Tenants at Alta LIC Sue Over Alleged Rent Overcharge Scheme

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A flashy Long Island City rental tower is at the center of a legal fight that could cost its owners millions.

Tenants at the 44-story Alta LIC say the building’s landlord — an ownership group linked to Baron Property Group, Simon Baron Development and Affinius Capital, along with property manager Dermot Company — illegally inflated rents on hundreds of stabilized units.

A lawsuit filed this week in Manhattan Supreme Court accuses the team of luring tenants during the pandemic with discounted “move-in” rents, then yanking the concessions at renewal and resetting rents at higher levels, in violation of state law, Crain’s reported.

The 467-unit property opened in 2019 under the now-expired 421a tax abatement program, which has saved its owners an estimated $40 million to $50 million annually in property taxes, according to a Crain’s analysis. In return, about 120 apartments were set aside as affordable,

while the rest — roughly 350 units — were supposed to remain rent-stabilized for decades.

Under New York’s 2019 Housing Stability and Tenant Protection Act, preferential rent discounts must become the legal base rent, protecting tenants from sharp increases. The suit claims Alta’s owners ignored those rules.

Housing Rights Initiative, the watchdog group that investigated the case, claims overcharges at Alta could run into the millions. One tenant alleged his two-bedroom rent was set at $1,706 in 2020 but jumped 14 percent a year later when management declared his concession expired.”

Others say building agents applied Rent Guidelines Board increases to inflated figures rather than the stabilized baseline. Tenants also claim promised perks such as Wi-Fi and housekeeping were stripped at renewal.

Developers deny wrongdoing but have not yet responded formally in court. Dermot, which manages the building, said nothing publicly; Baron Property Group and its founder, Matthew Baron, did not return the outlet’s request for comment.

Built on a $53 million assemblage and refinanced with a $217 million mortgage last year, Alta has been a marquee Queens rental project with a pool, gym and spa amenities.

— Holden Walter-Warner