Court Denies Rent Hike for Apartment Renovations

Landlord sued to evict rent-stabilized tenant for nonpayment of rent. In 2004, a fire broke out in tenant's apartment. Tenant had to move out for almost a year. She moved back in after landlord completed renovations. Landlord then increased tenant's rent from $543 to $1,315 by adding 1/40th of the renovation cost not covered by insurance. Tenant claimed that the rent increase was unlawful. Landlord argued that tenant had started the fire. And in at least one prior case, the DHCR allowed another landlord to charge a 1/40th increase for apartment improvements after a fire.
The court ruled against landlord. Rent Stabilization Code Section 2522.4(a)(1) allows landlords to collect 1/40th of the cost of improvements only if tenant agrees in writing to the rent increase. There was no agreement here. No agreement is needed if the improvements are made while an apartment is vacant. But tenant's temporary absence from the apartment after the fire wasn't a vacancy. The court also found that it wasn't bound by the DHCR's prior decision. The DHCR's decision wasn't based on any provision of the Rent Stabilization Code or any other court decision. It also didn't matter who started the fire. Landlord could sue tenant for damages if she was responsible. Or landlord could sue to evict tenant for endangering other tenants.

R.D.S.O. Associates v. Moore: NYLJ, 7/15/08, p. 28, col. 1 (Civ. Ct. Kings; Finkelstein, J)