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.AK210055RO
: DRO DOCKET NO.K3106435R
Dorchester associates TENANT:Ultima V. Tetteh
c/o Joseph Shamah, Mgr.
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On November 5, 1986, the above-named owner filed a Petition for
Administrative Review against an order issued on October 7, 1986 by
the Rent Administrator concerning the housing accommodations known
as 1911 Dorchester Road, Brooklyn, New York, Apartment No. 2J
wherein the Rent Administrator determined that the owner was in
default due to its failure to submit the requisite rental history.
On January 5, 1988, a supplement to this petition was filed with
the Division by the owner c/o Finkelstein, Borah, Schwartz,
Altschuler & Goldstein, P.C.
The Administrative Appeal is being determined pursuant to the
provisions of Section 2526.1 of the Rent Stabilization Code.
The issue herein is whether the Rent Administrator's order finding
the owner in default 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 by the filing on February
23, 1984 of a rent overcharge complaint by the tenant.
In answer to the tenant's complaint, the owner submitted rent
records dating back to April 1, 1980.
In Order Number K3106435R the Rent Administrator determined that,
due to the owner's failure to submit the requisite rental history,
the base rent and subsequent lawful stabilization rents were based
on the Section 42A default procedure, effecting a rent overcharge
of $3,949.95, including excess security and interest on that
portion of the overcharge occurring on and after April 1, 1984.
In this appeal, the petitioner, Dorchester Associates, states that,
among other things, it is the new owner as of November 21, 1984.
The petitioner disputes the Rent Administrator's finding of
overcharges to the tenant and requests reversal of the Rent
On January 5, 1988, the owner filed a supplement to this petition
wherein it disputes the Rent Administrator's finding that the prior
owner had defaulted for not having submitted a complete rental
history, based on its contention therein that the prior owner
purchased the subject premises upon a judicial sale and that the
rental history submitted, dating back to such purchase, must
therefore be deemed complete. The owner asserts in its supplement
that, among other things, the Rent Administrator's order should be
On December 18, 1986, the tenant's response was filed with the
The Commissioner is of the opinion that this petition should be
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 of 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., Dec. 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 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.
Given that, 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,
limiting the requirement for rent records to April 1, 1980, and,
concommitantly, establishing the base rent as the rent charged on
April 1, 1980 and precluding consideration of rents collected prior
thereto. Since a rental history from April 1, 1980 (the base rent
date) to the date the complainant tenant took occupancy had, in
fact, been submitted in the proceeding before the Rent
Administrator as required, the Rent Administrator's application of
the Section 42A default procedure in establishing the base rent and
subsequent lawful stabilization rents was not warranted.
Furthermore, for the period April 1, 1980 through August 31, 1986
used in the Administrator's calculations, there is no evidence that
the tenant paid any excess in rents lawfully allowed under the
applicable rent guidelines.
Therefore, the Administrator's order finding a rent overcharge must
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 shall be 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 Divisions ruling in
JRD, it is
ORDERED, that this petition for administrative review be, and the
same hereby is, granted, that the order of the Rent Administrator
be, and the same hereby is, revoked, and it is found that no rent
JOSEPH A. D'AGOSTA