On Friday, August 29, 2025, Law360 reported on a proposed class action filed in New York State Supreme Court that exposes a troubling pattern of alleged abuse by The Dermot Company LP and QSB Northern LLC—owners of a Long Island City residential building at 29-22 Northern Boulevard. The lawsuit, brought by tenants and supported by Housing Rights Initiative, alleges that the defendants unlawfully inflated rents while benefiting from the state’s 421-a tax exemption program.
The Allegations
Under 421-a, landlords receive generous tax breaks in exchange for complying with rent stabilization laws. That includes registering units with the Division of Housing and Community Renewal (DHCR) and adhering to rent guidelines. But according to the complaint, the defendants sidestepped these obligations by:
- Registering inflated “legal” rents with DHCR
- Offering short-term rent concessions (e.g., one month free) to mask the true rent
- Using these inflated figures to justify excessive renewal increases
This tactic—offering temporary discounts while locking in higher legal rents—violates the Housing Stability and Tenant Protection Act. That’s not just deceptive; it’s illegal.
Real-World Impact
The complaint outlines specific examples of tenant harm:
- Timothy Mui paid $3,832/month instead of the correct $3,649. His renewal jumped to $4,064—a 6% increase, more than double the legal cap.
- Hien T. Nguyen was promised six weeks of free rent and amenities like Wi-Fi, only to have them revoked at renewal—another violation of rent stabilization rules.
Seeking Justice
The proposed class includes all tenants who lived in the building from August 27, 2019, onward. The case, Timothy Mui et al. v. QSB Northern LLC et al., is pending in New York County Supreme Court (Index No. 161469/2025). Our firm, Newman Ferrara LLP, is proud to represent the plaintiffs in this action.
As our partner Lucas A. Ferrara put it:
“This isn’t a one-off mistake—it’s a business model. And it’s eroding the very foundation of housing affordability in New York.”
The Bigger Picture
This case is part of a broader investigation by Housing Rights Initiative, which has uncovered similar schemes across multiple properties. Their work highlights a troubling reality: enforcement by DHCR remains insufficient, leaving nonprofits and tenants to fill the gap.
We believe in accountability. We believe in the law. And we believe tenants deserve better.
A copy of the Law360 article can be found here: NY Tenant Claim Companies Hiked Rents & Abused Tax Exemption (subscription required).
A copy of the complaint can be found here: Timothy Mui et al. v. QSB Northern LLC et al