Landlord Proved Lawful IAIs Cost Almost $65,000

Rent-stabilized tenant complained to the DHCR of rent overcharge in 2018. The DRA ruled against tenant, finding that landlord had proved it spent $64,984 on individual apartment improvements (IAIs) before tenant moved into the unit, resulting in a lawful additional rent increase of $1,085 per month. The DRA found no overcharge.

Tenant appealed and lost. Tenant disputed landlord's IAI documentation. The DHCR noted that, at the time of the claimed overcharge, landlord was entitled to collect 1/60th of the cost of the IAIs as a rent increase. In accordance with DHCR Operational Bulletin 2016-1, landlord submitted sufficient proof of the IAIs. This included an itemized cost estimate from a contractor, copies of five cancelled checks, and an invoice for plumbing and kitchen items. The DHCR also found no merit in tenant's claim that there was an identity of interest between the building owner and the super or that landlord colluded to exaggerate the scope and cost of the IAIs. Landlord also properly included the cost of drywall and painting, given the scope of the apartment renovation project. 

Majsterek: DHCR Adm. Rev. Dckt. No. LO410006RT (6/29/23)[10-pg. document]