BA 110401 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. BA 110401 RO
DISTRICT RENT
Grosvenor Associates ADMINISTRATOR'S
DOCKET NO. TC 83015-G
TENANT: Joseph Primous
PETITIONER
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On January 5, 1987, the above-named owner filed a petition
for administrative review of an order issued on December 19, 1986
by a District Rent Administrator, concerning the housing
accommodations known as Apartment 2-F, 105-55 62nd Drive, Forest
Hills, 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 issues raised by the petition for review.
The subject tenant filed a complaint of rent overcharge with
the New York City Conciliation and Appeals Board (C.A.B.), the
agency formerly charged with enforcement of the Rent
Stabilization Law.
On April 1, 1984 responsibility for the administration of
rent stabilization in New York City was transferred to the New
York State Division of Housing and Community Renewal (D.H.C.R.)
The tenant commenced occupancy on September 7, 1983 pursuant
to a one-year lease, expiring on August 31, 1984, at a monthly
rent of $400.00.
The owner submitted leases for the subject apartment from
January 1, 1977 through August 31, 1984. The owner's answer
stated that the rent was determined by the rent guidelines and
that the tenant's initial rent was increased by $5.50 for
scraping and polishing the floors. (1/40 of the cost). The
owner also alleged that the complainant was paying $193.18 less
that the maximum legal rent.
In the order under review herein, the Administrator found
that the owner had failed to submit a complete rental history and
determined that the owner was in default. The Administrator
found total overcharges in the amount of $1,548.80, including
excess security and treble damages for overcharges occurring
after April 1, 1984. In addition, the Administrator disallowed
the $5.50 per month rent increase, holding that scraping and
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polishing of floors is normal maintenance and is not the
installation of equipment.
In this petition for review, the owner asserts that the
owner acquired the subject premises at the end of 1983, and that
the former owner only provided leases starting from January 1,
1977; that the rent on January 1, 1977 was $185.00; that the
$220.00 for improvements was not factored in, in determining the
legal rent, and that the tenant owes the owner $1,500.00 in back
rent.
After careful consideration, the Commissioner is of the
opinion that the petition should be denied.
Section 42A of the former Rent Stabilization Code required
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 rent agency upon demand.
Section 26-516 of the Rent Stabilization Law, effective
April 1, 1984, limited an owner's obligation to produce rent
records by providing that an owner may not be required to
maintain or produce rent records for more than four years prior
to the most recent registration and, concomitantly, established a
four-year limitation on the calculation of rent overcharges.
It had been the rent agency's policy that overcharge
complaints filed prior to April 1, 1984 were 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). Section
42A of the Code in effect on March 31, 1984 required an owner to
submit complete rent records going back to 1974 for such
overcharge complaints. In following this policy, the rent agency
had sought to follow the legislative intent inherent in 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 Division of Housing and Community
Renewal (DHCR), in the determination of 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 tenants whose overcharge claims went back more
than four years prior to April 1, 1984 of their right to recover
all 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. New York
City Conciliation and Appeals Board, 65 N.Y.2d 898, 493 N.Y.S.2d
455 (1985).
However, in the case of J.R.D. Management Corp. 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,
Appeals, N.Y.L.J., Feb. 15, 1990, p.25, col.1, it was held 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 four years
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of rent records.
Following the issuance of the decision in J.R.D., the
Appellate Division, First Department, in the case of Lavanant v.
Division of Housing and Community Renewal, 148 A.D.2d 185, 544
N.Y.S.2d 331 (1989), issued a decision in direct conflict with
the holding in J.R.D. The Lavanant court expressly rejected the
J.R.D. holding, finding that the DHCR may require an owner to
submit complete rent records, rather than records for not more
than four years, finding that requirement is rational and is
supported by the language and legislative history of the Omnibus
Housing Act.
Because in the instant case the subject apartment is located
in the Second Judicial Department, the DHCR is constrained to
follow the J.R.D. decision in determining the tenant's overcharge
complaint, limiting the requirement for the submission of rent
records to no earlier than April 1, 1980.
The Commissioner notes that the owner submitted leases
starting from January 1, 1977, and the Commissioner will use the
rent set forth in that lease, $185.00 per month, as a base for
determining the legal regulated rent for subsequent periods. In
so doing the Commissioner finds that the Administrator's order
remains unchanged when re-calculating the rent.
The Commissioner further finds that the bill submitted to
the rent agency for the cost of scraping and polishing of floors
was for normal maintenance, and was not new equipment.
Accordingly, the Administrator's finding disallowing 1/40 of the
cost of the scraping and polishing in determining the legal rent
should be affirmed.
As to the owner's assertion that the tenant owes the owner
$1,500.00 in back rent, the Commissioner notes that this issue
was not submitted to the Administrator. Since this issue is
being submitted for the first time upon administrative review and
the owner did not explain why this issue could not reasonably
have been offered or included in the proceeding before the
District Rent Administrator, it is outside the scope of the
Commissioner's review in this proceeding and will not be
considered in establishing the rent or amounts due. However,
this order is issued without prejudice to the right of the owner
to seek recoupment of this amount, if warranted, in a court of
competent jurisdiction.
Accordingly, the Commissioner is of the opinion that the
Administrator's order should be affirmed.
The owner is cautioned that rents for the period from August
31, 1986 and thereafter as established by the Rent
Administrator's order of December 19, 1986 were not stayed by the
filing of the petition for administrative review and remain in
full force and effect.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that this petition be, and the same hereby is,
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denied, and that the Rent Administrator's order be, and the same
hereby is, affirmed; and it is
FURTHER ORDERED, that rents for periods subsequent to the
lease period commencing on September 1, 1984, and expiring on
August 31, 1986, shall be based upon the $349.38 monthly rent for
that lease period as determined by the Administrator; and it is
FURTHER ORDERED, that the owner shall immediately refund to
the tenant all amounts not yet refunded representing overcharges,
penalties, and excess security deposits; and it is
FURTHER ORDERED, that if the owner upon the expiration of
the period for seeking judicial review of this order pursuant to
Article 78 of the Civil Practice Law and Rules has refunded no
such amounts and the tenant has not credited any such amounts,
the tenant may file and enforce a certified copy of this order
as a judgment for the amount of $1,548.80, as against Grosvenor
Associates, or the tenant may offset no more than twenty percent
of such amount against his monthly rent payments until such
amount has been fully recovered.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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