DOC. NO.: AJ 110572-RO
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 110572-RO
: D.R.O. DOCKET NOS.:
GEORGE SUBRAJ, : Q-3119409-R
PETITIONER : CDR 22865
------------------------------------X
ORDER AND OPINION GRANTING PETITION FOR
ADMINISTRATIVE REVIEW IN PART AFTER REOPENING
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
month.
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.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
|
