Landlord Proved IAIs Costing $65K Resulted in Vacancy Deregulation

Tenant complained of improper deregulation of his apartment and rent overcharge. The DRA ruled against tenant, finding that the unit had been vacancy deregulated before tenant took occupancy in 2016.

Tenant appealed and lost. Since the complaint was filed, and decided, before HSTPA amended the Rent Stabilization Law effective June 14, 2019, pre-HSTPA rules applied. Landlord submitted sufficient proof that it spent $65,000 on individual apartment improvements (IAIs) after the last rent-stabilized tenant moved out in 2014. That tenant vacated after 30 years. So landlord was permitted to add a longevity increase of $225, a vacancy increase of 16.25 percent, and an IAI increase of $1,083. The resulting legal rent was $2,766.95, which was above the deregulation threshold in effect at that time. Landlord's proof of the IAIs conformed with Policy Statement 90-10, in effect at the time the work was done, stated that proof must include at least one of four enumerated forms of evidence. Landlord submitted cancelled checks contemporaneous with the completion of the work. While the checks didn't reference the apartment number, they were made out to landlord's contractor and were contemporaneous with landlord's worksheets detailing the actual work in the apartment, and landlord submitted a sworn statement from the building super who had personal knowledge of the work as it was being done. DOB records also showed that a permit was obtained to renovate the apartment, including minor partition and plumbing. DOB issued a Letter of Completion for this work. And although any failure to file an exit registration or other notices of deregulation didn't, by itself, operate to nullify an otherwise proper deregulation, landlord did in fact register the apartment as permanently exempt for high-rent vacancy in 2015.

Rodriguez: DHCR Adm. Rev. Docket No. IS410032RK (12/1/21)[6-pg. document]