New York state officials have opened an investigation into Jared Kushner’s real estate firm after a $10 million lawsuit alleged it tried to force out tenants in rent-stabilized apartments.
The company was managed by Kushner, President Donald Trump’s son-in-law, before he became a senior adviser at the White House in 2017.
The lawsuit, first reported by The Associated Press, claims Kushner Companies has approved relentless construction at Austin Nichols House in Brooklyn since 2015 as a way to increase turnover at the building, and has threatened the health of its tenants in doing so.
That’s against state law, Gov. Andrew Cuomo’s administration said in a press release Monday. Landlords are not allowed to do anything that would cause a tenant to leave their apartment, including behavior that interferes with the tenant’s privacy or comfort, the release said.
The investigation is being handled by the Tenant Protection Unit, an office within the state Division of Homes and Community Renewal that reviews complaints of tenant harassment.
If the office alleges in its findings that Kushner Companies broke state law, it can refer evidence to the office of Attorney General Barbara Underwood or Brooklyn District Attorney Eric Gonzalez for criminal prosecution. The tenants could also agree to settle with the company.
HCR Commissioner RuthAnne Visnauskas said in a statement that the agency will refer the investigation to prosecutors if they find evidence of tenant abuse.
“Gov. Cuomo has zero tolerance for tenant abuse of any kind and we will aggressively take on landlords who try to intimidate people out of their homes,” Visnauskas said. “In New York, no one is above the law, and we will thoroughly investigate the appalling allegations of harassment at this or any related property and hold anyone found guilty of such abuse responsible to the fullest extent of the law.”
Jack Lester, a housing litigation attorney with his own practice in Manhattan, is representing the tenants in the lawsuit that sparked the state investigation. He said the company not only violated the tenants’ rights during construction but also did not follow city and municipal building codes.
“It was like living through the 10 plagues,” Lester said. “During the period of construction, while tenants were in occupancy there was a breach in the warrant of hability because the tenants didn’t receive basic services.”
There has been overwhelming dust in apartments at times during construction, Lester said, including crystalline-silica from work on the building’s facade. Prolonged exposure to crystalline-silica can cause lung cancer, according to the U.S. Occupational and Health Safety Administration. The tenants also claim the construction has caused exposure to airborne lead because of the age of the building.
The lawsuit contains several complaints from tenants during construction, which started in 2015 and is still ongoing. They claim there was sporadic flooding, a chronic rodent infestation, damage to ceilings, walls and windows, an influx of raw sewage, exposed wires, loss of hot water, and more.
“He was doing it in disregard to the tenants that were living there,” Lester said. They are seeking punitive damages of at least $10 million.
Lester worked with the New York City-based Housing Rights Initiative to prepare the lawsuit, which was filed in Brooklyn Supreme Court on Monday.
It’s not the first time the Housing Rights Initiative has worked on a case against Kushner Companies. New York City Councilman Ritchie Torres launched an investigation into the company in May after an investigation by the HRI claimed Kushner Companies had falsely claimed in filings that there were no rent-regulated units in 34 of its buildings.
Kushner Companies was confident in a statement sent Tuesday that the state’s investigation would end in their favor.
“Kushner Companies respects and values its tenants and that is how we built such a great and successful business for more than 35 years,” the company said. “There have been no complaints to the DHCR regarding any type of harassment or unsafe conditions. We are confident that the TPU will reach the conclusion of no harassment when they finish the rent review announced today.
“We understand the current political environment. Sadly, we are caught in the middle and continue to have baseless and meritless claims filed against us. Nonetheless, we will continue to develop first rate projects and provide our tenants with a great product,” the company said.