A proposed class-action lawsuit against Brooklyn developer, Two Trees, alleges the company improperly raised rents at its 379-unit building at 300 Ashland Place in Fort Greene while receiving benefits through the 421-a property tax exemption program, according to Hoodline.
The lawsuit was filed Oct. 30 by Newman Ferrara and Housing Rights Initiative. It claims Two Trees applied renewal increases to apartments’ higher legal rents instead of the lower preferential rents tenants had agreed to pay.
The complaint estimates the practice may have increased rents by more than $30 million over five years. The allegations have not been proven in court.
The complaint cites a 20th-floor apartment with a legal rent of $3,990. Two Trees advertised the unit with two months free, reducing its effective monthly price to $3,325.
The lawsuit says applying a renewal increase to the higher figure could produce a 20 percent increase. A promotional concession is not necessarily identical to a preferential rent stated in a lease.
300 Ashland Place opened in 2016 with a 421-a tax benefit. The program provided property tax savings in exchange for housing and rent-stabilization requirements. The case tests how those requirements are enforced.
Brooklyn Council Member Crystal Hudson said she helped alert residents to the group’s investigation.
Two Trees Managing Director David Lombino called the lawsuit without merit and said the company would defend itself, Gothamist reported. The state housing agency declined to comment on the litigation.
The case is in its early stages and no court has ruled on the allegations. Any potential recovery will depend on the legal process, including whether the proposed class is certified.
