Yesterday a Baltimore County judge granted summary judgment in favor of Westminster Management, owned by Jared Kushner, in a law suit brought by Kushner's tenants. The tenants had alleged that Kushner had charged them illegal fees when they were late paying their rent.
Maryland law provides that landlords can not charge their tenants more than 5% of their rent when they are late paying their rent. For Kushner’s tenants, rent was due the first day of each month and they were given a five day grace period. On the sixth day of the month, Kushner automatically charged his tenants the 5% late fee. The tenants did not contest their landlord’s right to charge this fee.
Instead, the suit argued that Kushner’s additional fees violated Maryland law, which limited the landlord’s right to charge a 5% late fee but no more. Along with the 5% late fee, Kushner charged a $10 agent fee and a $20 to $30 summons fee, even when the landlord had taken no action to collect the late rent and thus had not incurred these costs. Kushner continued to charge his tenants subsequent $10 agent fees regardless of whether his company had incurred these fees. When Kushner did file suit to collect the rent, his company charged his tenants an additional $80 for court costs, even though the court costs were only $50. The tenants’ attorney argued:
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.
The Baltimore County judge issued a single paragraph ruling siding with Westminster Management, thereby agreeing that these additional fees were legally charged.
The case has dragged on for two years. The tenants filed their suit in Baltimore County Circuit court, but Westminster removed it to federal court claiming diversity of citizenship, which grants parties the right to try their case in federal court if they are from a state other than that of the opposing party. However, when a federal judge ordered Westminster to reveal the identities of its investors, Westminster moved the case back to Baltimore County.
The tenants’ attorney announced they will appeal the ruling to a higher court. The suit by the Maryland Attorney General remains pending. That suit involves the same fees, which the Attorney General asserts are illegal, an assertion that is now contrary to the ruling of the Baltimore County Circuit Court judge. The Attorney General’s suit also alleges the Kushner rented without proper licenses, and rented out “distressed, shoddily maintained” apartments under “conditions that can adversely impact consumers’ health and well being.” Many tenants
have had to endure living in 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. [Some tenants] have experienced rodent infestations so severe that they have rodents living and dying in walls and kitchen appliances; damaging carpeting and screen doors; and leaving droppings on floors, counter tops and furniture.
In addition, Kushner’s tenants have endured sewage backups, appliances in disrepair, and a management that failed or refused to make repairs.
The Attorney General’s allegations that Kushner rented without proper licenses and that his apartments were shoddily maintained and posed a threat to his tenants’ health were not at issue in the law suit brought by the tenants and for which Kushner has now won.