Kushner pays tenants $100K to cover for rent overcharges

Move comes amid class-action lawsuit alleging illegal deregulation at 89 Hicks Street

New York /
Dec.December 05, 2018 06:00 PM

Charlie Kushner (Credit: Sasha Maslov) and 89 Hicks

Kushner Companies agreed to pay five tenants at its Brooklyn property 89 Hicks Street a combined $100,000 to compensate them for alleged rent overcharges and for illegally deregulating their units.

The company is also returning the apartments to rent-regulated status, Crain’s reported. The move comes in response to a class-action lawsuit filed in April 2017 by tenants with the help of the nonprofit Housing Rights Initiative.

“Once the issue was brought to my client’s attention, it immediately and voluntarily acted in good faith to address the issue,” Rosenberg and Estis attorney Deborah Riegel, who represents Kushner in the case, told Crain’s. “Not only did my client make refunds to the existing tenants, and in some cases former tenants, but it also registered the units as rent stabilized. Rather than wait for an adjudication, as some owners have chosen to do, my client proceeded expeditiously to remedy the issues raised.”

Newman Ferrara’s Lucas Ferrara, who is representing the tenants, countered that Kushner deliberately deregulated the units. “Any landlord worth their salt knows whether the units in a building they’re buying are or should be regulated or not,” he said. “Kushner was aware of the risks and took a gamble that no one would notice what they were doing.”

Ferrara told Crain’s that the payouts won’t stop the lawsuit. Kushner bought the former Brooklyn Law School dorm for $14.3 million in 2014.

Ferrara also represents tenants at 18 Sidney Place, which, like 89 Hicks Street, was a rent-stabilized building before Brooklyn Law School used it for dorms. The academic use of the property allowed the school temporary release from rent stabilization, but if the buildings returned to the market as rentals, they were required to be brought back under stabilization laws, according to the lawsuit. Kushner did not return the units to stabilization when it bought the building in 2014, the suit claims. [Crain’s] — Konrad Putzier


Related Articles

arrow_forward_ios
Blackstone CEO Steven Schwartzman and Stuyvesant Town (Credit: Getty Images)
After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies
After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies
Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws
Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws
Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws
Real Capital Analytics data showed that New York’s multifamily market had a very slow July. (Credit: iStock)
New NYC rent law “beginning to shut down investment”
New NYC rent law “beginning to shut down investment”
Mack Real Estate CEO Richard Mack and one of his new hotels at 51 Nassau Street. (Getty, ING)
Mack Real Estate takes over 7 distressed Manhattan hotels
Mack Real Estate takes over 7 distressed Manhattan hotels
1440 Broadway and CIM Group’s Shaul Kuba (Google Maps, Getty)
CIM closes on $400M refi for 1440 Broadway
CIM closes on $400M refi for 1440 Broadway
Theaters in some cities are opening with restrictions. (Getty, Photo Illustration by Alison Bushor for The Real Deal)
Coming attraction: Movie theaters reopen in New York, San Fran
Coming attraction: Movie theaters reopen in New York, San Fran
Innovo Property Group's Andrew Chung with 23-30 Borden Avenue in Long Island City (Google Maps)
Innovo lands $155M construction loan for LIC warehouse
Innovo lands $155M construction loan for LIC warehouse
Restaurants and bars accounted for a majority of the gains in February (iStock)
Leisure, hospitality big winners in February job gains
Leisure, hospitality big winners in February job gains
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...