Improvements Cost Reduced by Fire Insurance Proceeds

Tenants complained of a rent overcharge. Landlord claimed that it was entitled to collect a 1/40th rent hike for improvements made to repair fire damage. The DRA allowed a partial rent increase for the improvements, but reduced the total improvement cost by the amount of the fire insurance proceeds. Landlord appealed, arguing that the DRA wasn't authorized to apply the insurance proceeds against the cost of the improvements. The DHCR ruled for tenants. Long-standing DHCR policy allows an offset for fire insurance proceeds in calculating the 1/40th increase for improvements.

435 East 86th Street, Apt. 2H: DHCR Adm. Rev. Dckt. No. BG 410272-RO (9/30/94) [4-page document]