DOC. NO.: AJ 110572-RO
                STATE OF NEW YORK
                             OFFICE OF RENT ADMINISTRATION
                                      GERTZ PLAZA
                                92-31 UNION HALL STREET
                                JAMAICA, NEW YORK 11433

        APPEAL OF                             :      DOCKET NO. AJ 110572-RO  
                                              :      D.R.O. DOCKET NOS.:
             GEORGE SUBRAJ,                   :           Q-3119409-R           
                               PETITIONER     :         CDR 22865


        On October 27, 1986, the above-named petitioner-owner was deemed to have 
        filed a Petition for Administrative Review against an order issued on    
        September 19, 1986 by the District Rent Administrator, 10 Columbus Circle, 
        New York, New York concerning housing accommodations known as Apartment   
        5G at 88-15 144th Street, Jamaica, New York wherein the District Rent 
        Administrator determined that the owner had overcharged the tenant.  (The 
        order listed the apartment as being in Forest Hills 
        and gave an incorrect Zip Code.)  On December 9, 1986 the petition was 
        rejected as untimely.  When the owner furnished evidence that the 
        petition was timely filed on October 24, 1986, an order was issued on 
        January 7, 1987 (incorrectly referring to the proceeding as being Docket 
        No. AJ 110752-RO rather than AJ 110572-RO) reopening the proceeding for 
        further consideration.

        The issue in this appeal is whether the District Rent Administrator's 
        order was warranted.

        The applicable sections of the Law are Section 26-516 of the Rent 
        Stabilization Law and Section 2526.1(a) of the current Rent 
        Stabilization Code.
        The Commissioner has reviewed all of the evidence in the record and has 
        carefully considered that portion of the record relevant to the issue 
        raised by the administrative appeal.

        This proceeding was originally commenced by the filing in March, 1984 of 
        a rent overcharge complaint by the tenant, in which he stated that he 
        had commenced occupancy on September 1, 1981 at a rent of $420.00 per 

        The owner was served with a copy of the complaint and was requested to 
        submit rent records to prove the lawfulness of the rent being charged.  

        DOC. NO.: AJ 110572-RO
        In answer to the complaint, the owner submitted only the complainant's 
        leases from September 1, 1981, and claimed that he received only an 
        assurance of the lawfulness of the rents, rather than receiving leases, 
        when he purchased the subject building from an elderly and now non- 
        cooperating former owner.

        In an order issued on September 19, 1986 the District Rent Administrator 
        determined that the owner had failed to submit a complete rental history 
        from the base date as required, and utilized established DHCR default 
        procedures to set the tenant's lawful initial rent at $334.95 and to 
        calculate an overcharge of $4,412.59 as of August 31, 1985.

        In this petition, the owner contends in substance that the order should 
        be revoked as the tenant's complaint was filed in retaliation for the 
        owner's enforcing his lawful rights in a dispute; that he should not be 
        liable for overcharges occurring prior to the time he acquired the 
        subject building; and that he has been able to obtain rent ledgers from 
        1979 from the former owner, showing the prior tenant to have been paying 
        $301.00 in a renewal lease.

        In a supplement to its petition, the owner asserts in substance that if 
        the default procedure is to be used, it should be based on the lowest 
        rent in the same line and not on the lowest rent in the building.

        In a letter of November 13, 1987 the owner advises that an oral 
        settlement agreement with the tenant will shortly be put in writing, and 
        requests that no order be issued until a copy of the written agreement 
        has been forwarded to the DHCR.  The file does not contain any later 
        mention of a settlement, even though the owner's attorney on December 
        14, 1990 wrote the DHCR to inquire as to the status of the proceeding.

        The tenant did not submit an answer to the owner's petition or later 
        submissions, although given an opportunity to do so.
        The Commissioner is of the opinion that this petition should be granted 
        in part.

        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) to date and to produce such records to the DHCR 
        upon demand.

        Section 26-516 of Rent Stabilization Law, effective April 1, 1984, 
        limited an owner's obligation to provide rent records by providing that 
        an owner may not be required to maintain or produce rent records for 
        more than 4 years prior to the most recent registration, and 
        concomitantly, established a 4 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 

        DOC. NO.: AJ 110572-RO
        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 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 accrued more than 4 years prior to April 1, 1984 of 
        their 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), in cases involving rent overcharge complaints filed 
        prior to April 1, 1984.

        However, it has recently been held in the case of J.R.D. Mgt. 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), 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 4 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 (App. Div. 1st Dep't 1989), has issued a decision in direct
        conflict with the holding in JRD.  The Lavanant court expressly 
        rejected the JRD ruling, finding 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 present 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.  The owner has now submitted rent 
        ledgers, which give the indication of being records made in the normal 
        course of business, from 1979.  The Commissioner finds it appropriate to

        make use of them to calculate the lawful stabilization rents and the 
        amount of overcharge, which are set forth on the amended rent 
        calculation chart attached hereto and made a part hereof.  The base date 
        rent is, however, $283.00 rather than $301.00 as contended by the owner.  
        The ledger states that the prior tenant's lease began October 1, 1979 

        DOC. NO.: AJ 110572-RO
        and ended September 30, 1982.  The $8.00 fuel cost adjustment under 
        Guideline 11a was temporary and did not become part of the base rent.  
        The additional $10.00 charge paid in most months is clearly a late fee, 
        and is in fact generally labelled as such in the rightmost column.  The 
        $301.00 paid was therefore not a rent in a renewal lease, which would 
        justify the complainant's initial rent being calculated as an increase 
        above $301.00, but was rather just the total amount paid, including 
        temporary charges and penalties, in the later stages of the prior 
        tenant's one lease which had a permanent rent of $283.00.

        The owner is correct that, for overcharges occurring prior to April 1, 
        1984, he is responsible only for his own portion of the overcharge.  
        $395.50 (7.2 months x $54.93 per month) of the $1318.32 overcharge in 
        the tenant's initial lease is ascribable to the former owner.  The 
        Commissioner notes that the former owner was not served in this 
        proceeding, so this order does not constitute an entitlement for the 
        tenant to collect any overcharge from the former owner.

        Regarding the owner's contention that the Administrator's order should 
        be revoked because the tenant filed his complaint as a retaliatory 
        measure:  The tenant's motivation does not affect his right to question 
        the lawfulness of his rent, particularly as no previous determination 
        had been made on that issue.  (Indeed, the records now available 
        indicate that the tenant was justified in suspecting that his rent 
        represented an unlawful increase over the previous tenant's rent.)

        The owner is cautioned to adjust the rent, in leases after those 
        considered by the Administrator to amounts no greater than that 
        determined by this order plus any lawful increases, and to register any 
        adjusted rents with this order being given as the reason for the 
        adjustment.  Because of the possibility that the tenant herein may have 
        vacated by the time that this determination is issued, a copy of this 
        determination is being mailed to the tenant-in-occupancy.

        This order may, upon the expiration of the period in which the owner may 
        institute a proceeding pursuant to Article Seventy-Eight of the Civil 
        Practice Law and Rules, be filed and enforced by the tenant in the same 
        manner as a judgment or not in excess of twenty percent thereof per 
        month may be offset against any rent thereafter due the owner.

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

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

        DOC. NO.: AJ 110572-RO

        ORDERED, that this petition be, and the same hereby is, granted in part 
        and that the District Rent Administrator's order be, and the same hereby 
        is, modified in accordance with this Order and Opinion.  The lawful 
        stabilization rents and the amount of overcharge are established on the 
        attached chart, which is fully made a part of this order.  The total 
        overcharge ascribable to the current owner, including excess security of 
        $58.38, is $2,444.16 as of August 31, 1985.

        Deputy Commissioner


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