Landlord Proved IAIs Resulted in Apartment's Vacancy Deregulation

Tenant sued landlord and prior landlord, claiming rent overcharge and improper deregulation of a rent-stabilized apartment. The court ruled for tenant, finding that the cost of individual apartment improvements (IAIs) made to the apartment were insufficient to remove the unit from stabilization, and that landlords failed to rebut the presumption of willful rent overcharge. The court awarded tenant triple damages and attorneys' fees.

Landlords appealed and won. The appeals court found that landlords proved that IAIs cost enough to bring vacancy rent over the deregulation threshold, and there was no overcharge. Landlord and former landlord produced invoices from a general contractor, electrical contractor, and plumbing contractor for work performed in the apartment, along with cancelled checks corresponding to contractor invoices. The building manager also testified that he wouldn't have paid the invoices without inspecting the apartment to ensure that the work was complete. Tenant's photographs also showed that IAIs were performed. The trial court also improperly excluded invoices submitted by the plumbing contractor when tenant's attorney claimed he hadn't seen these invoices prior to trial. They were included in landlords' pre-trial motion for summary judgment. Landlords also weren't required to produce witnesses with personal knowledge that IAIs were actually performed in the apartment, in order to prove their defense, when they submitted documentary proof and supporting testimony.

DiLorenzo v. Windermere Owners LLC: Index No. 7930-7931 (110053/11), 2019 NY Slip Op 04779, 6/13/19; Friedman, JP, Kahn, Sweeny, Kapnick [dissenting], Singh [dissenting], JJJ