IN RE: Scott FILIPSKI (2026)

Order and Judgment (one paper), Supreme Court, New York County (David B. Cohen, J.), entered on or about March 13, 2026, which denied the petition to annul the determination of respondent agency New York State Division of Housing and Community Renewal (DHCR), dated October 28, 2024, denying the petition for administrative review and affirming an order of the Rent Administrator, dated April 26, 2024, denying petitioner's rent overcharge complaint, and dismissed the proceeding brought pursuant to CPLR article 78, unanimously affirmed, without costs.  Order, same court and justice, entered on March 13, 2026, which denied as academic petitioner's application for a preliminary injunction prohibiting respondent landlord The Fortuna CRX, Inc. from taking steps to terminate petitioner's tenancy pending resolution of this proceeding, unanimously affirmed, without costs.

Review of an apartment's rental history before the base date is permitted only where the tenant produces evidence of a fraudulent scheme to deregulate an apartment (see 435 Cent. Park W. Tenant Assn. v Park Front Apts., LLC, 183 AD3d 509, 510 [1st Dept 2020] ).  Assuming, arguendo, that petitioner has a colorable claim of such a scheme based on landlord's purported individual apartment improvement (IAI) rent increase, landlord had the burden of justifying the rent increase based on the claimed IAIs (see Matter of 985 Fifth Ave. v State Div. of Hous. & Community Renewal, 171 AD2d 572, 574–75 [1st Dept 1991], lv denied 78 NY2d 861 [1991] ).

We find that landlord satisfied its burden and that DHCR accordingly had a rational basis for denying the rent overcharge complaint.  Landlord provided several documents to establish that the claimed IAIs were legitimate, including a contractor affidavit and a work proposal signed by the contractor and the owner.  Both documents listed the work items to be performed and the total cost of the work.  The contractor's affidavit also stated that the work was completed and that the contract was paid in full.  Additionally, the landlord provided dated and signed receipts with check numbers, indicating that it fully paid the contractor.  Each of these types of documents are specifically listed in DHCR Policy Statement 90–10 as acceptable forms of proof of the legitimacy of the IAIs. Moreover, the cost of the work easily qualified landlord for an IAI rent increase that would entitle it to high-rent vacancy deregulation of the apartment.

Aside from his own observations, petitioner failed to produce any relevant evidence to DHCR that the IAIs were fraudulent (see Yen Hsang Chang v Westside 309 LLC, 222 AD3d 550, 551 [1st Dept 2023] [“a tenant's personal observations regarding the condition of their apartment or quality or extent of improvements are insufficient indicia of fraud”] ).  The purported inconsistencies between the contractor's affidavit and the actual improvements made as observed by petitioner were similarly not suggestive of fraud (see Breen v 330 E. 50th Partners, L.P., 154 AD3d 583, 584 [1st Dept 2017] ).  Nor was it irrational for DHCR to find that the work constituted renovations, rather than repairs (see Matter of Linden v New York State Div. of Hous. & Community Renewal, 217 AD2d 407, 407 [1st Dept 1995] ).

The court properly denied as academic petitioner's motion for a preliminary injunction, because it denied the article 78 petition.

We have considered petitioner's remaining arguments and find them unavailing.