A judge granted class-action status to tenants in a lawsuit alleging Kushner Companies improperly deregulated a Brooklyn rental building.
The ruling could open Kushner up to damages for any rent overcharges — plus interest — for the six named plaintiffs, 46 additional tenants and any others the court finds were charged too much by the company. The court gave Kushner 45 days to provide names and contact information for all previous residents of the building.
The lawsuit, filed in 2017, alleges that when Kushner bought a former dorm from the Brooklyn Law School in 2014, it was obligated to offer tenants rent-stabilized leases because the building had been rent-stabilized before it was converted to dorms in 1991, but failed to do so.
Kushner purchased the former dorm at 18 Sidney Place along with another one at 144 Willow Street for a combined $7.6 million. In 2017 the company marketed the Brooklyn Heights buildings for three times that figure, the New York Post reported.
That same year a one-bedroom unit rented for $3,800 a month. Now, a two-bedroom, two-bathroom apartment in the six-story brownstone goes for $5,400, according to StreetEasy.
The plaintiffs allege that only two of the Sidney Place building’s 19 units were subsequently registered as rent-stabilized. They have asked the court to rule that the rest of the units should be rent-stabilized, determine a legal rent for each unit, and assess damages for rent overcharges.
Kushner has called the lawsuit meritless from the outset.
“All of the units at 18 Sidney were rented at appropriate rates and in accordance with applicable law — including every facet of New York’s rent stabilization laws and rent stabilization code,” said general counsel Christopher Smith. “The plaintiffs and their politically motivated enablers have intentionally misrepresented and misinterpreted governing law in an effort to convert lawful market-rate units into rent-regulated units.”
The case stems from an investigation by tenant rights group Housing Rights Initiative, which has partnered with law firm Newman Ferrara on a number of rent-stabilization lawsuits targeting large landlords including Blackstone and the Scharfman Organization. The group has filed dozens of similar lawsuits in recent years, alleging landlord schemes to increase rent above what is legally permitted.
Aaron Carr, executive director of Housing Rights Initiative, said he hoped the class-action motion would put every “predatory landlord” in New York City on notice that “if we catch you cheating tenants, you will be summarily crushed with the iron fist of the law.”
Lucas Ferrara, an attorney at New York-based Newman Ferrara, is representing the plaintiffs.