DHCR Improperly Relied on Inspection Report

November 1, 2005

LVT Number: 18447

Tenant complained of a rent overcharge. Landlord claimed that it made individual apartment improvements before tenant moved in and so was entitled to a 1/40th rent increase. After an inspection, the DHCR rejected landlord's claim. The DHCR ruled for tenant and awarded triple damages. Landlord appealed. The appeals court ruled for landlord in part. The DHCR's reliance on the inspector's report was arbitrary and unreasonable because landlord had submitted sufficient documentary proof of the work done, and some of the improvements weren't readily visible.

Tenant complained of a rent overcharge. Landlord claimed that it made individual apartment improvements before tenant moved in and so was entitled to a 1/40th rent increase. After an inspection, the DHCR rejected landlord's claim. The DHCR ruled for tenant and awarded triple damages. Landlord appealed. The appeals court ruled for landlord in part. The DHCR's reliance on the inspector's report was arbitrary and unreasonable because landlord had submitted sufficient documentary proof of the work done, and some of the improvements weren't readily visible. But the DHCR properly disallowed any increase for the part of the work that was repair or maintenance. This included painting, installation of new Sheetrock, and changing outlet switches.

Ador Realty LLC v. DHCR: NYLJ, 10/12/05, p. 18, col. 1 (App. Div. 2 Dept.; Prudenti, PJ, Miller, Krausman, Spolzino, JJ)

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