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
          ----------------------------------X                                   


            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.  







          AL 210694 RO
          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






          AL 210694 RO
          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:
                                                  ------------------------
                                                  ELLIOT SANDER
                                                  Deputy Commissioner
           
             
                                          
    

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