Estimated reading time: 7 minutes.
Key facts
- Case: A proposed class action by tenants of 300 Ashland Place in Fort Greene, Brooklyn, against developer and landlord Two Trees. The court and index number were not reported, and we could not locate the filing.
- Filed: Friday, October 30, 2026, according to Gothamist.
- Who brought it: The law firm Newman Ferrara, working with the nonprofit Housing Rights Initiative.
- Core allegation: At renewal, Two Trees allegedly applied rent increases to the higher "legal rent" of rent-stabilized apartments instead of the lower rent tenants had been paying.
- Amount alleged: The lawsuit claims the practice raised rents by more than $30 million over five years. That figure has not been tested in court.
- Two Trees' response: Managing Director David Lombino called the lawsuit "entirely without merit" and said the company will "vigorously defend" against it.
- Status: No court has ruled. No class has been certified, and there is no settlement or claim process.
In this article
- What the lawsuit claims
- Why these apartments are rent stabilized
- Legal rent and preferential rent explained
- The 20th-floor example
- What Two Trees and others say
- What is still unknown
- What tenants at 300 Ashland Place can do
- What happens next
- Frequently asked questions
A new proposed class action accuses Two Trees, one of Brooklyn's best-known developers, of illegally raising rents at 300 Ashland Place, a 379-unit tower in Fort Greene that receives a property tax break in exchange for keeping its apartments rent stabilized. The lawsuit was filed on October 30, 2026, Gothamist reported.
We have not reviewed the complaint itself. This article is based on Gothamist's report, which cites the complaint and interviews, and on official guidance from New York's housing agency and the city's Rent Guidelines Board explaining the rules at issue. Everything the tenants claim is an allegation.
What the lawsuit claims
The case was filed by Newman Ferrara in coordination with Housing Rights Initiative, a nonprofit that investigates landlord practices. The two groups have brought similar cases against other large New York landlords, according to Gothamist.
The lawsuit claims Two Trees applied renewal increases to the full legal rent of stabilized apartments, rather than to the lower rent tenants had agreed to pay when they moved in. The complaint describes seven apartments, according to Gothamist, and claims the practice increased rents by more than $30 million over the past five years. Housing Rights Initiative Executive Director Aaron Carr spoke to Gothamist about the case.
"When landlords pocket taxpayer subsidies while legally overcharging tenants, they are cheating the public twice," Carr said. "Once through the rent they steal, and again through the tax dollars they collect."
Why these apartments are rent stabilized
300 Ashland Place opened in 2016 and receives a 421-a tax exemption, Gothamist reported. The 421-a program lowered property taxes on new residential buildings in New York City for many years. In return, owners generally had to register apartments as rent stabilized, even high-priced ones.
Rent stabilization limits how much the rent can go up when a tenant renews. Each year the New York City Rent Guidelines Board sets the maximum percentage increases for one-year and two-year renewal leases. Its current order says those percentages also apply to apartments in buildings receiving the 421-a exemption. For leases starting between October 1, 2025, and September 30, 2026, the limits are 3% for a one-year lease and 4.5% for a two-year lease.
Carr told Gothamist the board "has not approved an increase higher than 3.25% since 2021." The board sets separate rates for one-year and two-year leases, so the comparison depends on which lease term a tenant chose.
A tax break with strings attached 421-a buildings can rent at market-level prices when they open. Once a tenant moves in, though, renewal increases are governed by rent stabilization rules, not by what the market will bear.
Legal rent and preferential rent explained
Every rent-stabilized apartment has a "legal regulated rent," the maximum the owner may lawfully charge. Owners sometimes agree to charge less. That lower amount is called a "preferential rent."
Before 2019, landlords could often drop a preferential rent at renewal and jump to the full legal rent. The Housing Stability and Tenant Protection Act of 2019 changed that. According to New York State Homes and Community Renewal (HCR), the agency that oversees rent regulation, for leases in effect on or after June 14, 2019:
- The renewal increase must be applied to the preferential rent the tenant was paying, not to the legal rent.
- The owner can charge the higher legal rent only after the tenant moves out.
- To keep the higher legal rent for the next tenant, the owner must list both rents in the lease.
HCR adds that certain government regulatory agreements may not be bound by this limit, and tenants should contact the supervising agency in those cases.
The 20th-floor example
The complaint uses a 20th-floor apartment to illustrate the alleged practice, according to Gothamist. The apartment's legal rent was $3,990, based on a listing included in the complaint. Two Trees advertised it with two months free, which brought the effective monthly cost down to $3,325.
At renewal, the lawsuit says, Two Trees applied the increase to $3,990 instead of $3,325. Compared with what the tenant had effectively been paying, that would be a potential 20% rent hike, the lawsuit states.
Carr said landlords often use move-in deals this way. "So the landlord can wait for the rental market to heat up before pulling the concession or simply eliminate it at the first renewal," he told Gothamist.
Free months and preferential rent may not be the same thing The example involves a "months free" deal rather than a lower monthly rent written into the lease. Whether that kind of discount must be treated as a preferential rent is likely to be a key question for the court.
What Two Trees and others say
In a written statement to Gothamist, Two Trees Managing Director David Lombino said the lawsuit is "entirely without merit."
"Frivolous litigation like this drives up the already extraordinary cost of building and operating housing in New York City," he said. "We intend to vigorously defend against these claims."
Seth Glasser, a partner at real estate investment firm Marcus & Millichap, described such overcharge claims to Gothamist as "foot faults," saying "the penalty is so much worse than the infraction."
City Council Member Crystal Hudson, who represents Fort Greene, said she sent mailers to residents about the Housing Rights Initiative investigation. A spokesperson for HCR declined to comment on the litigation.
What is still unknown
Several basic facts were not available when we published:
- The court where the case was filed and its index number.
- The full list of legal claims and exactly how the proposed class is defined.
- How the $30 million estimate was calculated.
Some other websites gave a different filing date. We use October 30, the date Gothamist reported, and will update this article if the complaint becomes available.
What tenants at 300 Ashland Place can do
Current and former tenants who want to check their own rent history have options that do not depend on this lawsuit:
- Request your apartment's rent registration history from HCR online at rent.hcr.ny.gov or at a borough rent office. It shows the rents your landlord has registered over time.
- Compare the legal rent and preferential rent listed in each of your leases with what you were charged at renewal.
- If you believe you were overcharged, HCR says you can file a rent overcharge or lease violation complaint with the agency or go to court. Overcharge complaints generally look back six years.
Your rent history is free to request You do not need a lawyer to get your apartment's registration history from HCR. It is the starting point for checking whether renewal increases followed the rules.
Your own complaint and a class case can affect each other, so it may help to speak with a tenant lawyer or legal aid group first. You can also browse class action cases you can join. For another case about how rents are set, see our coverage of the RealPage rental software antitrust settlement. This article is for information only and is not legal advice.
What happens next
Two Trees will have time to respond to the complaint, and it may ask the court to dismiss the case. If the case continues, the tenants would later ask the court to certify a class. Any refund of overcharges would depend on a court ruling or a settlement.
Frequently asked questions
What is the Two Trees rent lawsuit about?
Tenants claim Two Trees raised renewal rents at 300 Ashland Place in Brooklyn by applying increases to the higher legal rent instead of the lower rent tenants were paying, in violation of rent stabilization rules.
Who filed the lawsuit?
The law firm Newman Ferrara, working with the nonprofit Housing Rights Initiative, on behalf of tenants of the building.
What is a preferential rent?
It is a rent the landlord agrees to charge that is lower than the apartment's legal regulated rent. Since 2019, renewal increases on preferential rents must be based on the lower amount.
What does 421-a have to do with this?
300 Ashland Place receives a 421-a property tax break. In exchange, its apartments are rent stabilized, so renewal increases are limited by the Rent Guidelines Board.
How has Two Trees responded?
Two Trees called the lawsuit "entirely without merit" and said it will vigorously defend against the claims.
Can I join the lawsuit or get money now?
Not yet. No class has been certified and no settlement exists. Tenants can request their rent history from HCR to check their own rents.
