Landlord Submitted No Proof of Claimed IAIs

Tenant sued landlord in 2011, claiming fraudulent improper deregulation of her apartment and rent overcharge. Landlord claimed that the unit had been properly vacancy deregulated. The trial court ruled for tenant, finding that landlord failed to show that individual apartment improvement (IAI) work done in 2009 wasn't duplicative of work done in 1995 and 1998, or that earlier work had outlasted its useful life. The court found that the legal rent was well below the $2,000 deregulation threshold, and awarded triple damages for willful overcharge.

Landlord appealed and won. The appeals court found that tenant had waived a useful life claim because she failed to plead that in her court complaint. In a split decision, the appeals court also found that useful life didn't apply to the IAIs relevant to the case.

Tenant then appealed to New York's highest court, which ruled for tenant and found that she didn't waive her useful life claim because she raised the issue in a pretrial memorandum. The Court of Appeals sent the case back to the appeals court to determine the remaining question of whether there was a willful overcharge.

The appeals court ruled for tenant. Landlord's claimed IAIs were unsubstantiated since they offered no proof that claimed improvements were allowable. Tenant also was entitled to attorney's fees.

DiLorenzo v. Windermere Owners LLC: App. No. 7930-7931, Case No. 2018-1064(2), 2020 NY Slip Op 07997 (App. Div. 1 Dept.; 12/29/20; Friedman, JP, Kapnick, Singh, Scarpulla, JJ)