Overcharge Resulted from Duplicative Rent Increases for IAIs

The DHCR's Tenant Protection Unit (TPU) referred a rent overcharge claim to the DRA, after making a finding of rent overcharge that the landlord rejected. The TPU found that individual apartment improvements (IAIs) done by landlord in 2014 and costing $74,025 duplicated IAI work done in 2011 and 2012 and therefore couldn't be accepted to increase the apartment rent because the individual improvements couldn't have exhausted their useful lives. So TPU found that a 2014 IAI rent increase of $1,851 was disallowed. The DRA also found some duplication in the IAIs and found a rent overcharge of $59,987, including triple damages.

Landlord appealed and lost. Landlord argued that DHCR Operational Bulletin 2016-1 was invalid and improperly promulgated or, even if properly promulgated, was improperly applied retroactively. But the DHCR had no authority to determine whether OB 2016-1 was properly promulgated. And, the useful life requirement that the DRA applied to this case pre-existed OB 2016-1 and was found under Rent Stabilization Code Section 2522.4(a)(11). It didn't matter that a useful life requirement wasn't spelled out in prior OB 90-10. 

373 South 4th Street, LLC: DHCR Adm. Rev. Docket No. IS210058RK (5/20/21) [4-pg. doc.]