DHCR Considers Additional Proof of IAIs Submitted with Landlord’s PAR

The DHCR’s Tenant Protection Unit (TPU) referred a rent overcharge claim to the DRA after conducting an audit concerning individual apartment improvements (IAIs) made to tenant’s apartment. The DRA determined that the base date rent was $722.70 and that landlord was thereafter entitled to a vacancy increase for new tenant. But the DRA disallowed an IAI rent increase based on work costing $94,500, and found an overcharge. The DRA found that the construction contract was unacceptable because it wasn’t signed by both landlord and the contractor, didn’t contain a payment schedule, and was “not consistent.” The DRA also found that checks payable to the contractor for the IAIs had “Apartment C1” written on them instead of “C9,” the subject apartment.

Landlord appealed and won in part. Landlord argued that TPU lacked authority to audit the apartment and refer the matter to the DRA, and that the apartment had previously been deregulated. With its PAR landlord submitted enlarged copies of the checks showing that they applied to Apartment C9, a copy of the contract with a payment schedule marked “paid in full,” a letter from the contractor itemizing the work to be performed, and an affirmation from the contractor stating the cost and that it had been paid. The DHCR ignored landlord’s claims about the TPU but accepted landlord’s additional proof of the IAIs since it enhanced and/or clarified previously submitted documents. The DRA also had accepted similar proof in other cases concerning the building, and the DHCR should therefore be consistent. The DHCR sent the case back to the DRA to reconsider whether landlord submitted sufficient proof of the IAIs.

Sherman Nagle Realty Corp.: DHCR Adm. Rev. Docket No. EN410024RO (2/14/17) [3-pg. doc.]