Tenant Claims Managing Agent and Contractor Shared Identity of Interest

Tenant complained to the DHCR on June 20, 2019, of rent overcharge and improper apartment deregulation. He claimed that the last prior monthly rent was $1,023, and that landlord charged him $3,500. He also claimed that landlord's managing agent and its contractor, who performed individual apartment improvements (IAIS) before tenant moved in, shared an identity of interest.

The DRA ruled against tenant, finding no overcharge. Looking back six years, the DRA added to the $1,023 base rent an 18 percent vacancy increase, a 19.2 percent longevity increase, and an increase of $1,932.52 based on 1/60th of the proven $115,931 cost of the IAIs.

Tenant appealed. The DHCR asked landlord for additional information concerning the relationship between the managing agent and the contractor. Landlord claimed that there was no equity interest and/or identity of interest between these entities.

The DHCR ruled for tenant in part and sent the case back to the DRA for further fact-finding. New York's Dept. of State website displayed the management company as the recipient of service of process for the individual contractor. This warranted further investigation as to an identity of interest between the two entities. Also, the cancelled checks produced by the management company for the IAI work didn't contain any signee information and didn't show that the IAI checks were deposit into the contractor's bank account. Investigation also was needed into the two companies' financial records, including which bank account the IAI payments were deposited into. The DHCR also wanted to know whether the companies shared any common officers or principals. 

Levers: DHCR Adm. Rev. Docket No. JS410006RT (12/15/21)[4-pg. document]