Lawsuit: Rent at Kushner properties inflated illegally

Tenants of a second building owned by the company of Jared Kushner's family filed a lawsuit Tuesday over rent that they say is inflated illegally.

The lawsuit in state Supreme Court in Brooklyn filed by six residents at 18 Sidney Place in Brooklyn alleges that Kushner Cos. is charging much higher free-market rent, rather than the rent-stabilized rate required by law.

The Kushner Cos. said it's done nothing wrong and that the higher rent reflects renovations done at the apartments.

"We've reviewed the lawsuit and believe it is without merit and that we have complied with all rent regulations applicable to the apartments," company spokeswoman Christine Taylor said.

The case follows a lawsuit filed in August by nine residents of another Kushner building in Brooklyn. Both cases were filed by the law firm Newman Ferrara, which is seeking class-action status for both cases.

Jared Kushner stepped down as CEO of the Kushner Cos. earlier this year before he became a senior adviser to his father-in-law, President Donald Trump. He has divested from many properties, but still has interest in both buildings at the center of the two lawsuits, according to his latest financial disclosure report filed with federal ethics officials.

The lawsuit on Tuesday alleges that tenants at all the units at 18 Sidney Place should have been charged rent-stabilized rates. It says there may be more than 75 former and current residents who were charged too much rent in the nearly four years since Kushner Cos. bought the building.

The nonprofit tenant advocacy group Housing Rights Initiative behind both lawsuits said Tuesday that the Kushner Cos. has "brazenly and systematically" exploited tenants, and called for New York Gov. Andrew Cuomo to open an investigation into dozens of its buildings.

Apartments at 18 Sidney Place had been temporarily exempt from rent stabilization laws under its previous owner, the 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 in February 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.

The company reportedly is looking to sell the building, along with the one cited in the earlier lawsuit at 144 Willow Street. A New York Post article in July said the Kushner Cos. was asking about $20 million for the two properties. City records show the company bought the two buildings for $7.6 million.

The Kushner Cos. has also drawn scrutiny for its management of multifamily apartments elsewhere. In October, it confirmed that it is cooperating with a request from the Maryland attorney general for information about its operations in the state following media reports critical of its treatment of tenants at apartments it owns there.

That also followed a lawsuit against Kushner Cos. by two tenants of Maryland properties alleging that it had charged them illegal fees. The company has denied the charges and said it will fight the lawsuit.

The Kushner Cos. has been on a buying spree in recent years, including several buildings in Brooklyn. The company says it has struck more than $2 billion in deals in two years.