DHCR Won't Consider IAI Documentation Submitted for the First Time with Landlord's PAR

The DHCR's Tenant Protection Unit (TPU) brought an audit proceeding for individual apartment improvements (IAIs) made to an apartment in landlord's building based on review of rent registrations for the unit. TPU demanded that landlord submit proof justifying the cost of the IAIs that resulted in a rent increase in 2015-2016. Landlord didn't respond, and the TPU issued a letter directing landlord to reduce the apartment's legal rent from $1,560 to $1,020 per month within 30 days, file amended registrations, refund any overcharge to tenant, and send tenant an amended lease reflecting the new legal rent. TPU also warned landlord that if it took no action within 30 days, TPU would transfer the investigation to the DRA for the processing of a rent overcharge complaint.

When landlord again failed to respond, the TPU referred the matter to the DRA, which opened a rent overcharge proceeding in February 2023. The DRA set the base rent date as July 26, 2014, which was four years before the TPU referral, and asked landlord to produce proof of any IAIs. In response, landlord claimed that it hadn't received the 2018 correspondence from TPU. It had received TPU's decision and improperly concluded that no action was needed. Landlord submitted rent history records to the DRA. But the DRA then sent landlord two separate Treble Damages Notices before ruling that there was a $10,500 overcharge including triple damages, between July 1, 2017,  and July 2023.

Landlord appealed and lost, claiming that the DRA failed to consider IAIs performed in the apartment before July 1, 2017. But the DHCR refused to consider new evidence of IAIs submitted for the first time with landlord's PAR. Landlord presented no reasonable excuse for failing to submit IAI documentation to the DRA or to TPU. 

1196 Eastern Holding LLC: DHCR Adm. Rev. Docket No. LT210018RO (11/27/23)[5-pg. document]