Philadelphia Skyline

Itkowitz PLLC Gets “Free Market Apartment” Back In To Rent Stabilization!

April 17, 2017

I represented a residential tenant in what he thought was a free market apartment.(1) I was hired to investigate whether it was actually subject to Rent Stabilization.

It was! 

My client was the first deregulated tenant. The Individual Apartment Improvements (IAI's) that the landlord claimed got the apartment over the Deregulation Threshold, however, seemed suspect. If you want to know more about this topic, in general, read my article on illegally deregulated apartments

In any event, we asked landlord for the IAI backup. It didn't add up. Landlord was attributing the full amount for invoices for work covering the restoration of several kitchens within the building to just my client’s apartment. In some cases, the dates of the invoices and the dates of the work claimed therein also didn't support landlord's claim. The whole thing was confusing. Finally, some of the work claimed was done after my client moved in, which would mean that it does not qualify for getting the rent to the Deregulation Threshold.

It is rare that a landlord actually has their act together to the extent I would like to see it with respect to IAI’s. Here are some examples of what I see frequently:

The cancelled checks do not indicate what invoices were being paid.  
There are no invoices marked “paid”.
The amounts of certain expenditures do not match up with the invoices.  
The invoices are chronologically discordant with the alleged work.  
Landlord does not provide signed contracts; they have paper, but not contracts.  
Landlord does not provide contractors’ affidavits.  
Landlord does not provide before and after pictures of the apartment.  

So I asked landlord for a Rent Stabilized lease and a refund on the overcharge, which was small. Landlord gave it to us without the need for any DHCR Proceeding or court case. My client got his Rent Stabilized apartment!

What's the lesson? The lesson for landlords is to get your IAI back up in order. The lesson for tenants is that you should check with someone like me about whether your free market apartment is really Rent Stabilized!

Respectfully submitted,

Michelle Maratto Itkowitz

(1) Some details changed to protect the innocent.

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