Some IAI Costs Disallowed Based on Insufficient Proof

The DHCR's Tenant Protection Unit (TPU) conducted an audit of individual apartment improvements (IAIs) claimed by landlord for tenant's apartment. The TPU disallowed all the IAIs based on records submitted by landlord and its own apartment inspection. Landlord disputed TPU's findings and didn't comply with its instructions to refund an overcharge and amend leases and rent registrations. TPU then referred a rent overcharge complaint to the DHCR's Rent Administrator (DRA). Landlord again responded and submitted various documents. The DRA ruled for tenant and disallowed IAIs based on its own apartment inspection. The DRA ordered landlord to refund $40,232, including triple damages.

Landlord appealed and won, in part. The DRA correctly disallowed all claimed IAIs regarding bathroom renovations, as well as some other items, that the DHCR's inspector found weren't performed. The DRA also correctly disallowed all costs associated with demolition since the apartment wasn't completely gut-renovated and the demolition costs weren't broken down per room. The DRA also correctly disallowed costs associated with painting as new walls weren't erected and painting is otherwise considered normal maintenance and repairs. However, the DRA should have permitted certain IAIs costing $13,790 that the DHCR's inspector found were completed. The DHCR ruled that the total rent overcharge was $7,646 with interest. Triple damages weren't warranted because the apartment had some verified improvements and landlord submitted documentation, including payment documentation.

Skyview Towers Holding, LLC: DHCR Adm. Rev. Docket No. GP110035RO (1/14/19) [4-pg. doc.]