DOC. NO. ARL 12677-K
                  STATE OF NEW YORK
                              OFFICE OF RENT ADMINISTRATION
                                       GERTZ PLAZA
                                 92-31 UNION HALL STREET
                                 JAMAICA, NEW YORK 11433
         APPEAL OF                           :   DOCKET NO. ARL 12677-K   
                                             :   D.R.O. DOCKET NO.           
              4211 REALTY CO.,   PETITIONER  :              K-3102999-R

         On August 6,1986, the above-named petitioner-owner filed a Petition for 
         Administrative Review against an order issued on July 24, 1986, by the 
         District Rent Administrator, 92-31 Union Hall Street, Jamaica, New York, 
         concerning housing accommodations known as Apartment 1-D, 4211 Avenue K, 
         Brooklyn, New York.

         The Commissioner has reviewed all of the evidence in the record and has 
         carefully considered that portion of the record relevant to the issue 
         raised by the administrative appeal.

         This proceeding was originally commenced by the filing of a rent 
         overcharge complaint by the tenants.  The tenants took occupancy pursuant 
         to a lease commencing August 1, 1979 and expiring July 31, 1981 at a 
         monthly rent of $335.00.

         In response, the owner indicated that it took title to the subject 
         building in July, 1978 in a foreclosure proceeding and was only furnished 
         with copies of leases dating from 1975, copies of which it submitted with 
         the response.

         In Order Number CDR 20,046, the District Rent Administrator established 
         the lawful stabilization rent based on the owner's failure to submit a 
         complete rental history for the subject apartment and directed a refund of 
         $2,502.25, including interest on overcharges collected after April 1, 
         1984, to the tenant.

         In this petition, the owner again indicates that it purchased the subject 
         premises in a foreclosure proceeding and contends that is should not be 
         held liable for its inability to produce complete rent records as a result 

         The tenant did not submit an answer to this petition.

         The Commissioner is of the opinion that this petition should be granted.

         DOC. NO. ARL 12677-K

         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), in cases involving rent 
         overcharge complaints filed prior to April 1, 1984.  

         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.

         DOC. NO. ARL 12677-K

         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 legislative history of the Omnibus Housing Act.

         Since in the instant case the subject dwelling unit is located in the 
         Second 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.

         In this case, an examination of the record reveals that the complete 
         rental history for the subject apartment from January 1, 1975 is in 
         evidence.  Based thereon, the contentions raised regarding foreclosure are 
         moot.  An examination of such rental history discloses that there is no 
         overcharge as indicated on the rent calculation chart attached hereto and 
         made a part hereof.

         If there are arrears due to the owner as a result of the instant 
         determination, the tenants may pay off the arrears in twenty-four (24) 
         monthly installments.  Should the tenants vacate after the issuance of 
         this order, said arrears shall be payable immediately.

         Because this determination concerns lawful rent only through July 31, 
         1986, the owner is cautioned to adjust subsequent rents to an amount no 
         greater than that determined by this Order and Opinion and to register any 
         adjusted rent with this Order and Opinion being given as the explanation 
         for the adjustment.

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

         ORDERED, that this Petition be, and the same hereby is, granted the 
         District Rent Administrator's order be and the same hereby is revoked in 
         its entirety and it is found that there is no overcharge.


                                                 ELLIOT SANDER
                                                 Deputy Commissioner



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