Apartment Was Improperly Deregulated But There Was No Overcharge

Tenant complained that landlord failed to renew her lease, along with improper apartment deregulation and rent overcharge. Landlord claimed that the unit had been vacancy deregulated.

The DRA ruled for tenant in part, finding that: (a) the renewal lease offered was improper; (b) the unit was rent stabilized; (c) landlord wasn't permitted to increase the rent by $850 per month for individual apartment improvements (IAIs) in 2005 because the claimed wood flooring wasn't installed, and because HPD and DOB violations were issued on claimed new items; and (d) the tenant's rent arrears of $35,500 exceeded the calculated overcharges of $151.53.

Tenant and landlord both appealed, and the DHCR denied both PARs. Both parties then filed Article 78 court appeals. The court sent the case back to the DHCR for further consideration.

The DHCR then denied tenant's PAR. Tenant's claim of fraud by landlord concerning IAIs was moot since the IAIs were disallowed, and the 2005 vacancy legal regulated rent only included a vacancy increase above the rent previously determined by the DHCR. The DHCR found no fraudulent scheme to deregulate the unit since landlord did produce some proof of work performed in 2005. And, although the landlord gave a market lease to the tenant, he charged less than the claimed legal rent of $2,371 and didn't increase the rent over several years, further suggesting that there was no "scheme" to illegally deregulate the apartment. There also was no proof that landlord attempted to file false rent registrations. 

The DHCR also denied the landlord's PAR. The DHCR had the authority to review the apartment's rent history beyond the four-year base date to determine whether it was rent stabilized. And despite any documentation landlord submitted showing it paid for new wood flooring, the DHCR's inspection showed this wasn't installed. Some other items were repair work, not IAIs. And others weren't sufficiently itemized. So IAI increases were properly denied. 

Hefti/93rd Building Corp.: DHCR Adm. Rev. Docket Nos. KM410013RP, KM410014RP (8/2/22)[7-pg. document]