Proof of IAIs Supported Vacancy Deregulation in 2014

Tenant complained of rent overcharge and improper deregulation of his apartment. Tenant moved into the unit in August 2014 at an unregulated rent of $2,500 per month. The apartment had last been registered in 2012 as rent stabilized at $609 per month. Landlord claimed that it did a gut renovation of the vacant apartment in 2013 that cost $71,000. Landlord also claimed that when the next tenant moved into the unit in August 2013 at $2,500, the apartment was deregulated. The complaining tenant moved in a year later. The DRA ruled against tenant and found the apartment had been vacancy deregulated. The base rent date was November 2011, the base rent was $609, and, after adding an 18 percent vacancy increase, 12-year longevity allowance of 7.2 percent, and 1/40th IAI increase, the next legal rent was $2,536. So the apartment was properly deregulated. Landlord properly registered the unit as vacant in 2013 while the renovation work was being done, and registered the unit as permanently exempt in 2014. 

Tenant appealed and lost. He disputed landlord's IAI costs. But, under DHCR Policy Statement 90-10, in effect at the time the work was done, landlord submitted sufficient proof of IAIs in the form of cancelled contemporaneous checks, signed contract agreements, and invoices for the work. The contracts and invoices sufficiently described the work. And since the work done amounted to a complete gut renovation of the apartment, each specific installation need not have been separately itemized. DOB permits weren't required for completion of IAIs, and landlord wasn't limited to the lowest cost estimates for materials and labor. Licensed contractors weren't required.

Ellenbarger: DHCR Adm. Rev. Docket No. IS210088RK (4/28/21) [4-pg. doc.]