AL 210694 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. AL 210694 RO
FRED LEIST,
DISTRICT RENT ADMINISTRATOR'S
DOCKET NO. K 3105091 R
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On December 19, 1986, the above-named owner filed a petition for
administrative review of an order issued on November 19, 1986 by
a District Rent Administrator, concerning housing accommodations
known as Apartment 2H, 3857 Kings Highway, Brooklyn, New York,
wherein the Administrator determined that a rent overcharge had
occurred.
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 petition for review.
This proceeding was commenced on March 31, 1984 upon the filing
of a general complaint of rent overcharge by the tenant with the
former New York City Conciliation and Appeals Board.
On April 1, 1984, responsibility for the administration of rent
stabilization in New York City was transferred to the New York
State Division of Housing and Community Renewal (DHCR).
On November 2, 1984 the DHCR received the owner's answer. The
owner alleged that he acquired the subject building at a
foreclosure sale on May 16, 1978, and that no rent records prior
to his purchase were available. It was also alleged that all
increases were within appropriate guidelines. The owner
submitted a copy of a Deed in Foreclosure, copies of all leases
from August 1, 1978, and a copy of a CAB order approving a
capital improvement rent increase.
In the order here under review, issued on November 19, 1986, the
Administrator determined that the owner had defaulted in its
obligation to supply complete copies of all leases from the base
date. The Administrator established that the lawful
stabilization rent was $269.48 from August 1, 1982 through July
31, 1984 and directed a refund of $1,730.88 in overcharges
including interest on post-April 1, 1984 overcharges through July
31, 1984.
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In his petition for administrative review, the owner repeats the
allegations made before the Rent Administrator. In addition, the
owner notes that in a subsequently filed objection to
registration by this tenant under Docket No. 0017238, the Rent
Administrator, in that case, found no overcharge. A copy of that
order was submitted with this petition.
The tenant interposed no answer to the petition for review.
After careful consideration, the Commissioner is of the opinion
that this 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) 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 four years prior to the most
recent registration, and concomitantly, established a four year
limitation on the calculation of rent overcharges.
It had 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 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 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 four 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 was later 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
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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 Dep't 1989),
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.
Because in the instant case the subject dwelling unit is located
in the Second Judicial 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.
As demonstrated on the annexed calculation chart, no overcharges
occurred, and the lawful stabilization rent from December 4, 1982
through July 31, 1984 should have been $297.00. The annexed Rent
Calculation Chart is fully incorporated in and made a part of
this order and opinion.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that this petition be, and the same hereby is, granted,
and that the District Rent Administrator's order be, and the same
hereby is, revoked, and that the tenant, who has vacated, shall
pay any arrears in rent arising as a result of this order
immediately.
ISSUED:
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ELLIOT SANDER
Deputy Commissioner
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