Kushner Cos hit with class-action suit over illegal rent collection

East Village tenants allege developer illegally collected rent based on false certificate of occupancy

Charles Kushner and 329-335 East 9th Street (Google Maps, iStock)
Charles Kushner and 329-335 East 9th Street (Google Maps, iStock)

UPDATED, Sept. 17, 2020, 9 a.m.: Tenants in four East Village buildings owned by Kushner Companies have filed a class-action lawsuit against the developer, alleging that it illegally collected more than $4 million in rent in buildings where shoddy construction work was done.

The lawsuit, filed in New York State Supreme Court Tuesday, further alleges that the developer filed fraudulent documents with New York City’s Department of Buildings and never received a proper certificate of occupancy after completing construction work in the four buildings.

The tenants in the lawsuit want to stop the firm from collecting rent until the buildings receive a proper certificate of occupancy. CNN first reported the news.

Kushner Companies general counsel Christopher Smith said in a statement, “This is just more of the same politically motivated harassment.”

Kushner Companies acquired the four buildings at 329-335 East 9th Street in 2013, when the firm was still run by Jared Kushner, now a senior advisor to President Trump. (Jared Kushner was not named in the lawsuit). The buildings were previously owned by Icon Realty Management.

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According to the lawsuit, Kushner Companies added an extra floor and penthouses to each of the 9th Street buildings, a change that required the company to install operable sprinklers and other fire safety measures. The company was also required to obtain a Temporary Certificate of Occupancy (TCO) or a Certificate of Occupancy (CO) for the building once the work was complete.

But those sprinkler systems are not working, according to tenants who live in the buildings — and Kushner Companies falsely claimed that they’re operable in paperwork it submitted to the DOB. The buildings have still yet to receive a CO, which would require a full inspection of the properties, according to the complaint.

The lawsuit, which is based on an investigation by the nonprofit watchdog group Housing Rights Initiative, is the latest in a string of complaints brought against Kushner Companies. In March, a housing court judge ruled that tenants living at another East Village building owned by the developer will not have to pay rent until the real estate firm secures a CO for the building. Smith cited a recent New York Housing Court decision stating Kushner Companies has a proper partial TCO until November for its building at 331 East 9th as an argument against the class action suit.

In response, the lawyer representing the tenants in the Housing Court case, Robin LoGiudice from the law firm Grimble & LoGuidice, said the two cases are “vastly different.” LoGiudice said the Housing Court ruling can only provide limited relief for Kushner Companies’ alleged misuse of TCOs.

UPDATE: This story was updated to include a statement from Kushner Companies and the lawyer in the class action lawsuit, as well as the details of a recent decision issued by New York Housing Court. Additionally, a previous version of this article incorrectly stated that Kushner Companies purchased the buildings on East 9th Street from Magnum Real Estate Group. Kushner bought the buildings from Icon Realty Management.