Itemization of Apartment Improvements Not Required

Landlord sued to evict tenant for nonpayment of rent. Tenant claimed a rent overcharge. He said that landlord illegally increased tenant's rent to $3,600 per month from prior tenant's rent of $920. Landlord claimed that it renovated the apartment after prior tenant moved out, at a cost of $50,000.
The trial court ruled for tenant, finding that landlord failed to break down the cost of improvements and repairs done to the apartment when setting tenant's rent. The court ruled that landlord's action wasn't willful but found there was a $38,000 overcharge. Landlord appealed, arguing that the DHCR didn't require itemization of improvement costs when an apartment was fully renovated. The appeals court ruled for landlord and found there was no overcharge.
Tenant then appealed and lost. When extensive work is done in an apartment, the DHCR doesn't require landlord to break down the costs between improvements and repairs. The courts should follow the DHCR's procedure. Landlord presented adequate proof that extensive renovation work was done, and legally increased the rent by 1/40th of its documented costs for apartment renovation.

Jemrock Realty Co. LLC v. Krugman: NYLJ, 5/20/09, p. 30, col. 1 (App. Div. 1 Dept.; McGuire, PJ, Sweeny, Saxe, Renwick--dissenting, Freedman--dissenting, JJ)