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