Tenant Can't Challenge IAI Rent Hike Collected Before Four-Year Base Date

Tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $4,331. The DRA found that landlord didn’t properly preserve a higher legal regulated rent in all of tenant’s leases and reduced tenant’s rent to a rent that landlord claimed was preferential. Tenant appealed and lost. Tenant claimed that a rent increase based on individual apartment improvements (IAIs) collected before the base rent date wasn’t justified. But the DHCR applied the four-year rule to tenant’s case. While the DRA properly used the exception outlined in Rent Stabilization Code Section 2526.1(a)(2)(viii) to investigate the validity of the preferential rent claimed by landlord, tenant presented no proof of a fraudulent scheme to deregulate the apartment that would have warranted investigation of specific rental events prior to the four-year base date. The apartment’s rent increase from $526 to $1,690 in 2005, by itself, was insufficient to support a claim of fraud. And the original registrations were filed on time, the apartment was always registered as rent stabilized, and there was no proof that any rent amounts were altered. Landlord wasn’t required to submit proof concerning the IAIs because they occurred before the base date. Landlord’s filing of a Report of Vacancy Decontrol in 2005, while in error, also wasn’t part of a fraudulent scheme to deregulate the apartment. 

Eckhaus: DHCR Adm. Rev. Docket No. EP410061RT (10/12/16) [5-pg. doc.]