Landlord Proved Cost of Individual Apartment Improvements

Rent-stabilized tenant complained to the DHCR of rent overcharge in 2019. Tenant had moved into the unit in 2018 under a vacancy lease with a legal regulated rent of $2,059 and a preferential rent of $1,725. Among other things, tenant claimed that individual apartment improvement (IAI) increases were improper. The DRA ruled against tenant, finding that rent charged was legal.

Tenant appealed and lost. Landlord provided the cost of $14,000 paid for IAIs, which increased the apartment rent in 2015. Documentation included a contractor invoice and cancelled check payable to the contractor. An invoice documented the scope of the work, including full bathroom and kitchen renovations, and was marked "paid in full." The fact that the invoice was paid after the work was completed wasn't unusual and didn't invalidate the IAI rent increase. And, under rules in effect in 2015, landlords weren't required to use licensed contractors to complete IAI work. Although the invoice referred to a granite countertop, landlord explained that a formica countertop was installed and paid for and that the cost would have been higher if the countertop actually had been granite. Given the scope of the renovations, the DRA properly allowed all expenses associated with the work. 

Burnette: DHCR Adm. Rev. Docket No. LU210020RT (12/12/23)[4-pg. document]