Proved Costs for IAIs Insufficient to Result in Deregulation

Tenant complained of rent overcharge. The DRA ruled for tenant, finding that the apartment was rent stabilized. Landlord appealed and lost. Landlord argued that, following a 2009 vacancy, it made individual apartment improvements (IAIs) before tenant moved in. This brought the legal rent over the $2,000 deregulation threshold. But the DHCR found that the DRA had correctly disallowed $5,000 of landlord’s claimed IAI costs because the invoice for that work didn’t identify the apartment it was done in. So, the legal vacancy increase, including 1/40th of the total IAI cost, didn’t bring tenant’s rent over $2,000. The DHCR noted that, since the DRA properly found that prior tenant’s rent hadn’t been increased to at least $2,000 when tenant moved in, it wasn’t required to consider the impact of the appeals court’s 2015 decision in Altman v. 285 W. Fourth LLC.

Diehl & Diehl Corp.: DHCR Adm. Rev. Docket No. EP410015RO (2/23/17) [4-pg. doc.]