Landlord Restored Fire-Damaged Apartment

Landlord asked the DRA to increase rent-controlled tenant's rent. Tenant had moved out of the apartment temporarily after a fire left it uninhabitable. Landlord paid $41,000 to renovate the apartment after the fire, and acknowledged that insurance covered $7,000 of the cost. Landlord claimed that it was entitled to a 1/40th rent increase, but tenant refused to pay. The DRA ruled against landlord because tenant hadn't signed any written consent to the rent increase. Landlord appealed and won in part. The DRA's order was incorrect. Under DHCR policy, tenant consent wasn't required for a 1/40th rent increase to a fire-damaged apartment. Under DHCR policy, Landlord was entitled to a rent increase equal to 1/40th of $34,545. But tenant's prior rent was $70 per month, and this would increase tenant's monthly rent to $934. Tenant had lived in the building for 35 years. In the interest of fairness, the DHCR ruled that tenant's rent could be increased only to $430.

Trinacria Realty, LLC: DHCR Adm. Rev. Dckt. No. TL220001RO (6/29/06) [6-pg. doc.)