Keep Detailed Invoices of Individual Apartment Improvements

When you make improvements, such as installing a new refrigerator or replacing flooring, to your rent-regulated apartments, you’re allowed an “Individual Apartment Improvement Rent Increase.” This increase is in addition to vacancy increases allowed by law or the regular annual Rent Guidelines Board adjustments for rent-stabilized apartments, and biennial adjustments to Maximum Base Rents for rent-controlled apartments.

When you make improvements, such as installing a new refrigerator or replacing flooring, to your rent-regulated apartments, you’re allowed an “Individual Apartment Improvement Rent Increase.” This increase is in addition to vacancy increases allowed by law or the regular annual Rent Guidelines Board adjustments for rent-stabilized apartments, and biennial adjustments to Maximum Base Rents for rent-controlled apartments.

The amount of the rent hike is equal to 1/40th of the improvement’s cost if the improvements are done in apartments located in buildings containing 35 or fewer units. For buildings with more than 35 units, you may increase the legal regulated rent by 1/60th of the cost of the improvements. If the apartment is vacant, this rent increase is easy for owners to obtain. No consent is required from the Division of Housing and Community Renewal (DHCR) or from the incoming tenant to improve a vacant apartment. You may simply perform the work and raise the rent.

To obtain this permanent rent increase, be sure to keep detailed invoices of improvements made in case the tenant challenges the improvements. In one case, a rent-stabilized tenant complained of rent overcharge. The tenant claimed that the owner didn’t do any of the work claimed. The district rent administrator ruled for the owner initially, but the tenant appealed and won.

The documents the owner submitted to prove the improvements were completely inadequate. The owner submitted an invoice from a building employee marked “paid” for installing new floors and kitchen cabinets, along with a receipt for a refrigerator. But these records didn’t indicate which building or apartment the work was for, didn’t indicate if the appliance was new, and didn’t sufficiently break down the costs. The tenant also had claimed that the owner simply moved the refrigerator from her old apartment in the same building to the new apartment. The 1/40th costs were disallowed, and the DHCR ordered the owner to refund $8,000 in rent overcharges to the tenant [Forbes: DHCR Adm. Rev. Docket No. YK210005RK (1/17/13)].

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