AI110267RO

                                STATE OF NEW YORK
                    DIVISION OF HOUSING AND COMMUNITY RENEWAL
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

      ------------------------------------X 
      IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
      APPEAL OF                              DOCKET NO. AI110267RO

                                          :  DRO DOCKET NO. Q3122506R
           Concerned Management,
                                             TENANT: Joan Williams            
               
                            PETITIONER    : 
      ------------------------------------X                             

          ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW


      On September 29, 1986, the above-named owner filed a Petition for 
      Administrative Review against an order issued on August 25, 1986, by a 
      Rent Administrator, concerning the housing accommodations known as     
      71-04 Little Neck Parkway, Floral Park, New York, Apartment No. 134B, 
      wherein the Rent Administrator determined that the owner had overcharged 
      the tenant.

      This proceeding was originally commenced by the filing in March, 1984,  
      of a rent overcharge complaint.

      In answer to the tenant's complaint, the owner stated in substance that 
      the property had been in transition through foreclosure, and submitted 
      a rental history from the year 1979.

      In Order Number 21,179, the Rent Administrator determined that, due to 
      the owner's failure to submit a complete rental history, the tenant had 
      been overcharged in the amount of $3113.07, and directed the owner to 
      refund such overcharge to the tenant as well as to reduce the rent.

      In this petition, the owner contends in substance that it did not 
      default as it submitted all the rent records it had.

      In answer to the owner's petition, the tenant states in substance that
      she has been charged rent for a four-room apartment when in fact the 
      subject accommodations have three, so that, inter alia, a per-room 
      rental increase allowed by the above-referenced Division was too large 
      by 25%.

      The Commissioner is of the opinion that this petition should be granted.
           
      Section 42A of the former Rent Stabilization Code requires that an owner 
      retain complete records for each stabilized apartment in effect from 
      June 30, 1974 (or the date the apartment became subject to rent 
      stabilization, if later) and to produce such records to the DHCR upon 
      demand.

      Section 26-516 of the Rent Stabilization Law, effective April 1, 1984, 
      limited an owner's obligation to provide rent records by providing that 







          AI110267RO

      an owner may not be required to maintain or to produce rent records for 
      more than four years prior to the most recent registration, and 
      concomitantly, established a four-year limitation on the calculation of 
      rent overcharges.

      It has been the DHCR's policy that overcharge complaints filed prior to 
      April 1, 1984, are to be processed pursuant to the Law or Code in effect 
      on March 31, 1984. (See Section 2526.1 (a) (4) of the current Rent 
      Stabilization Code.)  The DHCR has therefore applied Section 42A of the 
      former Code to overcharge complaints filed prior to April 1, 1984, 
      requiring complete rent records in these cases.  In following this 
      policy, the DHCR has sought to be consistent with the legislative intent 
      of the Omnibus Housing Act (Chapter 403, Laws of 1983), as implemented 
      by the New York City Conciliation and Appeals Board (CAB) the 
      predecessor agency to the DHCR, to determine rent overcharge complaints 
      filed with the CAB prior to April 1, 1984, by applying the law in effect 
      at the time such complaints were filed so as not to deprive such tenants 
      of their rights to have the lawful stabilized rent determined from the 
      June 30, 1974 base date and so as not to deprive tenants whose 
      overcharge claims accrued more than four years prior to April 1, 1984 of 
      the right to recover such overcharges.  In such cases, if the owner 
      failed to produce the required rent records, the lawful stabilized rent 
      would be determined pursuant to the default procedure approved by the 
      Court of Appeals in 61 Jane Street Associates v. CAB, 65 N.Y.2d 898, 493 
      N.Y. S. 2d 455 (1985).

      However, it has recently been held in the case of J.R.D. Mgmt. v. 
      Eimicke, 148 A.D.2d 610. 539 N.Y.S. 2d 667 (App. Div. 2d Dept., 1989), 
      motion for leave to reargue or for leave to appeal to the Court of 
      Appeals denied ( App. Div. 2d Dept., N.Y.L.J., June 28, 1989, p.25, 
      col.1), motion for leave to appeal to the Court of Appeals denied (Court 
      of Appeals, N.Y.L.J., Nov. 24, 1989, p.24, col.4), motion for leave to 
      reargue denied (Court of Appeals, N.Y.L.J., Feb. 15, 1990, p.25, col.1), 
      that the law in effect at the time of the determination of the 
      administrative complaint, rather than the law in effect at the time of 
      the filing of the complaint, must be applied, and that the DHCR could 
      not require an owner to produce more than four years of rent records.

      Since the issuance of the decision in JRD, the Appellate Division, First 
      Department, in the case of Lavanant v. DHCR, 148 A.D.2d 185, 544 
      N.Y.S.2d 331 (1989), has issued a decision in direct conflict with the 
      holding in JRD.  The Lavanant court expressly rejected the JRD ruling, 
      holding that the DHCR may properly require an owner to submit complete 
      rent records, rather than records for just four years, and that such 
      requirement is both rational and supported by the law and legislative 
      history of the Omnibus Housing Act.

      Since in the instant case the subject dwelling unit is located in the 
      Second Department, the DHCR is constrained to follow the JRD decision in 
      determining the tenant's overcharge complaint, limiting the requirement 
      for rent records to April 1, 1980.  An examination of the rent records 
      from April 1, 1980, discloses that no rent overcharge occurred.  
      Therefore, the Rent Administrator's order finding a rent overcharge must 
      be revoked.
      As to the tenant's assertions regarding the number of rooms, etc., the 
      Commissioner can only entertain an assignment of error in an 
      Administrator's order if it is made in the context of a Petition for 
      Administrative Review.  The tenant therefore had to file her own 


          AI110267RO

      petition in order to challenge a calculation by the Administrator 
      related to the number of rooms in her apartment; she did not do so, and 
      cannot raise that question in this proceeding.

      If the owner has already complied with the Rent Administrator's order 
      and there are arrears due to the owner as a result of the instant 
      determination, the tenant is permitted to pay off the arrears in 24 
      equal monthly installments.  Should the tenant vacate after the issuance 
      of this order or have already vacated, said arrears shall be payable 
      immediately.

      THEREFORE, in accordance with the Appellate Division ruling in JRD, it 
      is

      ORDERED, that this petition for administrative review be, and the same 
      hereby is, granted, that the order of the Rent Administrator be, and the 
      same hereby is, revoked, and it is found that no rental overcharge 
      occurred.

      ISSUED:



                                                                    
                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner