AK 110251-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
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. AK 110251-RO
CDR 25575
: DISTRICT RENT OFFICE
Sharon Towers Realty, DOCKET NO. Q-3120440-R
TENANT: Krikor Kasparian
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On November 17, 1986 the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
October 31, 1986 by the Rent Administrator, 10 Columbus Circle,
New York, New York concerning the housing accommodations known
as 62-59 108th Street, Forest Hills, New York, Apartment No. 3-R
wherein the Rent Administrator determined that the owner had
collected a rent overcharged and directed the owner to refund
the overcharge to the tenant.
On December 29, 1987 the petition was granted in part by the
assessment of interest rather than treble damages, and by the
allocation of overcharges between present and past owners.
Subsequent thereto, the petitioner-owner filed a Petition in the
Supreme Court pursuant to Article 78 of the Civil Practice Law
and Rules. The proceeding was remitted to the Division of
Housing and Community Renewal (DHCR) to determine the lawful rent
based on the rental history from 1976, and the owner's petition
is herein decided on the merits.
The issue herein is whether the Rent Administrator's order was
warranted.
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 in March, 1984 by the
tenant filing a rent overcharge complaint, in which he stated
that he had commenced occupancy on June 1, 1978 at a rent of
$260.44 per month.
In the Order appealed herein, the Administrator determined that
the owner had failed to provide a full rental history for the
subject apartment. As a result, a rent overcharge was found; a
refund ordered; and treble damages were assessed on that part of
AK 110251-RO
the overcharge collected on or after April 1, 1984.
In its Petition, the current owner essentially asserted that it
purchased the subject building on June 1, 1981; that the only
rental records it received from the former owner were leases then
in effect, other than documents indicating that a rent of $245.00
was paid in a lease beginning in approximately March, 1976; that
a prior owner had purchased the subject building pursuant to a
judicial sale; and that the monthly rentals charged for the
subject apartment have always been lawful.
After a careful consideration of the entire evidence of record,
the Commissioner is of the opinion that the owner's petition
should be granted.
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) and to produce such
records to the DHCR upon demand.
Section 26-516 of the 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 to
produce rent records for more than four (4) years prior to the
most recent registration and, concomitantly, established a four
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 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 rights 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 four years prior to
April 1, 1984 of the 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).
However, it has recently been held in the case of J.R.D. Mgmt. v.
Eimicke, 148 A.D.2d 610. 539 N.Y.S. 2d 667 (App. Div. 2d Dept.,
1989). motion for leave to reargue or for leave to appeal to the
Court of Appeals denied ( App. Div. 2d Dept., 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
AK 110251-RO
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.
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 Dept. 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 instant 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.
Therefore, although the owner submitted evidence only of a rent
of $245.00 in 1976, this is not a default, and subsequent lawful
rents are based on $245.00. The lawful stabilization rent in the
complainant's lease from June 1, 1978 to May 31, 1980 is $260.44
per month (June 30, 1977 rent of $245.00 increased by a 5%
vacancy allowance and 8 1/2% for a two-year vacancy lease equals
$278.08, limited to the $260.44 rent charged); in the lease from
June 1, 1980 to May 31, 1982 is $291.00 per month (June 30, 1979
rent of$260.44 increased by 12% for a two-year lease equals
$291.69, limited to the $291.00 rent charged), and in the lease
from June 1, 1982 to May 31, 1984 is $319.44 per month (September
30, 1981 rent of $291.00 + 13% for a two-year renewal lease
equals $328.83, limited to the $319.44 rent charged). Since the
owner charged rents of $260.44, $291.00 and $319.44 in the
complainant's leases, there was no overcharge, and the
Administrator's October 31, 1986 order, as modified by the
Commissioner's December 29, 1987 order, finding an overcharge
must therefore be revoked.
If the owner has already complied with the Rent Administrator's
order and there are arrears due to the owner as a result of the
instant determination, the tenant is permitted to pay off the
arrears in twelve equal monthly installments. Should the tenant
vacate after the issuance of this order, or have already vacated,
said arrears shall be payable immediately.
THEREFORE, in accordance with the Appellate Division ruling in
JRD, it is
ORDERED, that this petition for administrative review be, and
the same hereby is, granted, that the Rent Administrator's
October 31, 1986 order and the Commissioner's December 29, 1987
order be, and the same hereby are, revoked, and it is found that
no rent overcharge occurred. The lawful stabilization rent is
$319.44 per month in the lease from June 1, 1982 to May 31, 1984.
ISSUED:
AK 110251-RO
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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