A new lawsuit filed on October 30 accuses Brooklyn developer Two Trees of overcharging rent-stabilized tenants at 300 Ashland Place in Fort Greene. The plaintiffs, a law firm and housing nonprofit, allege that some renewal increases were calculated using a higher “legal rent” instead of the lower rent tenants actually paid. They estimate the alleged overcharges exceeded $30 million over five years.
These are allegations, not court findings. Two Trees disputes the claims and says it will defend itself. But the case raises a useful question for renters across New York City: When your lease shows two different rents, which one should guide your renewal increase?
Legal rent vs. preferential rent
The legal regulated rent is the maximum rent an owner may generally charge for a rent-stabilized apartment, subject to applicable rules. A preferential rent is a lower rent the owner agrees to charge a tenant.
For many tenants who began paying preferential rent on or after June 14, 2019, New York State guidance says the preferential rent generally continues for the length of that tenancy. Permitted renewal increases are typically calculated from the preferential rent, not the higher legal rent. The owner may generally charge the legal rent after the tenant permanently moves out. Rules can vary in some affordable-housing programs, so check the details for your apartment.
Why a building’s tax benefit may matter
Some residential buildings receive tax benefits, including benefits associated with the 421-a program. In return, apartments may be subject to rent-stabilization requirements. A building’s tax status alone does not tell you exactly which rules apply to your apartment, though. Check your lease and the apartment’s rent-registration history.
The Gothamist report on the lawsuit describes a 20th-floor apartment advertised with a $3,990 legal rent and two months free, bringing the effective monthly price to $3,325. The complaint alleges that the renewal increase was then calculated from $3,990 rather than the lower preferential amount. The lawsuit says the Rent Guidelines Board had not approved an increase above 3.25% since 2021. For renewals beginning October 1, 2026 through September 30, 2027, the current guideline is 0% for one- and two-year leases.
Promotional discounts and preferential rent are not always interchangeable. Review the language in your own lease and any riders to understand how your rent is described.
How to check which rent you’re paying
Start with your current lease and renewal offer. Look for “preferential rent,” “legal regulated rent,” rent-stabilization riders, and any written terms explaining a discount or free-rent period. Compare the renewal calculation with the rent you have actually been paying.
You can also request your apartment’s rent history from New York State Homes and Community Renewal (HCR). Use the HCR tenant inquiry form and select “Apartment Rent History.” HCR says a response is generally mailed to the apartment address within about 20 business days. You can review HCR’s guidance on preferential rents as well.
Keep in mind that a rent history may show registered legal rents, which are not necessarily the amount you paid. Compare it with your leases, rent receipts, and renewal notices.
If a renewal increase doesn’t look right
- Ask the landlord or management company in writing how the new rent was calculated and which rent amount was used as the starting point. Keep a copy of your message and the response.
- Gather your records: leases, riders, renewal offers, rent history, receipts, and any listing or concession details from when you moved in.
- Get help reviewing the information. HCR provides tenant information and resources, and the Housing Rights Initiative offers information about tenant protections. You can also contact a tenant attorney or a local housing organization. NYC311’s rent-increase resource links to rent-regulation services.
The October 30 case does not determine what is owed by Two Trees or establish that every rent calculation in the building was wrong. It does highlight why renters should understand the difference between the rent they pay and a higher figure that may appear on a lease or registration record.
If you’re comparing apartments for rent in Queens or reviewing a lease elsewhere in the city, Armas Group NYC helps renters navigate NYC leases and the apartment search. Contact Armas Group NYC for local guidance.
Sources: Gothamist, October 30, 2026 · Bulwark NYC, October 30, 2026 · NYC311 rent increases