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Kushner Companies illegally removed Brooklyn apartments from rent stabilization program, lawsuit alleges

Jared Kushner's real estate company, Kushner Companies, allegedly took 16 Sidney Place in Brooklyn out of rent stabilized status illegally, according to a lawsuit filed Tuesday. / Google Maps

Jared Kushner’s real estate company allegedly took a Brooklyn building out of rent-stabilized status illegally, according to a lawsuit filed Tuesday.

Housing Rights Initiative, a nonprofit watchdog group, claimed Kushner Companies purchased 18 Sidney Place from an academic institution in 2014 and registered only 11 of its 18 units as rent-stabilized. All of the units in the Downtown Brooklyn building should have been deemed rent-stabilized, but the state Department of Homes and Community Renewal did nothing to correct the error, according to the Housing Rights Initiative.

“Kushner Companies is exploiting a power imbalance: They have lawyers and their tenants do not,” the initiative’s executive director, Aaron Carr, said in a statement. “And like a bully on the playground, Kushner loves an unfair fight.”

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Residential buildings with more than six units constructed before 1974 fall under the rent stabilization program, but various factors and conditions allow landlords to take units out of the program.

The Sidney Place building was previously exempted from the rent stabilization laws because it was used for student housing. But the Housing Rights Initiative said that exemption became moot the minute the building was sold to a private landlord.

Kushner Companies, however, maintains that it fully renovated the empty apartments at 18 Sidney Place, which brought them up to fair market value under city rent regulations.

“We have reviewed the lawsuit and it is without merit,” the firm said in a statement. “Kushner Companies has always aspired to be a leader in good management practices and how people live in general. The only predatory conduct here is that of Aaron Carr, who seems bent on attacking responsible owners in the press for the sake of sensational headlines.”

The Housing Rights Initiative contends that tenants in the building are entitled to rent-stabilized leases, rent reductions and refunds.

The nonprofit noted that Tuesday’s lawsuit was the second case it has filed against Kushner Companies for allegedly removing rent-stabilized units from the program.

Carr urged the state to audit Kushner Companies’ portfolio and ensure it abides by housing laws.

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“It is time for the New York State Government to commence an investigation into Kushner Companies’ business practices,” Carr said in a statement. “If they fail to act, we will continue to act.”