DOC. NO. ARL 12677-K
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. ARL 12677-K
: D.R.O. DOCKET NO.
4211 REALTY CO., PETITIONER : K-3102999-R
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
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
thereof.
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.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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