Two Trees Faces Lawsuit Over Alleged Rent Hikes

Residents of a Brooklyn complex claim the firm illegally inflated rents beyond city-regulated limits.

Updated on Oct. 30, 2026 in Apartments

Two Trees Faces Lawsuit Over Alleged Rent Hikes

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Should large landlords be allowed to use rent concessions to bypass rent increase limits?

A class-action lawsuit filed against real estate developer Two Trees accuses the firm of overcharging tenants at its 300 Ashland Place building. The suit alleges the company improperly calculated rent increases using legal rather than preferential rates, impacting hundreds of residents.

Why it matters

The case centers on compliance with the 421a property tax break program, which requires landlords to keep units rent-stabilized in exchange for tax incentives. Allegations suggest this practice inflated tenant costs by more than $30 million over the past five years.

The lawsuit claims Two Trees increased rents by more than $30 million over five years at the 379-unit 300 Ashland Place complex. Since 2021, the city Rent Guidelines Board has capped annual rent increases at 3.25% for stabilized units.

The players

Two Trees

This real estate development and management firm owns more than 4,000 apartments across New York City and maintains a portfolio valued at approximately $4 billion.

Rent Guidelines Board

This New York City agency is responsible for establishing the annual rent adjustments for rent-stabilized apartments throughout the five boroughs.

The details

The complaint alleges Two Trees used rent concessions to lower the initial price of units, then calculated subsequent renewal increases based on the higher legal rent rather than the actual discounted price. This tactic allegedly resulted in hikes significantly exceeding the annual percentage limits set by the city for rent-stabilized properties.

The 379-unit building at 300 Ashland Place opened in 2016.
The city Rent Guidelines Board capped annual rent hikes at 3.25% beginning in 2021.
The 421a tax break program expired in 2022.
The class-action lawsuit was filed against Two Trees on October 24, 2026.
The deadline for construction under the 421a tax break program is 2031.

Culture Shift

The legal challenge highlights the broader tension between developers seeking to maximize revenue and the strict regulatory requirements governing New York City housing. This reflects a growing scrutiny of how firms manage rent-stabilized units following the expiration of the 421a property tax break program.

Residents of rent-stabilized buildings may need to review their lease renewal notices to ensure rent increases align with city-mandated percentage caps. Those who suspect they have been overcharged may consult legal resources or tenant advocacy groups to understand their rights under current local regulations.

The takeaway

Tenants in large developments should verify whether their rent increases comply with city guidelines rather than applying only to the stated legal rent. Understanding the difference between preferential and legal rents can help renters identify potential discrepancies in their lease agreements.