Painting and Plastering Costs Disallowed as IAIs

The DHCR’s Tenant Protection Unit (TPU) conducted an Individual Apartment Improvement (IAI) audit for tenant’s apartment based on review of annual rent registrations, and asked landlord to submit proof justifying the cost of IAIs made to the apartment in 2012 before tenant moved in. Landlord submitted proof, but TPU notified landlord that it was disallowing the cost of paint removal on metal frames, skim coat walls and ceilings, and apartment-wide painting since the walls weren’t replaced. TPU reduced tenant’s initial rent by $71 and later transferred the case to the DRA when landlord didn’t refund any overcharge. The DRA ruled for tenant and found a total overcharge of $2,500, including triple damages.

Landlord appealed and claimed that the total $39,645 spent on IAIs should be allowed. Landlord claimed that the apartment was substantially rehabilitated and that therefore painting and other disallowed costs should have been included in approved IAIs. But proof submitted by landlord failed to show that all equipment in the kitchen and bathroom was replaced so as to necessitate painting and plastering. 

PIK Record Co.: DHCR Adm. Rev. Docket No. DX410017RO (4/20/16) [5-pg. doc.]