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. AJ 110183-RO
                                         :  
       ZEAL MANAGEMENT                      DISTRICT RENT ADMINISTRATOR'S 
                                            DOCKET NO. Q 3120829-R
                           PETITIONER    :  ORDER NO.  CDR 22,310
     ------------------------------------X                             

           ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW

     On  October  7,  1986,  the  above-named  owner  filed  a   Petition   for
     administrative review of an  order  issued  on  September  3,  1986  by  a
     District Rent Administrator concerning the housing accommodations known as 
     34-10 75th Street, Jackson Heights, New York, Apartment 6C.

     The Commissioner has reviewed all of the evidence in the  record  and  has
     carefully considered that portion of the record  relevant  to  the  issues
     raised by the petition for review.

     On March 30, 1984, the tenant, Gary McTiernay, filed a complaint  of  rent
     overcharge.

     The rent  agency  served  a  copy  of  the  tenant's  complaint  upon  the
     petitioner-owner on November 7, 1984 and required it to submit a  complete
     rental history to the Base Rent Date.  The petitioner  (a  managing  agent
     for the owners) failed to reply.

     On May 20, 1986 a Final Notice of Pending Default  was  served  upon  B.L.
     Management, Inc., who had become managing agent for the  building  shortly
     before.  In June, 1986, that managing agent  submitted  a  rental  history
     covering the period from October 1, 1978 to September 30, 1986.

     On September 3, 1986 the District Rent Administrator issued the order here 
     under review, finding that the owner  had  failed  to  submit  a  complete
     rental history as required by Section 42A of the Rent  Stabilization  Code
     then in effect, establishing  the lawful stabilization rent based upon the 
     default, and directing the owner to roll back the rent and to  refund  all
     overcharges and penalties, including treble damages for those  overcharges
     occurring on and after April 1, 1984.

     In its petition for administrative review the owner asserts, in substance, 
     that  the  District  Rent  Administrator's  finding  was   incorrect   and
     unwarranted, and that it should be required to produce records  goin  back
     to 1974.

     After careful consideration, the Commissioner is of the opinion  that  the
     petition for review should be granted.









          DOCKET NUMBER: AJ 110183-RO
     In the instant proceeding, the owner  failed  to  produce  a  full  rental
     history of the apartment going back to June 30, 1974.

     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  the  New  York  City
     Conciliation and Appeals  Board  (CAB),  the  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 complaints were  filed  so  as
     not to deprive complaining tenants of  their  right  to  have  the  lawful
     stabilized rent determined from the June 30, 1974 base date and so as  not
     to deprive tenants whose overcharge claims went back more than four  years
     before April 1, 1984 of their right to recover all such  overcharges.   In
     such cases, if the owner failed to produce the required rent records,  the
     lawful stabilized rent was determined pursuant to  the  default  procedure
     approved by the Court of Appeals in 61 Jane Street Associates v. New  York
     City 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 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  than
     four years of rent records.

     Following the issuance of the decision in J.R.D. Management, 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 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 







          DOCKET NUMBER: AJ 110183-RO
     an owner to submit complete rent records, rather than records for not more 
     than four years, and that that requirement is rational and is supported by 
     the language and legislative history of the Omnibus Housing Act.

     Because in the instant case the subject apartment is located in the Second 
     Judicial Department, 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.

     Accordingly, the Commissioner has recalculated the  legal  regulated  rent
     utilizing the rent as of April 1, 1980 as the  basis  for  calculation  of
     rents for all subsequent periods.  In doing so, it is found that there was 
     no overcharge through September 30, 1986, the latest date  encompassed  by
     the order of the District Rent Administrator.  The  calculations  are  set
     forth on the attached Rent Calculation Chart, which is  fully  a  part  of
     this order and opinion.  It is noted that  rents  for  subsequent  periods
     should be calculated based upon the lawful rents set forth on the chart.

     THEREFORE, in accordance with the Rent Stabilization Law and Code, it is

     ORDERED, that this petition be, and the same hereby is, granted, and  that
     order of the District Rent Administrator, issued on September 3, 1986  be,
     and the same hereby is, revoked; and it is

     FURTHER ORDERED, that the tenant may pay any arrears in rent arising as  a
     result of this order in twenty-four equal monthly installments  commencing
     with the rent payment date immediately  following  the  issuance  of  this
     order, unless the tenant has already vacated the subject apartment or does 
     vacate the subject apartment before the arrears are fully paid,  in  which
     events the arrears shall be payable immediately.

     ISSUED:








                                                                   
                                            ELLIOT SANDER
                                         Deputy Commissioner

    

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