Maryland AG Frosh settles with Kushner-owned company over housing terms

A property management company owned by the family of former President Donald Trump’s son-in-law, Jared Kushner, has agreed to pay a $3,250,000 civil fine and restitution to settle a 2019 lawsuit filed by the attorney general of Maryland, Brian E. Frosh (D), who alleged the company was charging tenants illegal fees and housing them in apartments with leaky roofs, excessive mold, rodent infestations and other problems.

The suit alleged that Westminster Management, a subsidiary of Kushner Companies, engaged in “unfair or deceptive business practices” in 17 residential communities located in Baltimore City, Baltimore County and Prince George’s County.

“The tenants weren’t rich people,” Frosh said at a Friday news conference. “Many have struggled to pay the rent, to keep food on the table, to care for their children, to keep everyone healthy, and Westminster has used its vastly superior economic power to take advantage of that.”

While Westminster continues to deny the allegations, the settlement will potentially pay compensation to tens of thousands of current and former tenants.

“Westminster is pleased to have resolved this litigation without admission of liability or wrongdoing,” Kushner Companies chief operating officer Peter Febo said Friday. “We look forward to resolving this issue so that we can focus on our ever-expanding real estate portfolio.”

Frosh said Friday that the company often tricks potential tenants by showing them freshly painted model apartments with new appliances. “But when tenants packed up all their stuff and showed up on moving day, they received keys to run-down units, moldy units, leaking plumbing, pest infestations and faulty HVAC units,” said he declared. .

“Once inside, they couldn’t afford to get out,” Frosh said. “Westminster took advantage of it.”

Frosh said the scale of the violations and the number of tenants affected in the case are the most serious his office has ever seen. At Friday’s press conference, he held up large photos of units whose living conditions he said were “often simply miserable”.

Tiffany Dixon, a mother who lived in a Westminster property with her family for several years, described problems with leaks, mold and rodents. Her youngest son was diagnosed with allergic asthma which she attributed to mould.

Dixon said one night in 2013, after having trouble with her stove, she grabbed a flashlight to take a closer look at some “fluff” inside the oven. “I realized these stuffed animals were dead mice that had been melted down in our oven that I had fed our family with for four years,” she said.

“I expected to receive services that we paid for, so that we could, at the very least, provide our children with a safe and healthy home,” Dixon said. “And as a mum, I feel like with Westminster I failed.”

Several months before the lawsuit was filed, when Trump characterized late Democratic Representative Elijah E. Cummings’ Baltimore-based congressional district as a ‘rodent-infested mess’, Baltimore County Executive Johnny Olszewski Jr. (D) called the insults ironic, pointing to the allegations neglect and disrepair of Kushner’s properties.

The Kushner family has come under intense scrutiny and fierce criticism in parts of Maryland, where they manage a large portfolio of apartment complexes. In 2017, Baltimore County officials revealed that Kushner Company properties had been cited for more than 200 code violations in a calendar year.

Kushner resigned as chief executive of Kushner Companies in 2017 when he became Trump’s senior White House adviser.

The settlement requires Westminster to return what the suit said were excessive filing fees, small credit balances the company improperly withheld and unpaid security deposit interest. It establishes a procedure under which current and former tenants can make claims to a special master, who can reimburse rent to those who have experienced serious maintenance issues like leaks or bedbug infestations. .

The agreement says nothing in it “shall be construed as an admission or concession that [Westminster] violated any law, rule or regulation”.

Asked about it at the press conference, Frosh smiled. “You don’t pay $3,250,000 if you’re not at fault, the administrative judge found they were at fault,” he said. “So they may not have officially signed a piece of paper saying, ‘We did it,’ but they did.”