Fire Damage Repair Costs Don't Qualify as IAIs

Tenant complained in 2018 of rent overcharge and improper apartment deregulation. The DRA ruled against tenant, finding that landlord properly added a rent increase for individual apartment improvements (IAIs) to the vacancy rent of a prior tenant. This resulted in vacancy deregulation of the unit.

Tenant appealed and won. No one disputed that the contested work had been done. But tenant pointed out that the IAI work was done in the middle of a lease term, in response to a fire in the apartment. Both the sheet-metal/Sheetrock and subflooring and floor were installed to repair those areas rather than improve them. Other work, including debris removal, new floor joists, replacement of floors in the kitchen, dining room, and bathroom, as well as fixture replacement, did qualify as IAIs. But this work, framed by the DRA as $21,600 spent on a gut renovation, resulted from fire damage, and can't form the basis of an IAI rent increase. The apartment remained rent stabilized and the total overcharge was $2,030, including interest. The overcharge in this case wasn't willful, so no triple damages applied.

Rucci: DHCR Adm. Rev. Docket No. JT410023RT (3/18/22)[4-pg. document]