Maryland Attorney General investigating Kushner-owned apartments

The Maryland Attorney General’s office is investigating the rental practices at Baltimore-area apartment complexes owned by the real estate company of senior White House adviser Jared Kushner, the company confirmed Monday.

“We have been working with the Maryland Attorney General’s Office to provide information in response to its request,” said Christine Taylor, a spokeswoman for the Kushner Cos. in New York City. “We are in compliance with all state and local laws.”

A spokeswoman for Attorney General Brian Frosh, a Democrat, said the office never confirms or denies the existence of any investigation.

Kushner, the son-in-law of President Donald J. Trump, was CEO of the Kushner Cos. from 2008 until Jan. 19, when he stepped down to join the Trump administration. He retains ownership of the firm.

It was unclear what, specifically, the attorney general’s office would be investigating. The company is being sued by tenants who allege the firm charges them improper fees and then uses the threat of eviction to collect.

Frosh has been a critic of the use of civil arrest warrants to pressure tenants to pay outstanding rent and other debts.

Since 2013, the first full year in which the Kushner Cos. operated in Maryland, corporate entities affiliated with the firm's 17 apartment complexes here have sought the civil arrest of 105 former tenants for failing to appear in court to face allegations of unpaid debt, The Baltimore Sun has reported.

That’s the most by any property manager in the state during that time. Court records show that 20 former Kushner tenants have been detained.

The Kushner Cos. operates nearly 8,800 units in Maryland, most of them in Baltimore County. They generate at least $90 million in revenue annually, according to prospectuses by the mortgage giant Freddie Mac, and at least $30 million in profit, according to financing documents provided to investors who hold the mortgages.

Three of the portfolio's apartment complexes — Dutch Village in Northeast Baltimore, Carriage Hill in Randallstown and Highland Village in Lansdowne — received $6.1 million in federal rental subsidies since Jan. 1, 2015, according to records obtained through a Freedom of Information Act request. That's money that helps the poor pay rent.

A White House representative told The Sun in April that Kushner would recuse himself from any policy decisions related to vouchers administered by the U.S. Department of Housing and Urban Development, or HUD.

Congressional Democrats from Maryland have been trying since August to get the Kushner Cos. to provide information about rental practices to help them determine if the company is in compliance with HUD rules. A Kushner Cos. attorney said in August that the company is in compliance with the Housing Choice voucher program, also known as Section 8.

The vouchers have helped 268 tenants pay rent at the Kushner properties, finance records show. Apartments rented for an average of nearly $950.

Baltimore County renters filed a class action lawsuit in 2015 challenging the collection tactics of Sawyer Property Management, a partner of the Maryland Kushner affiliate Westminster Management. Tenants claimed the firms violated the state's Consumer Protection Rights Act by pursuing money without a debt collector's license.

The Maryland Court of Special Appeals disagreed in November.

“Each complaint failed to state a claim under the Consumer Debt Collection Act or under the Consumer Protection Act,” the court wrote.

Two tenants of Kushner’s Westminster Management properties in Baltimore and Baltimore County filed a new class action lawsuit in Baltimore last month alleging the firm has been charging improper fees and threatening eviction to force payment.

In the lawsuit, the tenants allege Westminster improperly applied tenants’ rent payments to allegedly overdue fees for other services, prompting more late fees and threats of eviction, and perpetuating a cycle of debt.

The nonprofit Public Justice Center said Westminster officials charge tenants “excessive, illegal fees, regularly misapply tenants’ subsequent payments in part to the illegal fees, and then deem the next rent payments ‘late’ to justify additional excessive fees.” A Kushner Cos. spokesman said the company “will respond to the complaint at the appropriate time in the legal proceedings.”

ddonovan@baltsun.com

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