Kushner Companies pays out $88K in Brooklyn rent stabilization lawsuit

The Housing Rights Initiative has announced the preliminary outcome of a class action lawsuit filed against Kushner Companies in August 2017 on behalf of five former tenants of 89 Hicks Street over the illegal deregulation of rent-stabilized units in the building.

The backstory on the case: HRI alleged that when Kushner Companies bought the Hicks Street building in 2014—which was owned by the Jehovah’s Witnesses, then Brooklyn Law School—it was legally obligated to make the apartments rent-stabilized, since the building dates to before 1974 and had more than six units. (It was temporarily exempt from the city’s rent-stabilization laws while being used for student housing.) The development company only registered 10-percent of the units as rent-stabilized and illegally deregulated the remaining units.

The class action suit alleged that Kushner Companies waged a “deceptive, systematic and pervasive pattern of misconduct to skirt rent stabilization laws,” and may have bilked tenants out of as much as $1 million in rent overcharges.

Now, those five tenants have been awarded a combined $88,419 in damages (at an average of $17,684 per defendant), with interest to boot. While HRI is celebrating the victory, it’s doing so cautiously. In a press release, HRI says that it believes the tenants are owed over $1 million in rent reductions and refunds, and that Kushner Companies neglected to provide rent refunds to former tenants as required by law. “Therefore, the case will proceed,” HRI says.

Shortly after the case was filed in 2017, Kushner Companies took actions to address the allegations at the building by restabilizing all of the illegally deregulated units, providing over $100,000 in rent refunds to class representatives, and providing rent reductions averaging a few hundred dollars per month.

“Kushner Companies giving back some of what it stole is an admission of guilt and its failure to give back everything it stole is an admission of greed,” said Aaron Carr, HRI’s executive director. “Kushner Companies got caught with two hands in the cookie jar and responded to the lawsuit by taking only one hand out. The good news is, we are halfway there.”

The Housing Rights Initiative also recently announced the outcome of a different class action lawsuit filed against Hewlett Associates on behalf of some 80 tenants at 144-90 41st Avenue whose apartments were illegally deregulated. Those tenants will share rent refunds totaling $850,000, with the largest rent refund by unit totaling $26,664.

Correction: An earlier version of this piece incorrectly stated that a class-action lawsuit was filed by HRI against Kaled Management; the suit was filed against Hewlett Associates. Curbed regrets the error.

• Kushner Companies skirted rent-stabilization laws in Brooklyn Heights building: lawsuit [Curbed]
• Kushner Companies subpoenaed over falsified paperwork at rent-regulated buildings [Curbed]