswoman Christine Taylor said the latest suit is “without merit.”

"The previously empty apartments at 18 Sidney Place were fully renovated to bring them to fair market value in accordance with applicable NYC rent regulations," Taylor said in the emailed statement. "Kushner Cos. has always aspired to be a leader in good management practices and how people live in general. The only predatory conduct here is that of Aaron Carr, who seems bent on attacking responsible owners in the press for the sake of sensational headlines.

” In September, two tenants living in Kushner-controlled properties in Maryland filed a proposed class action alleging that they were charged illegal fees. Last week, the suit, which was originally filed in Baltimore City Circuit Court, was removed to the U.S. District Court for the District of Maryland.

Kushner Cos. is also the target of a federal probe into how it used a program that grants visas to wealthy foreigners.