AL 410446 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 410446 RO
DOUGLAS NEMENS,
D.R.O. ORDER NO.: CDR 27,454
D.R.O. DOCKET NO.: TC-068852-G
TENANT: ROBERT SONNENSCHEIN
PETITIONER
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
AND
MODIFYING ADMINISTRATOR'S ORDER
On December 19, 1986 the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
November 24, 1986 by the Rent Administrator at 10 Columbus
Circle, New York, New York, concerning housing accommodations
known as apartment number 2R at 338 West 72nd Street, New York,
New York, wherein the Rent Administrator established the
stabilized rent and directed the owner to refund $5,394.60
including interest from April 1, 1984.
The Commissioner notes that this proceeding was initiated prior
to April 1, 1984. Sections 2526.1(a)(4) and 2521.1(d) of the
Rent Stabilization Code (effective May 1, 1987) governing rent
overcharge and fair market rent proceedings provide that
determination of these matters be based upon the law or code
provisions in effect on March 31, 1984. Therefore, unless
otherwise indicated, reference to Sections of the Rent
Stabilization Code (Code) contained herein are to the Code in
effect on April 30, 1987.
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 on January 18, 1983 by
the filing of a complaint of rent overcharge with the New York
City Conciliation and Appeals Board (CAB, the agency formerly
charged with enforcing the Rent Stabilization Law) by the tenant.
The owner failed to submit a complete rental history from the
base date.
On the chart attached to and made a part of the order, the
Administrator established the stabilized rent under the lease
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term which ended on January 31, 1984.
In its Petition, the owner contends that, the Administrator erred
on the rent calculation chart attached to the order by failing to
acknowledge that the owner had answered the complaint.
In his answer to the petition, the tenant, in substance, asks
that the petition be denied and that the order below be affirmed.
The Commissioner is of the opinion that this petition should be
denied.
The Commissioner notes that based on a stipulation of settlement
dated June 6, 1988, between the owner and tenant, the
Administrator terminated the tenant's application for an order
directing the owner to offer the tenant a renewal lease (DRO
Docket No. BK 410061 RV). That stipulation was entered into in
the context of a non-payment proceeding. The tenant and the
owner were represented by counsel and the stipulation was "So-
Ordered" by the Civil Court Judge. The tenant specifically
withdrew its complaint under BK 410061 RV. As part of the stated
consideration from the owner, in that stipulation, the owner
agreed "to waive and forgive all past rent and/or use and
occupancy which has accrued through this date and further agrees
to waive the payment of future rents and/or use and occupancy
through July 31, 1988, including any adjustment and award in
Petitioner's [owner's] favor in the PAR under Docket No. AL
410446 RO." Among the items of consideration from the tenant,
the stipulation provided that the tenant deliver possession of
the apartment on or before July 31, 1988.
The Commissioner notes that the record herein does not indicate
whether or not all of the terms and conditions of the above
stipulation were complied with by the parties thereto.
Therefore, the said record does not indicate to what extent, if
any, the various terms and conditions therein became binding on
either of the parties thereto.
The Commissioner also notes that the funds to be paid and credits
allowed under the stipulation cannot be readily related to the
refund directed in the appealed order.
The Commissioner also notes that the Division's registration
records indicate that for 1989, the apartment was registered as
exempt from registration, as of July 1, 1988, by reason of owner
or owner's employee's occupancy; and that said apartment was not
registered for 1990.
The Commissioner also notes that in the tenant's November, 1984
complaint, filed under DRO Docket No. BK 410061 RV, the tenant
stated that his February 1, 1984 through July 31, 1986 lease rent
was $461.75; which the Commissioner finds represents the correct,
7%, increase due under Guidelines No. 15 for said lease over the
rent determined in the appealed order as the legal rent on
September 30, 1983.
Based on all of the above circumstances and noting the absence in
the stipulation of language which clearly indicates the owner's
intention to withdraw the instant PAR, the Commissioner finds
AL 410446 RO
that said PAR was not withdrawn by the June 6, 1988 Stipulation
and that said PAR must be determined on its merits.
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,
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
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legislative history of the Omnibus Housing Act.
Since in the instant case the subject dwelling unit is located in
the First Department, the DHCR is not constrained to follow the
JRD decision in determining the tenant's overcharge complaint,
limiting the requirement for rent records to April 1, 1980.
The Commissioner finds that the owner did answer the complaint,
but failed to sustantiate September 1, 1974 (the commencement
date of the first lease submitted by the owner) as the base date.
Therefore, the owner was properly held in default below. That
default has not been cured on appeal.
The Commissioner also finds that the tenant's last name is
misspelled in the order below and that order should hereby be
amended to correct the spelling of the tenant's last name from
Sonnenschen (as it appears in the order below) to the correct
spelling: Sonnenschein.
The Commissioner notes that, upon the expiration of the period in
which the owner may institute a proceeding pursuant to Article
Seventy-eight of the Civil Practice Law and Rules, the
Administrator's Order, as amended hereby, may be filed and
enforced by the tenant in the same manner as a judgment, provided
that doing so does not constitute an attempt to collect more than
one refund for the overcharges found in the Administrator's
order.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that the Petition be, and the same hereby is, denied
and that the Administrator's order be, and the same hereby is,
amended in accordance with the order and opinion.
ISSUED:
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ELLIOT SANDER
Deputy Commissioner
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