Friday, 24 February 2023 07:44

Settling With Kushner Companies Was Hard. Getting Money to Former Tenants May Be Harder.


A decade ago, Jasmine Cox was living with her young son in the Cove Village rental complex in Essex, Maryland, just east of Baltimore, when she started experiencing a plague of problems. The bedroom ceiling started leaking one day, then maggots started coming out of the living room carpet, and then raw sewage started flowing out of the kitchen sink, she said. She stopped cooking to keep food away from the sink. With so much black mold around, her son started needing an inhaler. When she moved out soon afterward, the landlord, Westminster Management, sent her a $600 invoice for a new carpet and other repairs.

The experience haunted her for years. So she was hit with a welter of emotions when she recently received a letter at her new home from the Maryland attorney general, alerting her that she could apply for restitution from Westminster, the property management arm of Kushner Companies, the family real estate company of Jared Kushner, former President Donald Trump’s son-in-law and a former senior adviser to the president. She has started going through old SD cards and photo-storage apps to find pictures of the apartment woes to submit with the claims form that accompanied the letter. “We were living in a biohazard,” she said. “I’m just glad something has come about to compensate people, to clear things up.”

The letter and claims form are part of a massive, highly unusual effort on the part of the attorney general’s office: trying to alert some 30,000 people who lived in Westminster Management’s 17 Baltimore-area complexes during the past decade that they may be eligible for restitution. In 2017, the office launched an investigation of the company following a report co-published by ProPublica and The New York Times Magazine on the company’s aggressive pursuit of current and former tenants over allegations of unpaid rent and poor upkeep of many of the units, which New Jersey-based Kushner Companies started buying in 2012 and has mostly sold off in recent years.

Last September, the office’s Consumer Protection Division announced a settlement with Westminster: a $3.25 million fine and the promise of uncapped restitution to tenants of the complexes who could show that they had suffered serious maintenance troubles that Westminster was slow to address. Under the settlement, Westminster would also automatically reimburse tenants and former tenants for excessive fees they had been charged over the years in addition to their rent.

Now comes the hardest part: finding the tens of thousands of people who resided at the Westminster Management properties to let them know about their chance at restitution, a task made all the more challenging by the high levels of transience at the complexes. Just 8,700 of the 30,000 people who were mailed claims forms by a claims administrator since mid-December are still living at the complexes.

“Some people won’t be reachable,” acknowledged then-Attorney General Brian Frosh in an interview with The Baltimore Banner when the settlement was announced in September. “Some people will say, ‘Oh my God, I can’t take days off work again to go do this, I mean what am I going to get out of it?’” He guessed that fewer than half of eligible tenants will participate in the process.

By the end of January, 281 claims had been filed. “It’s a little lower than we expected,” said Attorney General Anthony Brown, who took office last month.

The attorney general’s office is contacting tenants to confirm that they’ve received the claims form, according to spokesperson Aleithea Warmack. Any money left over from the initial $800,000 slice of the settlement set aside for tenant restitution will go to a fund to pay for attorneys for people facing eviction, according to recent legislation. If the restitution exceeds $800,000, the company will have to pay that amount on top of the $3.25 million penalty.

Among those the state and Westminster have so far failed to reach is Andre Willingham, a longtime resident of Dutch Village, a complex on the northern edge of Baltimore. The 58-year-old, who is on disability from injuries sustained from years working as a restaurant cook, has lived at the complex with his family for nine years, but he said he had not received anything in the mail.

If he had received it, he said, he would have filed a claim, listing the problems he experienced in the family’s two-bedroom unit, for which they pay $1,100 in rent: rodents, a broken toilet, no heat. But he worried about the fact that he did not have documentation of the problems. “It’s a sad thing they’re just coming out with it,” he said.

Separate from the restitution process for maintenance problems, which requires submitting a claim by Dec. 19, many tenants will be receiving reimbursements for fees they were improperly charged by Westminster. This will not require them to send in claims forms; the company is required to compile a list of eligible tenants by May and send them payments by August.

Those claims alone will likely total several hundred thousand or even a million dollars, Brown estimated. The attorney general’s office will follow up in early 2024 to confirm that payments were successfully deposited or, if not, to make sure former tenants who are owed money are located. Current and former tenants will also have a second opportunity to seek damages for the improper fees in a class-action lawsuit that won a successful appeal last month.

The claims process for maintenance-related issues is somewhat more cumbersome — and the first stage relies on Westminster. The company will make an initial determination of how much compensation claimants are owed. If the tenants are not satisfied, they can elect to have their case heard in court or remotely by retired state Judge Nathan Braverman, who was retained by the attorney general’s office as a special master in the cases, according to Brown. “The rules of evidence are relaxed,” Brown said, adding, “You don’t have to prove any amount of damages — it’s presumed that you suffered damages.”

It’s an approach that he believes his office is the first in the country to implement. “We really think that it’s novel, and we think it can be an effective way to really get recovery for these aggrieved renters.”

But how many current and former tenants will actually take advantage of this process remains an open question, and one that will have a big impact on how much money Westminster is actually required to pay out.

For one tenant, the process has so far proved disappointing. Bonita Barrett, a retired grocery worker, contended for years with a slew of maintenance problems in her unit at Dutch Village, including leaks, mold, and a lack of heat. She was excited to receive the letter and claims form, and checked off most of the 10 upkeep problems listed as eligible for compensation before mailing it off. “They was thieves,” she said. “I hope we get what we deserve.”

But last week, Barrett got a call from a New Jersey number in response to her claims form. The woman on the line told her that she was eligible for $200 in compensation, which Barrett found insultingly inadequate for everything she had dealt with over the years. “$200? That’s nothing compared to what I went through,” she said. “You’re just going to offer us something to say you’re doing something. They’re just trying to give us the cheapest amount they can.” (In response to questions, Kushner Companies Chief Operating Officer Peter Febo wrote: “Westminster takes the Consent Order seriously and continues to comply with it in all respects. The mechanics and details of the claims process were agreed to between the Consumer Protection Division and Westminster.”)

Barrett said the woman told her that she could not qualify for a larger sum because she did not have evidence of the extent of the problems; the woman noted that Westminster’s records showed 16 completed work orders for her unit. But, Barrett said, that didn’t address how long it often took to complete that work.

On the call, the Westminster representative told Barrett that if she was unsatisfied with the $200 settlement, she could appeal to the special master. But that struck Barrett as unappealing. Wasn’t the purpose of this extended process to keep tenants from having to fight Kushner Companies again? The attorney general’s office had designed the appeal process to be as consumer-friendly as possible, but that’s not the impression she got from the call.

“She said you can go to court, but how long would that take? That could take as long as they did here,” she said. “It took them long enough to get to where we are now.”

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If you think you’re eligible to receive settlement money and want more information, you can call the claims administrator at 410-581-0800. If you are a tenant with a complaint you’d like the attorney general’s office to look into, you can call the housing unit within the Consumer Protection Division at 410-528-8662.