NEW YORK – Residents of a building owned by the Kushner Cos. filed a lawsuit Tuesday alleging the business once run by Jared Kushner is charging too much rent in violation of state regulations.
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The lawsuit in New York State Supreme Court in Brooklyn alleges that the Kushner Cos. is charging nine residents much higher free-market rents than the rent-stabilized ones they are entitled to under state rent rules. The suit says it's likely that more than 100 current and former residents of the 48-unit building have also been overcharged, and so it is seeking class-action status.
"Greed colored the owner's decision-making process, and clearly blinded its judgment," said plaintiff's lawyer Lucas A. Ferrara, senior partner at Newman Ferrara. "It's inexcusable for any landlord to sidestep New York's rent law."
A spokesman for the Kushner Cos., James Yolles, said they were reviewing the lawsuit and had no immediate comment.
Apartments in the building had been temporarily exempt from rent stabilization laws under its two previous owners, the Watchtower Bible and Tract Society of New York and Brooklyn Law School, according to the lawsuit. Under state rules, certain landlords who don't rent to the public but use units to house employees or students can apply for exemptions.
The Kushners bought the building from Brooklyn Law School in 2014 and listed units to rent by the public, but they failed to inform tenants that they were entitled to lower rent-stabilization rents, the lawsuit alleges.
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The real estate website Streeteasy.com lists nine two-room apartments currently available to rent in the building for $2,600 per month or more.
Aaron Carr, founder of a nonprofit that investigates violations in rent-stabilized buildings, said some residents are being overcharged $1,000 or more. He said the practice of charging more than permissible appeared deliberate.
"If it was just one or two residents who didn't get rent-stabilized leases, I would say it was an accident," said Carr, founder of Housing Rights Initiative. In this case, the Kushner Cos. "failed to provide rent stabilization for 90 percent of the building."
Jared Kushner stepped down as CEO for the Kushner Cos. earlier this year before becoming a senior adviser to his father-in-law, President Donald Trump. Kushner is married to Trump's daughter Ivanka.
Kushner has sold many properties owned by the family business, and he retains substantial holdings. He still owns the building at the center of the lawsuit, according to his latest financial disclosure documents.
Kushner Cos. has been on a buying spree in Brooklyn in recent years. The company and some partners bought a group of buildings from the Jehovah's Witnesses in 2013 near the Brooklyn Bridge. Last year, it bought a parking lot nearby that it hopes to use for a possible future building.