Tenants of three Long Island City apartment buildings are alleging that the developer that owns their sites had overcharged rent by more than $50 million in a new lawsuit filed Tuesday against the landlord.

An investigation by watchdog organization Housing Rights Initiative (HRI) , in partnership with State Sen. Kristen Gonzalez’s office, claimed Rockrose Development Corporation had engaged in the overcharges while simultaneously claiming 421-a tax program benefits that exempted the company from paying nearly $200 million in taxes.

The buildings involved are Eagle Lofts, the Linc and Hayden LIC in Long Island City. The tenants, who are represented by Newman Ferrara LLP, are now demanding the landlord refund their overcharged rents while also lowering their rates to the net effective base rate initially promised and advertised.

Representatives of Rockrose did not directly respond to QNS' request for comment about the Oct. 20 filing, noting they had "yet to be served with the complaint." One spokesperson from their team, however, said they are still awaiting the court’s final determination in two similar filings — Choi v Linc LIC L.L.C. and Grey v LIC Development Owner, L.P. — before they take action.

“In each [case], there has yet to be a determination how the rents are to be calculated,” the representative wrote to QNS. “Neither action is a final determination. Only after the determination of how the rents are calculated will there be a final determination and the landlords in those cases can and will seek leave at the Court of Appeals. Either the Court of Appeals accepts the appeal and will render a decision to affirm or reverse the decisions of the Appellate Division, or the Court of Appeals will not accept the appeal. At that time, there will be a final determination on this legal issue which the landlord will abide by.”

The 421-a tax program — which expired in 2022 but continues to honor existing terms and extensions — provides tax exemptions for developers that construct new, market-rate, multi-family housing.

The lawsuit notes that building owners are only eligible if they “provide its tenants with the protections of the rent stabilization laws , even if those apartments would otherwise be exempt.”

Landlords of eligible properties are required to submit an application for the tax exemption, and any subsequent extensions, through the NYC Department of Housing Preservation and Development (HPD). The NYC Department of Finance (DOF) is in charge of implementing and applying the tax exemption.

Building owners must file all documents related to the tax program each year with HPD to determine ongoing eligibility, although the New York State Homes and Community Renewal (HCR) is tasked with enforcement.

The lawsuit states that Rockrose offered rent concessions to tenants, providing up to a few months in the building rent-free before the preferential rate listed on the lease officially kicked in. This resulted in lower net effective base rents for the units, which HRI said the landlord advertised to attract more tenants.

Upon tenants’ lease renewals, however, the suit charges that the landlord allegedly revoked the rent concessions while still claiming rent increases approved by the Rent Guidelines Board (RGB) on the preferential rate that appeared on the leases, rather than the lower net effective rate.

As a result, HRI claimed the landlord’s rent increases were well above what was permitted by the RGB. For example, the lawsuit cites a listing for a unit at a Rockrose building for $4,987, but the net effective base rent is listed as $4,796. The lawsuit states that based on the rent concession’s structure, the landlord claims the right at renewal to take the RGB’s permitted rent increase off of the $4,987 figure, not $4,796.

Aaron Carr, founder and executive director of HRI, said the team reviewed dozens of Rockrose tenant leases, which he said revealed similar findings. He claimed that the landlord has illegally claimed 421-a tax exemptions amounting to $194,273,281.13.

“This is one of the most willful players we’ve ever investigated on the issue in the history of the organization,” Carr said. “They’re not just cheating rent-stabilized tenants — they’re cheating the taxpayers of New York.”

On July 30, tenants were sent mailers from Gonzalez’s office with HRI’s findings and informed them they were being charged illegal rent hikes. Gonzalez said she became aware of concession schemes while working with housing advocates and residents in the district. She said rent concessions became popular during the pandemic, especially in buildings around LIC, northern Brooklyn and areas of Manhattan.