The East Village tenants who took on Kushner Companies, claiming the landlord illegally collected rents while putting their lives in danger, have won the right to proceed with their case, and potentially recoup those payments.
The recent decision by the Appellate Division, attorneys for the tenants claim, could also pave the way for copycat suits.
A Kushner spokesperson did not comment on the lawsuit but said the firm no longer owns the properties. Kushner has offloaded a good chunk of its East Village holdings in the past year.
The case dates back to late 2020 when tenants in four contiguous Kushner buildings on East 9th Street sued the firm for failing to obtain certificates of occupancy — verification of building safety — after adding penthouses to each property.
Instead, Kushner repeatedly filed for temporary certificates of occupancy, claiming the work was ongoing. Those “fraudulent” filings allowed the firm to collect rent without meeting safety requirements, such as installing sprinklers and raising the height of the boiler chimney, the tenants allege.
While Kushner raked in penthouse-level profits, the tenants allege their safety was on the line. Their suit asked the court to bar the landlord from collecting rent until they fixed the hazards and secured certificates of occupancy. They also sought class action status.
The tenants had filed after an investigation by nonprofit Housing Rights Initiative found Kushner was charging rent in eight East Village apartments with expired certificates of occupancy.
At the time, Kushner’s general counsel called the lawsuit “politically motivated harassment.”
In May 2022, a New York Supreme Court judge denied the tenants’ request for class action status and tossed the case on technicalities. But the tenants appealed and late last month, the Appellate Division reversed the lower court’s decision, reinstated the suit and granted the renters class action status.
If the tenants win on the suit’s merits, they could win years of free rent. The tenants, in their initial suit, asked the court to declare no rents were due under the TCOs and until the COs were obtained. As of 2020, the tenants claimed Kushner had illegally collected $4 million.
It’s also possible a settlement could return some of that money.
The tenants’ attorneys Robert Grimble and Robin LoGuidice said the case could also encourage other renters entangled in similar schemes to challenge their landlords over illegal collections.
This article has been updated to include a comment from Kushner Companies and context about the firm’s recent deal activity.
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