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STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
-----------------------------------X SJR No.: 4375
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: AI 210176 RO
Charles Quimby, DISTRICT RENT ADMINISTRATOR
DOCKET NO.: K-3103849-R
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
AFTER RECONSIDERATION PURSUANT TO COURT ORDER
On September 23, 1986, the above-named owner filed a petition
seeking administrative review of an order issued on August 19,
1986, by the Rent Administrator at Columbus Circle, New York,
New York, concerning the housing accommodations known as
Apartment 3R at 642 President Street, Brooklyn, New York in which
order the Administrator had determined that the tenants were
paying excessive rent.
On July 14, 1989, the Commissioner issued an order denying the
owner's appeal. The owner then petitioned the Supreme Court,
under Article 78 of the Civil Practice Law and Rules, requesting
that the Commissioner's order be annulled.
On December 15, 1989, Justice Vaccaro granted that petition to
the extent of remanding this matter to the above-referenced
Division for redetermination with reference, inter alia, to the
case of J.R.D. Management v. Eimicke (discussed below), and on
June 26, 1991, the Justice denied the Division's request to
reargue his order.
This proceedi g originated when the tenants of the above-
referenced accommodation filed a complaint of rental overcharge
with the predecessor of this Division.
After the owner had failed to respond to the Division's request
for a complete rental history of the subject apartment, the Rent
Administrator issued the aforementioned order of August 19, 1986,
in which, utilizing the Section 42A default procedure, he found
a rent overcharge and determined the lawful stabilization rent to
be $230.36 as of March 31, 1985.
The aforementioned order of July 14, 1989, upheld the
Administrator's order in the face of several arguments not
pertinent here. The aforementioned Article-78 petition and
present remand to the Commissioner followed.
Before Justice Vaccaro the owners argued, inter alia, that the
rent in effect on April 1, 1980, must be deemed the base rent for
purposes of overcharge calculation. The court ruled that the
tenant would not be entitled to a Fair Market Rent Appeal,
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instructing the Commissioner to base his calculations on the
tenant's initial rent with no right to challenge same.
On remand the Commissioner, having considered the record in the
light of the aforementioned order of the Supreme Court, will
grant this petition to the extent of recalculating the overcharge
Section 42A of the former Rent Stabilization Code required 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) to date and to produce
such records to the rent agency upon demand.
Section 26-516 of the Rent Stabilization Law, effective April 1,
1984, limited an owner's obligation to produce rent records by
providing that an owner may not be required to maintain or
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 had been the rent agency's policy that overcharge complaints
filed prior to April 1, 1984 were 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). Section 42A of the Code
in effect on March 31, 1984 required an owner to submit complete
rent records going back to 1974 for such overcharge complaints.
In following this policy, the rent agency had sought to follow
the legislative intent inherent in the Omnibus Housing Act
(Chapter 403, Laws of 1983), as implemented by predecessor agency
to the Division of Housing and Community Renewal (DHCR), in the
determination of rent overcharge complaints filed with the CAB
prior to April 1, 1984 by applying the law in effect at the time
such complaint were filed so as not to deprive such tenants of
their right to have the lawful stabilized rent deprive tenants
whose overcharge claims went back more than four years prior to
April 1, 1984 of their right to recover all such 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. New York Code Conciliation and Appeals
Board, 65 N.Y.2d 898, 493 N.Y.S.2d 455 (1985).
However, in the case of J.R.D. Management Corp. v. Eimicke, 148
A.D.2d 610, 539 N.Y.S.2d 667 (App. Div., 2d Dep't 1989), motion
for leave to reargue or for leave to appeal to the Court of
Appeals denied, App. Div. 2d Dep't, 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, it was held 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 that four years of rent records.
Following the issuance of the decision in J.R.D., the Appellate
Division, First Department, in the case of Lavanant v. Division
of Housing and Community Renewal, 148 A.D.2d 185, 544 N.Y.S.2d
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331 (1989), issued a decision in direct conflict with the holding
in J.R.D. The Lavanant court expressly rejected the J.R.D.
holding, finding that the DHCR may require an owner to submit
complete rent records, rather than records for not more than four
years, finding that that requirement is rational and is supported
by the language and legislative history of the Omnibus Housing
Because in the instant case the subject apartment is located in
the Second Judicial Department, and in accordance with the Court
directive, the DHCR is constrained to follow the J.R.D. decision
in determining the tenant's overcharge complaint, limiting the
requirement for the submission of rent records to no earlier than
April 1, 1980.
The record reflects that the apartment in question was subject to
New York City rent control on that date, and moreover that the
first stabilized lease (that of the complaining tenants herein)
commenced on January 1, 1982. The $400 monthly rent under that
lease is, under the Rent Stabilization Code, the initial legal
regulated rent for the subject accommodation. Recalculation of
the lawful stabilized rent in the succeeding lease -- the only
one that was before the Administrator -- shows that there was no
overcharge in the $428 rent collected thereunder.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that this petition be and the same hereby is granted and
the Rent Administrator's order, revoked. The maximum lawful rent
for the subject premises was $428.00 per month on March 31, 1985;
and it is
FURTHER ORDERED, that if the owner has already complied with the
Administrator's order and there are arrears due to the owner as a
result of the instant determination, the tenants may pay off the
arrears in twenty-four monthly installments. Should a tenant
vacate after the issuance of this order or have already vacated,
such arrears shall be payable immediately.