In a rent overcharge case, the most common defense that landlords pose is that of the 1/40th improvements increase. If an owner adds new services, improvements, or equipment to an rent stabilized or rent controlled apartment, the owner may charge the tenant a rent increase equal to 1/40th of the cost of the new equipment, including installation costs.

If a rent stabilized apartment is occupied, the landlord must get the tenant's written consent to the improvements in order to qualify for the increase. If the apartment is vacant, the owner does not have to get tenant consent.

In every overcharge case I have ever done, the landlord has claimed that the so-called improvements were done before the client moved in, while the apartment was vacant. This is ironic in situations where the tenant is complaining about lack of repairs. Apparently, the only time that the landlord is working on the apartment is when it is empty!

When the landlord alleges that improvements were made, the most common effective strategy is to compel the landlord to produce every invoice, cancelled check, contract and permit to justify and substantiate ever dollar of so-called improvments.