Landlord Proved Costs for Rent Increase Based on IAIs

Rent-stabilized tenant complained of rent overcharge in February 2019. The DRA ruled for tenant and found a total overcharge of $1,864. Tenant appealed and lost. Tenant questioned landlord's claim that it spent $27,675 on individual apartment improvements (IAIs) before tenant moved into the apartment. At the time tenant's complaint was filed, former RSC Section 2522.4(a)(1) permitted an IAI rent increase equal to 1/40th of the cost of proven improvements. Landlord proved the claimed IAIs by providing a contractor's affidavit, invoices for kitchen cabinets and appliances, photographs, and proof of payment totaling $27,675. The DHCR rejected tenant's claim that landlord's costs for Sheetrock and electrical wiring were inflated. Landlords weren't limited to using the lowest cost estimates for contractors or vendors when performing IAIs. 

Musial: DHCR Adm. Rev. Docket No. KV210014RT (1/23/23)[2-pg. document]