Painting and Sheetrock Excluded from Approved IAI Costs

The DHCR's Tenant Protection Unit (TPU) commenced an individual apartment improvement (IAI) audit for tenant's apartment. Landlord submitted proof in support of IAIs performed in 2013 before a vacancy rent increase was collected. Landlord claimed that it spent $40,710 on IAIs, but the TPU disallowed $4,450 for painting, additional work, and skim coating where new Sheetrock was installed. When landlord didn't agree with the TPU's recommended rent cut, the TPU sent the case to the DRA as an overcharge complaint. In November 2015, the DRA sent landlord a final notice concerning the discounted IAIs and gave landlord another change to submit proof. Landlord didn't submit the requested documentation, and the DRA ordered an overcharge refund of $8,900, including triple damages. Landlord appealed and lost. In order for painting and Sheetrock to qualify as IAIs they must have been installed throughout the apartment. Here, no new walls were installed. Landlord also had sufficient notice of the DHCR's position and didn't reduce the rent. So triple damages were proper.

Rego Park Ventures LLC: DHCR Adm. Rev. Docket No. EV110050RO (4/6/17) [6-page doc.]