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

          -----------------------------------X
          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
          -----------------------------------X

            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,






          BA 110401 RO
          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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