The Real Deal New York

Two Trees flouted rent regulations at DoBro building: report

City regulators ignored illegal rent hikes for years

December 04, 2015 03:20PM

Jed Walentas 125 Court Square

From left: Two Trees’ Jed Walentas and 125 Court Square in Downtown Brooklyn

Updated: 4:30 p.m., Dec. 4: Two Trees Management spent years skirting rent regulation requirements at its luxury rental building at 125 Court Street in Downtown Brooklyn, collecting millions in tax breaks without drawing significant scrutiny from the city until long after the fact, a new report confirms.

For eight years beginning in 2005, the developer frequently increased rent beyond the limits imposed by the city’s rent stabilization rules, which apply to all properties receiving benefits under the 421a tax abatement program. 

In 2011, regulators finally cited Two Trees for breaking the rules, but took no action to revoke or claw back the company’s property tax benefits. In fact the building never officially qualified for the 421a program. In all, the company overcharged residents to the tune of $368,000, though it later repaid them nearly $300,000 plus interest, ProPublica reported.

Two Trees completed the 321-unit, 490,000-square-foot building in 2005.

In 2014, residents at the building organized a rent strike to protest alleged water leaks at the building that they claimed were causing damage to their apartments.

“Two Trees has proudly participated in the 421-a program, meeting our commitments to deliver integrated affordable housing in some of the city’s finest luxury rental buildings – including 64 affordable units at 125 Court Street that would otherwise not exist,” a spokesperson wrote in a statement. “When Two Trees discovered accidental overcharges – averaging about 4% and affecting less than a quarter of tenants – we moved to address them, providing full refunds with interest to all affected tenants for every overcharge.” [ProPublica]Ariel Stulberg

A statement from Two Trees Management was appended to this story.