Proof of IAIs Insufficient to Deregulate Rent-Stabilized Apartment
LVT Number: #33680
A tenant complained of rent overcharge and improper apartment deregulation. The DHCR ruled for tenant and awarded triple damages for willful rent overcharge. Landlord filed an Article 78 court appeal, claiming that the DHCR's decision was arbitrary and unreasonable. The court ruled against landlord, which then filed a further appeal. The Appellate Division, Second Department also ruled against landlord. Landlord claimed that the apartment was deregulated when tenant moved in due to individual apartment improvements (IAIs) that increased the base rent. The appeals court disagreed, holding that the DHCR's determination that the landlord failed to establish its claimed IAIs with adequate documentation had a rational basis and wasn't arbitrary and capricious. Landlord also failed to show that the overcharge wasn't willful.
140-25 Ash Assoc. LLC v. DHCR: Index No. 719469/22, Case No. 2023-02738, 2025 NY Slip Op 01920 (App. Div. 2 Dept.; 4/2/25; Nelson, JP, Voutsinas, Landicino, McCormack, JJ)