A Baltimore judge on Thursday ruled against five area tenants who had brought a lawsuit claiming an apartment company owned by White House adviser and presidential son-in-law Jared Kushner had engaged in unlawful rental practices, including by charging improper fees and threatening evictions to force payment.
The ruling represented a victory for Westminster Management at a time of intense scrutiny over its business practices in the state, including through a separate and still-pending consumer protection lawsuit on behalf of other tenants in which Maryland Attorney General Brian Frosh has accused the company of a raft of regulatory violations.
Attorneys for Kushner said Thursday’s ruling showed the company operates lawfully, and that Frosh should take note.
“This is a huge victory for all landlords against baseless claims," said Emily Wolf, general counsel for the company. "We were confident that the truth would prevail. We will continue to operate as best-in-class landlords.”
“It is good to see that the law and justice prevail over political motivations and personal agendas," said Michael Blumenfeld, an attorney for Westminster and another defendant company associated with Kushner, JK2 Westminster LLC.
Kushner is married to President Donald Trump’s daughter Ivanka and heir to his family’s Kushner Cos. real estate firm. He stepped down as the firm’s CEO upon becoming a senior adviser to the Republican president in 2017, but did not divest from some of its properties — including Westminster.
Officials with Kushner Cos. have repeatedly alleged that claims against Westminster and its partners in the region in recent years, including those from Frosh, a Democrat, were politically motivated, though Frosh and attorneys representing the tenants who have sued have denied that.
Baltimore Circuit Judge Philip Jackson on Thursday issued a one-page order granting Westminster’s motion for summary judgment in the two-year-old civil case, agreeing with the company that it shouldn’t proceed. Jackson did not write a full opinion, instead siding with Kushner in a single written paragraph in which he also praised “exhaustive and excellent submissions” from both parties in the matter.
Andrew Freeman, an attorney for the tenants, said they will be appealing the ruling to the Maryland Court of Special Appeals and remain “optimistic” they will prevail.
The case hinges on the two parties’ varying interpretations of a state law limiting what can be charged by landlords when tenants are late on their rent payments. The law says tenants can be charged no more than 5% of the late rent.
Freeman said for his clients, rent was due the first of each month, and they were given a five-day grace period after that. On the sixth day of each month, Westminster would automatically charge the 5% late fee, he said.
However, he said his clients were also charged additional fees, including a $10 agent fee and a $20 to $30 summons fee related to Westminster’s litigating the lack of payment — at times when the company had not filed a “failure to pay” action that would serve as the basis for the fees.
Freeman said Westminster also charged his clients subsequent $12 agent fees that it never incurred, as well as additional $80 summons fees at times when the court was charging $50.
“These are working-class tenants. Nobody wants to be late on their rent. But if they are in a hard place and they are late, the landlord is entitled to charge a 5% late fee. That is supposed to cover all of the costs associated with collecting late rent. Yet they’ve been adding in various other fees," Freeman said. “We’re disappointed in today’s ruling. We’re optimistic that it will get straightened out on appeal.”
The tenants’ lawsuit was initiated in state court in 2017, then bounced to federal court at the request of Westminster. It was later remanded back to state court, again at Kushner’s request, as the company sought to avoid revealing the names of investors.
The five tenants in the case had sought to make their lawsuit a class action, though that effort was denied. Tenae Smith, the lead plaintiff in the case, remains a tenant in Dutch Village, a Westminster-run property in Northeast Baltimore. The four other plaintiffs have since moved out of Westminster properties, Freeman said.
Frosh’s office said Thursday that it did not expect Jackson’s ruling to have any impact in the separate litigation brought by its Consumer Protection Division against the company in October. But Ty Kelly, an attorney for Kushner in the latter case, said it should, as the ruling “confirms several of the legal positions” the company has taken in that case.
“We are hopeful that the Attorney General takes notice of the judiciary’s ruling and respects the sound ruling of the court,” Kelly said.
Frosh claimed that Westminster operated without proper licenses and charged tenants “sham” fees while renting out “distressed, shoddily maintained” apartments and townhomes in the region, at times subjecting tenants to "units that are infested by rodents and vermin, plagued with water leaks that have caused mold and other issues, and, at times, lacking in basic utilities.”
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In response, Kushner Cos. CEO Laurent Morali has lambasted Frosh as "an ambitious Attorney General who clearly cares more about scoring political points than fighting real crime and improving the lives of the people of Maryland,” and dismissed his allegations as “bogus.”