Improvements Paid for with Insurance Proceeds

Tenant complained of a rent overcharge. Landlord claimed that tenant's apartment had been renovated at a cost of $25,000 and that it therefore could get a rent increase for individual apartment improvements. The DRA ruled against landlord because landlord had paid for the improvements with insurance proceeds received after the apartment was damaged in a fire. Landlord appealed and lost. An appeals court had previously ruled in another case that a landlord can't collect a 1/40th rent increase for improvements paid for out of insurance proceeds since landlord didn't lay out the money.

Melanie Enterprises: DHCR Adm. Rev. Dckt. No. GF710211RO (6/26/98) [4-page document]