Undocumented Walls Discounted from IAI Rent Increase

The DHCR's Tenant Protection Unit (TPU) filed a rent overcharge complaint concerning tenants' apartment, based on its audit finding that landlord failed to justify the cost individual apartment improvements (IAIs) expended before tenants moved in. The DRA ruled for tenants and ordered landlord to refund $26,800, including triple damages.

Landlord appealed and lost. The DHCR noted that no inspection was needed to determine if a disputed item qualifies as an IAI. The question wasn't whether the work was done, but whether it was the type of work that constituted an improvement. The DRA discounted new Sheetrock walls, painting new walls, and new molding for new walls throughout the apartment. But the invoice from landlord's contractor made no reference to new walls. So these items were properly disqualified. As to triple damages, landlord showed nothing that supported a "good-faith belief" that the discounted items constituted improvements. It also didn't matter that tenants never previously disputed the work.

B. Clark Associates, Inc.: DHCR Adm. Rev. Docket No. GW210032RO (1/10/20) [3-pg. doc.]