AL 110604 RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK   11433

          ----------------------------------X     S.J.R. 6028
          APPEAL OF                               DOCKET NO.:  AL 110604 RO

                     MELOHN PROPERTIES,
                                                  DRO DOCKET NO.: Q-3119496-T


                                  AFTER COURT REMIT

          On December 22, 1986 the above-named owner filed a  petition  for
          administrative review of an order issued on November 18, 1986, by 
          a   District   Rent   Administrator   concerning   the    housing
          accommodations known as Apartment 3-B, 83-43  118th  Street,  Kew
          Gardens, New York, wherein the Administrator determined that  the
          tenant  had  been  overcharged  in  the  amount  of   $20,219.20,
          including excess security and interest  on  overcharges  incurred
          after April 1, 1984.

          On August 30, 1991, the Commissioner issued an order and  opinion
          denying the owner's opinion.

          Subsequently, the owner sought judicial  review  in  the  Supreme
          Court of the State of New York pursuant  to  Article  78  of  the
          Civil Practice Law and Rules.

          Incorporating a stipulation of settlement  between  the  parties,
          the Court (Hon. J. Rutledge, Queens County) issued  an  order  on
          January 21, 1992 remitting the proceeding to the New  York  State
          Division of Housing and Community Renewal for a  final  order  in
          accordance with the decision in the case of JRD v Eimicke.

          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 administrative appeal.

          This proceeding was originally commenced by the filing of a  rent
          overcharge complaint by the tenant on March 26, 1984.  The tenant 
          originally took occupancy pursuant to a  two-year  vacancy  lease
          commencing on August 1, 1977 and expiring on July 31, 1979  at  a
          monthly rent of $350.00.

          A copy of the complaint was served upon the owner  along  with  a
          notice advising the owner that the complaint was in reference  to
          a fair market rent appeal and rent overcharges.

          AL 110604 RO
          In Order No.  26,955,  issued  on  November  18,  1986  the  Rent
          Administrator determined that, although the tenant was ineligible 
          for a Fair Market Rent Appeal, overcharges were still found  that
          were entirely due to an excessive initial  rent.   It  was  noted
          that the prior tenant had paid a rent of $167.70,  and  that  the
          owner's claim that this amount was "artificially low" because the 
          tenant was related to the prior owner, was rejected.   Subsequent
          overcharges  were  then  calculated  as  based  on  the   correct
          guidelines increases for the tenant's  next  three  lease  terms,
          resulting in total overcharges of $20,219.20,  including  accrued
          interest since April 1, 1984, and excess security.

          In its petition, the owner argues that  contrary  to  the  stated
          intention of the order, the Administrator had  "merely  paid  lip
          service"  to  the  equities  involved  in  determining  that  the
          complainant's initial rent of $350.00 was not excessive.

          The Commissioner is of the opinion that this petition  should  be
          granted in accordance with the court directive in this case.

          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 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).

          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,

          AL 110604 RO
          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 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.
          Accordingly, on the chart attached hereto and made a part hereof, 
          the Commissioner has computed the stabilized rent from  April  1,
          1980,  when  the  subject  tenant  was   in   occupancy.    These
          computations show that no overcharges was collected.

          If  the  owner  has  already  complied  with  the  District  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  (24)   equal   monthly
          installments.  Should the tenant vacate  after  the  issuance  of
          this order or have already vacated, said arrears shall be payable 

          THEREFORE, in accordance with the decision in the  JRD  case  and
          the court order in this case, it is

          ORDERED, that this petition be, and the same hereby is,  granted;
          and that the Administrator's order be, and the  same  hereby  is,
          revoked and it is determined that the tenant was not overcharged.


                                                  JOSEPH A. D'AGOSTA
                                                  Acting Deputy Commissioner

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