Madeleine O'Neill//January 31, 2023
//January 31, 2023
Maryland’s second-highest court has revived claims by a group of Baltimore-area tenants who sued an apartment management company owned by Jared Kushner, the son-in-law of former President Donald Trump.
The tenants will now get a second chance to pursue a class-action lawsuit and damages against Westminster Management LLC over fees the company charged tenants when they made late rent payments.
In an 89-page unreported decision, the Appellate Court of Maryland found that under state law, landlords can only charge up to 5% of the month’s rent as a fee when a tenant pays late. Charging more than that amount violates the law, and tenants can pursue legal claims against landlords for those violations, the court ruled.
Westminster is known as a prolific filer of evictions at the 17 properties and more than 9,000 rental units it manages in Maryland, according to court papers.
Tenants claimed in their lawsuit that the company routinely refused to drop eviction cases until renters paid their past due rent, the 5% late fee and any additional fees, such as filing costs for the eviction.
Though the extra fees were often fairly small, they posed serious financial challenges to struggling tenants and added up as a source of profit for the company, said Andrew Freeman, a lawyer with Brown, Goldstein & Levy LLP who represented the tenants.
“Threats of eviction shouldn’t be used to try to collect any fees other than rent, and certainly not fees that are prohibited by law,” Freeman said. “Hopefully this opinion will stop a variety of those practices. It’s really important to tenants struggling to pay their rent and feed their kids.”
The appellate court’s decision means the case will return to Baltimore City Circuit Court, where tenants will have another chance to pursue class certification and damages against Westminster. A circuit judge previously granted summary judgment in favor of Westminster and denied the tenants’ request to certify a class of plaintiffs who were harmed by the company’s practices.
The Appellate Court of Maryland found that the tenants showed they were at risk of “irreparable injury” because of the extra fees.
“Emotional stress, fear of eviction, parents being forced to delay or deprive their children of educational and extracurricular opportunities in order to avoid eviction are paradigmatic examples of injuries for which ‘monetary damages are difficult to ascertain or are otherwise inadequate,’ ” Judge Christopher B. Kehoe wrote in the opinion.
The opinion exhaustively outlines Westminster’s arguments and largely rejects them, sometimes in blunt terms. In one example, Westminster argued that the tenants did not have the right to sue over the company’s conduct under the section of Maryland law that governs residential leases.
“We decline Westminster’s invitation to pretend that (Real Property Section) 8-208(g) does not exist,” Kehoe wrote.
Lawyers for Westminster did not return phone calls requesting comment Tuesday. Kushner Companies, which owns Westminster, did not respond to a phone message requesting comment.
Kushner, who is married to Ivanka Trump, stepped down as CEO of Kushner Companies when he joined the Trump White House, but still has an ownership stake in Westminster.
The management company has faced repeated legal troubles related to its rental practices.
Westminster settled last year with the Maryland Attorney General’s Office over claims that the company ignored serious maintenance issues at apartments it managed and charged renters illegal fees.
The settlement included a $3.25 million penalty, though Westminster could offset that amount by $800,000 if it paid that much to tenants who filed claims for poor maintenance or the return of improper fees.
An administrative law judge also found in 2021 that the company had repeatedly violated Maryland’s consumer protection laws.C