As reported by The Daily Record and The Baltimore Banner, the Appellate Court of Maryland has held that, under Maryland law, landlords can only charge up to 5% of the month’s rent as a late fee when tenants are late in paying their rent — and not the myriad fees and charges claimed by Westminster Management, owned by Jared Kushner’s family, under its form leases. In a 90-page opinion issued on January 30, 2023, the court rejected 27 separate defenses Westminster attempted to raise in its effort to prevent the tenants from obtaining a full refund of all the illegal fees it charged since September 2014 and an injunction against future illegal fees.
The court rejected Westminster’s arguments that attempted to justify its practice of charging both a 5% late fee and a slew of illegal and excessive charges related to the late payment of rent and collection efforts by Westminster. Westminster then threatened tenants with eviction if tenants did not pay those additional, unawarded “agent fees,” “summons fees,” and excessive “writ fees.”
Westminster Management turned these illegal fees into a profit center at the over-9,000 rental units it operated in Maryland. While the individual fees may have seemed small, they were significant to the tenants. The court summarized the damages the tenants described as “emotional stress, fear of eviction, parents being forced to delay or deprive their children of educational and extracurricular opportunities in order to avoid eviction.”
In September 2022, Westminster agreed to pay $3.25 million to settle similar claims brought by the Maryland Attorney General, but, as part of that settlement, Westminster continued to deny that it had violated Maryland law or the tenants’ rights. In its opinion, the Appellate Court made clear that Westminster’s actions defining its numerous fees as “rent” do indeed violate the law and rejected Westminster’s arguments that Maryland landlords may impose any charges beyond a 5 percent late fee when a tenant is late in paying his or her rent.
The court’s opinion allows the tenants to return to the trial court to seek a final determination of liability, damages, and an injunction on behalf of a class of all Westminster tenants who paid these illegal fees.
“[The decision] is a complete victory on all of the legal claims we brought against Westminster,” Andy Freeman, who represents the tenants, told The Banner. “[The fees] add up if they happen in multiple months, and landlords in Maryland just need to stop — they can’t charge those fees at all unless they are awarded by a court.”
The fees were often relatively low — around $20 or $30 each time a tenant was late, Andy added. “But to tenants living paycheck to paycheck and making tough choices of, ‘Should I pay my rent on time or should I feed my kids?’ and choosing to feed [their] kids, it’s really important.”
Andy and Anisha are also fighting for justice for tenants in a class-action case against Morgan Properties Management Co., which charges that the company engaged in similar practices. An appeal in that case was stayed pending a ruling in the Westminster case.
The plaintiffs are represented by BGL partners Andrew Freeman and Anisha Queen, C. Matthew Hill of the Public Justice Center, and Chelsea Ortega, Jane Santoni, and Matthew Vocci of Santoni, Vocci & Ortega.
PLEASE FIND MEDIA COVERAGE BELOW
Maryland tenants win victory in class action lawsuit against Jared Kushner’s apartment company | The Baltimore Banner (January 31, 2023)
Maryland tenants suing Jared Kushner’s apartment company win victory on appeal | The Daily Record (January 31, 2023)
Tenants’ lawsuit against management company owned by Kushner family allowed to proceed, Maryland appellate court rules | The Baltimore Sun (February 2, 2023)