The Maryland Supreme Court on Monday ruled against an apartment company co-owned by former President Donald Trump’s son-in-law and adviser Jared Kushner in a lawsuit that five former tenants in Baltimore and Baltimore County brought against the business, alleging that it engaged in a scheme that involved charging illegal and excessive late fees.
In the opinion, Chief Justice Matthew J. Fader wrote for the court that rent means “the fixed, periodic payments a tenant is obligated to pay for use or occupancy of the leased premise” and rejected an argument from Westminster Management LLC that the term “encompasses whatever a written lease says it encompasses.” That’s along with holding that landlords cannot allocate monthly payments to other charges and then claim that tenants are behind on their rent.
The justices also ruled that landlords cannot charge tenants who are overdue on their rent any penalties except for a late fee that can be up to 5% of the monthly amount. Westminster Management had a practice of assessing “agent fees.”
“It’s an important victory not just for Westminster’s tenants but for tenants all across the state,” said Andy Freeman, a partner at Brown, Goldstein & Levy in Baltimore, who represents the former tenants and argued the case before the Maryland Supreme Court. “Rent means rent. That’s what most of us think rent means.”
The case dates to 2017 when five people — Tenae Smith, Howard Smith, Simone Ryer, Dechonne McBride and Louvinia Sneed — sued Westminster Management over practices they alleged were illegal, including being charged for fees outside of their monthly rents and having their payments be reallocated toward those extra costs.
In a statement, Tenae Smith said the ruling will allow people “a fair chance to catch up if they fall behind” and result in “more housing stability and support for families.”
C. Matthew Hill, an attorney for the Baltimore-based Public Justice Center and co-counsel on the case, said the court’s decision affirms Maryland’s mission to keep people in their homes.
“If someone is a little late on rent and you hit them with all these fees, suddenly they are very late,” Hill said. “This is the right thing. People should be allowed to catch up.”
The case is set to return to Baltimore Circuit Court to decide whether it should proceed as a class action lawsuit for all tenants who had been subjected to improper fees since September 2014 and then determine damages.
The ruling is yet another blow to the company. Westminster Management agreed in 2022 to pay a $3.25 million penalty and restitution to current and former tenants in a settlement with the Maryland Office of the Attorney General.
“You don’t pay $3,250,000 bucks if you’re not liable,” then-Maryland Attorney General Brian Frosh said at the time during a news conference. “So they may not have formally signed a piece of paper saying that ‘we did it,’ but they did it.”
The parent company of Westminster Management, Kushner Cos., could not be reached for comment.
