STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
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
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
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."
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
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
(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.
(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
(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
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
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
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.
JOSEPH A. D'AGOSTA