Allowing Full IAI Costs Resulted in Vacancy Deregulated Apartment

LVT Number: 27691

Tenant complained of rent overcharge. Landlord claimed that the apartment had been deregulated. The DHCR ruled for tenant and found that the apartment wasn't eligible for deregulation. Landlord filed an Article 78 court appeal. The court ruled against landlord, who appealed and won. The DHCR's decision, which set tenant's initial rent allowing individual apartment improvement (IAI) costs for new drywall and flooring, but disallowed expenses related to finishing the new surfaces, was irrational.

Tenant complained of rent overcharge. Landlord claimed that the apartment had been deregulated. The DHCR ruled for tenant and found that the apartment wasn't eligible for deregulation. Landlord filed an Article 78 court appeal. The court ruled against landlord, who appealed and won. The DHCR's decision, which set tenant's initial rent allowing individual apartment improvement (IAI) costs for new drywall and flooring, but disallowed expenses related to finishing the new surfaces, was irrational. All of these IAI costs were permissible and, when added to the prior tenant's $1,264 rent along with a vacancy increase, put tenant's initial rent above the $2,000 deregulation threshold. 

 

 

18 St. Marks Place Trident LLC v. DHCR: Index No. 153137/16, 2017 N.Y. Slip Op. 03042 (App. Div. 1 Dept.; 4/20/17; Acosta, JP, Renwick, Manzanet-Daniels, Webber, Gesmer, JJ)