Renovations Warrant Higher Rent, Court Says

     (CN) – A New York City landlord is entitled to raise the rent on his formerly rent-controlled apartment because he put $50,000 into renovations, a New York appellate division ruled.

     After a long-standing tenant moved out of one of its apartments, Jemrock Realty LLC hired a contractor to remodel the apartment. The work included repainting, rewiring, replumbing, refinishing the floors, and new sinks and toilets in the bathrooms.
     Jay Krugman rented the apartment. The rent had increased from $920 to $3,600. Because the amount exceeded $2,000, the apartment was no longer subject to regulation under the Rent Stabilization Act.
     After 18 months, Jemrock sued Krugman for failure to pay his rent. Krugman challenged the lawsuit, alleging that Jemrock had overcharged him and that the renovations did not count as “improvements” that would support a rent increase.
     The trial court ruled that Jemrock’s work qualified as repairs, rather than improvements, and awarded Krugman $37,847 in overcharged rent.
     The New York City appellate judges reversed the decision.
     “Because landlord was not obligated to itemize the costs,” the judges wrote, “landlord is entitled to a rent increased based on the renovations.”

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