ARL12550L

                                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


      ------------------------------------X  SJR6824
      IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
      APPEAL OF                              DOCKET NO. ARL12550L

                                          :  DISTRICT RENT OFFICE
           Clarendon Management Corp.,       DOCKET NO. L3114579R/T
                                             
                                             TENANT: Melanie Moore            
             
                            PETITIONER    : 
      ------------------------------------X                             


          ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                     IN PART


      On August 11, 1986, the above-named owner filed a Petition for 
      Administrative Review against an order issued on July 7, 1986, by the 
      Rent Administrator, 10 Columbus Circle, New York, New York, concerning 
      the housing accommodations known as 440 West 24th Street, New York, 
      New York, Apartment No. 6C, wherein the Administrator determined that 
      the owner had overcharged the tenant.

      Subsequently, the petitioner sought an order from Supreme Court under  
      Article 78 of the Civil Practice Law and Rules, mandating this Division 
      expeditiously to determine the administrative appeal herein, and the 
      court has issued such an order. 

      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, references to sections of the Rent 
      Stabilization Code (Code) contained herein are to the Code in effect on 
      April 30, 1987.

      This proceeding had originated with the filing in March, 1984, of a 
      rent-overcharge complaint by the tenant.  In answer to the complaint the 
      owner in November, 1984, submitted a rental history running from 1974 
      through June of 1985, and stated (a) that the tenant had occupied the 
      apartment under a vacancy lease, and (b) that, an error having been made 
      in the rent charged under the lease, the owner had "therefore re- 
      calculated the tenant's initial lease and all subsequent increases." 












          ARL12550L


      In Order Number CDR 19,157, the Administrator determined that the tenant 
      had been overcharged in the amount of $3,135.30 including interest on 
      that portion of the overcharge occurring on and after April 1, 1984, and 
      directed the owner to refund that overcharge to the tenant.

      In this petition the owner makes several contentions, which will be 
      addressed seriatim.  Where no tenant's position is stated, that 
      indicates either that the tenant has not addressed the particular issue, 
      or that she has acquiesced in petitioner's position due solely to what 
      she calls a "just compromise."

      (1)Petitioner asserts that Section 26-516(g) of the Rent Stabilization 
      Code, as interpreted by the Supreme Court in J.R.D. Management v. 
      Eimicke, 148 A.D. 2d 610, 539 N.Y.S. 2d 667 (2d Dept. 1989) (hereafter 
      JRD) requires that an administrator use only the rental records for the 
      four years immediately preceding issuance of his order, so that the 
      instant matter must be remanded for a determination based on the rent 
      records going back only to July 7, 1982.  Since the JRD decision was 
      issued, however, the Appellate Division, First Department, in the case 
      of Lavanant v. DHCR, 148 A.D. 2d 185, 544 N.Y.S. 2d 331 (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 
      First Department, Lavanant controls rather than J.R.D., and under 
      Lavanant the Administrator correctly utilized the entire rental history 
      herein. 

      (2) Petitioner asserts that the rent for the subject apartment on June 
      30, 1974, was $265 rather than the $240 found by the Administrator.  The 
      tenant acquiesces in the use of $265, and evidence as to that amount was 
      presented to the Administrator.  The base rent herein will therefore be 
      adjusted in accordance with the petition.

      (3) The owner contends that it has erroneously been denied an 
      "electrical-inclusion" rental increase for the lease period commencing 
      on January 1, 1978.  The argument is that the owner could have taken 
      such an increase in the previous lease but did not, leaving it free to 
      take it during the lease commencing during the period covered by Rent 
      Guidelines Board Order Number 9.  The question is resolved by the 
      Commissioner's decision regarding issue 2 above; the base rent having 
      now been set at $265 instead of $240, it becomes clear that the owner 
      took no electrical-inclusion increase in charging $285 in the next 
      lease, so that it was indeed entitled to collect such an increase in the 
      one after that.  The matter is rectified on the attached calculation 
      chart, which is hereby incorporated in this order and opinion.







          ARL12550L

      (4) The Administrator has allowed, for the lease commencing on May 1, 
      1980, a 10% vacancy increase, which petitioner states should be 15%.  
      The applicable Guideline Order, as reflected in the aforementioned 
      chart, does indeed allow for 15%.

      (5) Appended to the petition are two leases that were not before the 
      Administrator.  The owner's explanation is: that when the owner had 
      submitted leases to the Administrator, the latest lease had been for a 
      one-year period; that the Administrator mistakenly considered that lease 
      as being for two years, believing therefore that his order dealt with 
      all leases effective through June 30, 1986; but that in fact another 
      lease -- appended to the petition -- commenced July 1, 1985 (and yet 
      another on July 1, 1986).  The tenant acknowledges the authenticity of 
      the newly-submitted leases, and they are incorporated in the 
      Commissioner's computation herein in order to correct the aforementioned 
      error.

      (6) Petitioner submits a copy of an order of this Division granting 
      permission to assess a rental increase based on the completion by the 
      owner of a "major capital improvement."  Because that order was issued 
      before the order here appealed, the Administrator should have included 
      the major capital improvement rent increase in his computation.  The 
      rent calculation chart attached hereto incorporates the "M.C.I. 
      increase" in question.

      (7) Petitioner finally relates two instances of self-correction that are 
      not reflected in the Administrator's order.  

      The first pertains to the aforementioned acknowledgment of overcharge 
      that the owner made in responding to the tenant's initial complaint.  
      The owner specifically promised therein to lower the rent (to $654.39) 
      and to repay certain overcharges through a rental credit.  The petition 
      now states that a rental reduction was made, credits granted totalling 
      $983.92, and excessive security refunded.  The tenant acknowledges the 
      reduction and the credits, and the record contains documentary 
      substantiation thereof.  They will therefore be incorporated in the 
      calculation herein.

      The Commissioner, finally, appreciates petitioner's candor in pointing 
      out that a new-equipment increase of $22.93, incorporated in the 
      Administrator's calculations as effective May 1, 1984, should not have 
      been effective (because the improvement was not yet made) until March of 
      1985.  The Commissioner has made the necessary computational 
      adjustments.

      The owner is directed to reflect the findings and determinations made in 
      this order on all future registration statements, including those for 
      the current year if not already filed, citing this order as the basis 
      for the change.  Registration statements already on file, however, 
      should not be amended to reflect the findings and determinations made in 
      this order.  The owner is further directed to adjust subsequent rents to 
      an amount no greater than that determined by this order plus any lawful 












          ARL12550L

      increases.

      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 
      24 equal monthly installments.  Should the tenant vacate after the 
      issuance of this order or have already vacated, said arrears shall be 
      payable immediately.  If on the other hand the owner has not complied
      with the Administrator's order, the tenant may, after the time has 
      expired during which the owner may institute a proceeding under Article 
      78 of the Civil Practice Law and Rules, offset up to 20 percent per 
      month of the total overcharge against future rental payments, until the 
      overcharge has been thus repaid.

      THEREFORE, in accordance with the Rent Stabilization Law and Code, it is

      ORDERED, that this petition be, and the same hereby is, granted to the 
      extent set forth above and on the attached chart, and that the 
      Administrator's order be modified to the same extent.   The total 
      overcharge, including interest, is $368.67, and the lawful rent as of 
      July 30, 1986, $723.14.

      ISSUED:



                                                                    
                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner
    

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