Md. renters accuse Kushner company’s subsidiaries of illegal rental practices

Daily Record Legal Affairs Writer//September 27, 2017

Md. renters accuse Kushner company’s subsidiaries of illegal rental practices

By Heather Cobun

//Daily Record Legal Affairs Writer

//September 27, 2017

FILE - In this July 24, 2017 file photo, White House senior adviser Jared Kushner speaks to reporters outside the White House in Washington. The White House says President Donald Trump will be sending three senior officials to the Middle East in coming days to discuss prospects for resuming the Israeli-Palestinian peace process. (AP Photo/Pablo Martinez Monsivais, File)
White House senior adviser Jared Kushner speaks to reporters outside the White House in Washington in July. (AP Photo/Pablo Martinez Monsivais, File)

Two Maryland renters filed a proposed class-action lawsuit Wednesday alleging the property management companies owned by Jared Kushner’s family’s real estate company operating their apartment complexes charge excessive and illegal fees.

Westminster Management LLC and its affiliated businesses own some 8,000 apartments and townhouses in Maryland, according to a May article in the New York Times Magazine detailing Kushner’s real estate holdings.

The two plaintiffs – Tenae Smith, who lives at Dutch Village apartments in Baltimore city and Howard Smith, (no relation) who lives in the Carroll Park Apartments in Baltimore County – claim the defendants violate Maryland law by charging and collecting impermissible fees and filing eviction proceedings even if the rent is current.

The Public Justice Center, which represents the plaintiffs, called the practice a “fee-churning scheme” in a news release announcing the lawsuit.

“I would pay my rent, and if I was late, I would pay a 5 percent late fee, but the fees kept adding up,” Tenae Smith said in a prepared statement. “One time I paid the rent, and they sent back my check telling me that I needed to pay an additional $150 in fees or they wouldn’t take my rent. I work full-time and made regular payments, but they kept taking me to court for eviction and piling on the fees. I just want to keep my family safe and stable as the kids go back to school.”

Kushner, who is President Donald Trump’s son-in-law and a senior White House adviser, is not a named defendant in the proposed class-action. Westminster Management is a unit of the Kushner Cos., a family-run, New York-based business that owns, manages and develops properties nationwide.

A spokesman for Kushner Cos. said Wednesday that the businesses have complied with Maryland laws and “intend to vigorously defend ourselves against these allegations.”

‘Deplorable scheme’

The complaint alleges Westminster charges tenants a late fee that was 5 percent of their rent and additional costs like utilities, contrary to the law that limits a late fee to 5 percent of the delinquent rent. In addition to the late fee, Westminster charged an agent fee and a court fee before the eviction proceeding had come before the court, states the complaint, filed in Baltimore City Circuit Court.

The standard lease language used at Westminster properties also allowed the company to allocate rent payments toward the fees then claim the tenant was late on rent and trigger additional fees, according to the complaint.

“Adding small but improper fees to the rent of tenants living paycheck to paycheck, then misallocating rent payments to those fees in order to generate more fees, is a scheme that preys on working-class tenants,” attorney Andrew D. Freeman said in a prepared statement. “Westminster Management’s misuse of Maryland courts’ eviction proceedings to force tenants to pay these improper fees makes this scheme all the more deplorable. It must be stopped.”

Freeman, of Brown, Goldstein & Levy LLP in Baltimore, is one of the attorneys partnering with the Public Justice Center to represent the plaintiffs along with attorneys from Santoni, Vocci & Ortega LLC in Towson.

The plaintiffs are asking the court to certify a class of Westminster renters who are or were tenants at Maryland properties since September 2014 and subject to the lease provisions and practices alleged, according to the lawsuit. The class consists of several hundred tenants, according to the complaint.

The lawsuit alleges violations of Maryland’s law on late fees for rent, Maryland Consumer Debt Collection Act and Maryland Consumer Protection Act as well as unjust enrichment and breach of contract. The plaintiffs seek declarations that late fees should be calculated by including only the monthly rent still owed, that the defendants may not collect late fees when the rent is on time and that rent cannot be defined to include other charges or fees.

The case is Tenae Smith et al. v. Westminster Management LLC et al.


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