No Overcharge Resulted from Minor IAI Error

Rent-stabilized tenant complained to the DHCR of rent overcharge in 2020. He moved into the unit in February 2019 under a lease listing the legal regulated rent as $1,838 and a preferential rent of $1,650. Tenant claimed that landlord charged a rent increase of $291 for individual apartment improvements (IAIs) that tenant claimed were unsubstantiated. The DRA ruled against tenant, finding no overcharge based on IAI records submitted by landlord.

Tenant appealed and won, in part. Landlord's proof of IAI costs was sufficient under pre-HSTPA Rent Stabilization Code requirements and included a contractor's affirmation, an invoice, and an itemized bill detailing the scope of the work done. The contractor documents, rather than tenant's lease rider, were properly relied on by the DRA concerning the costs claimed. However, the DRA incorrectly allowed an IAI rent increase for "sanding and polishing existing wood floor" in the amount of $750. This was a repair/maintenance cost and not an IAI. Therefore, the legal regulated rent was adjusted from $1,838 to $1,825. Since tenant paid a preferential rent that was less than this amount, there still was no overcharge. 

Feeney: DHCR Adm. Rev. Docket No. MW110010RT (3/31/25)[5-pg. document]