No 1/40th Increase for Lead Barrier Paint

Rent-stabilized tenant complained of a rent overcharge. The DHCR found a willful overcharge and ordered landlord to refund $23,000, including triple damages. Landlord filed an Article 78 court appeal, claiming that the DHCR’s decision was arbitrary and unreasonable. The court sent the case back to the DHCR for reconsideration. Landlord argued that the DRA miscalculated the cost of individual apartment improvements and improperly disallowed some costs. Landlord had claimed that it cost $33,478 after a 25 percent contractor discount to renovate the apartment. Of this amount, $6,000 was for lead paint encapsulation. Tenant pointed out that lead barrier paint cost only $33-$50 per gallon. The DRA ruled for landlord in part, allowing a 1/40^th increase for improvements costing $22,150 minus the 25 percent discount. The DRA disallowed any increase for plastering and painting since that was maintenance and for the wood subfloor and ceramic tiles because they weren’t installed.

311 Roslyn Court: DHCR Adm. Rev. Docket No. XK210004RP (3/18/10) [3-pg. doc.]