Tenant Can't Challenge Cost of Pre-Base Date IAIs

Rent-stabilized tenant complained of rent overcharge. The DRA ruled against tenant, finding no overcharge since the July 17, 2010, base rent date four years prior to the filing of the complaint.  Tenant appealed and lost. Tenant claimed that the DRA incorrectly determined that the 2008 rent increase in monthly rent from $354 to $1,500 wasn’t subject to challenge because such unwarranted rent increase constituted fraudulent conduct that permitted the DHCR to examine that rent increase.  But an expert opinion submitted by tenant didn’t show that the 2008 rent increase was the result of a fraudulent scheme to deregulate the apartment. Instead, it showed that substantial work was done to the apartment before the base date, which would support some level of rent increase. While tenant claimed that the 2008 IAI rent increase was excessive, a pre-base date rent overcharge by itself doesn’t render the base date rent unreliable. Also, rent registrations matched the leases for the apartment, and tenant was given a rent-stabilized lease and rider when she moved in. And, since the contested IAIs were done in 2008, under the four-year rule, landlord didn’t have a duty to retain records concerning that IAI after 2012 where no overcharge complaint had been filed by the end of 2012. Therefore, landlord had no current duty to contest the cost estimates contained in tenant’s apartment inspection report by supplying proof of the actual costs of improvements.

Brauer: DHCR Adm. Rev. Docket No. DV410043RT (8/25/16) [5-pg. doc.]