Landlord Not Required to Maintain IAI Records for More Than Four Years for 2017 Overcharge Claim

Tenant complained to the DHCR in 2017 of improper apartment deregulation and rent overcharge. The DRA ruled for tenant and directed landlord to refund $19,800, including triple damages.

Landlord appealed and won. Landlord argued that the DRA improperly disregarded proof of individual apartment improvements (IAIs) performed in 2008-2009 that led to vacancy deregulation of the apartment. The DHCR pointed out that landlord had sufficiently proved the $35,000 cost of IAIs in 2009. The resulting rent increase brought the apartment's legal rent over the then deregulation threshold of $2,000 per month. So the unit was deregulated prior to the inception of the 2009 tenancy.

Landlord had submitted a proposal signed by the prior landlord and photographs to support the 2008 IAIs. While such proof might not be strictly sufficient under DHCR Policy Statement 90-10 to prove that IAIs were done, the IAIs had been performed four or more years prior to the 2013 base rent date for the tenant's complaint. RSC Section 2526.1 as it applied to this case provides that rental events prior to the base date may not be examined except to investigate the issue of jurisdiction. And while jurisdiction is at issue in this case, landlord wasn't required under RSC Section 2526.1 to maintain rent records for more than four years. Since the IAIs here were done more than eight years before tenant filed his complaint, landlord wouldn't be held to the strict standards of PS 90-10. The legal rent for the apartment following the IAIs was $2,530.33, which exceeded the 2009 deregulation threshold.

940 Columbus LLC: DHCR Adm. Rev. Docket No. LU410001RO (7/11/24)[5-pg. document]