Two Trees sued for alleged $10M rent fraud

Tenants accuse landlord of extortion

Jed Walentas and 125 Court Street
Jed Walentas and 125 Court Street

A new lawsuit accuses Two Trees Management of cheating stabilized tenants out of $10 million in rent at its Downtown Brooklyn property at 125 Court Street through “extortion” and “coercion.”

A group of tenants claims the developer, for years, sent stabilized tenants unjustified rent-due notices and forced them to vacate apartments so that it could jack up the rent. Attorney Matthew Berman filed the suit on behalf of the tenants.

The firm, led by father-and-son team David and Jed Walenta, also allegedly lied about the units’ market value so it could increase rents and issued false statements to the city to land $92 million in subsidies.

A Two Trees spokesperson dismissed the accusations. “This is a press release, not a legitimate legal complaint,” he told the New York Post. “The courts have repeatedly ruled in our favor on these frivolous complaints from market-rate tenants looking for any excuse not to pay their rent.”

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ProPublica first reported in December 2015 that Two Trees collected millions in affordable-housing tax breaks while skirting affordability requirements between 2005 and 2013.

In 2014, tenants asked the city to intervene and fix a mold problem at the Court Street building.

Two Trees is developing the Domino Sugar mixed-use development on Williamsburg’s waterfront. [NYP]Konrad Putzier