BA 310403 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     S.J.R. 5455
          IN THE MATTER OF  THE  ADMINISTRATIVE      ADMINISTRATIVE  REVIEW
          APPEAL OF                               DOCKET NO.: BA 310403 RO

              K. M. MANAGEMENT CORPORATION,
                                                  DRO DOCKET NO.: TC-082229-G

                                  PETITIONER
          ----------------------------------X                                   


             ORDER AND OPINION MODIFYING THE COMMISSIONER'S PRIOR ORDER
                                         AND
                     GRANTING PETITION FOR ADMINISTRATIVE REVIEW


          On January 6, 1987 the above-named petitioner  filed  a  Petition
          for Administrative Review against an order issued on December  2,
          1986 by the District Rent Administrator, 10 Columbus Circle,  New
          York,  New  York  concerning  housing  accommodations  known   as
          Apartment 2J at 117-01D Park  Lanes,  Richmond  Hills,  New  York
          wherein the District Rent Administrator determined that the owner 
          had overcharged the tenant in the amount of $7,170.52,  including
          interest for overcharges collected since April 1, 1984 and excess 
          security.

          On November 27, 1990 the Commissioner issued an Order and Opinion 
          granting in part the owner's petition for review of order  Number
          TC 082229-G by using the rent charged on July 1, 1974 as the base 
          rent and further reducing overcharges by granting an increase for 
          a  new  stove  and  refrigerator  and  adding  fuel   adjustments
          authorized under Guidelines 10b,  10c,  and  10d.   As  a  result
          overcharges were reduced to $5,008.45.

          The owner sought judicial review of the Commissioner's Order  and
          Opinion pursuant to Article 78 of  the  Civil  Practice  Law  and
          Rules (CPLR).  A stipulation and agreement was  executed  between
          the attorneys for the respective parties  on  February  19,  1991
          wherein the Order and Opinion was re-opened and remitted  to  the
          Division  of   Housing   and   Community   Renewal   (DHCR)   for
          reconsideration by the Commissioner as based on  the  holding  in
          the case of J.R.D. Management v. Eimicke.

          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 administrative appeal.

          This proceeding was originally commenced by the filing on January 
          30, 1984 of the rent overcharge complaint by the tenant in  which
          she stated that she had commenced occupancy in June,  1979  at  a
          rent of $285.00 per month.






          BA 310403 RO

          In answer to the complaint the owner submitted a complete  rental
          history from November 1, 1972, when the first  tenant  after  the
          apartment was decontrolled assumed  occupancy  under  a  one-year
          lease at a rent of $145.00 per month.  After  the  expiration  of
          that lease, the tenant remained in the apartment  n  a  month-to-
          month tenancy at the same rent until the tenant  executed  a  new
          lease, on July 1, 1974, at a rent of $165.00 per month.

          In Order Number  CDR  27,599,  the  District  Rent  Administrator
          determined that the tenant had been overcharged in the amount  of
          $7,170.52 as of June 14, 1986 and directed the  owner  to  refund
          such overcharges to the tenant as well as to reduce the rent.

          It was determined that the base rent was $145.00 per month  being
          the rent in effect on June 30,  1974  and  that  the  lease  that
          became effective  on  July  1,  1974,  for  a  rent  of  $165.00,
          resulted in a monthly overcharge of $4.77.

          The  Commissioner  is  of  the  opinion  that  the   finding   of
          overcharges should be revoked.

          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).

          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






          BA 310403 RO
          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.

          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, the owner  has  submitted  a  rental  history  that
          conforms to the JRD ruling.  As indicated on  the  chart  annexed
          hereto and made a part hereof, the rental  history  submitted  by
          the owner herein below indicates that there were  no  overcharges
          collected through June 14, 1986, the final date reviewed  in  the
          appealed order.

          If  the  owner  has  already  complied  with  the  District  Rent
          Administrator's order and there are arrears due to the owner as a 
          result of the instant  determination,  the  tenant  may  off  the
          arrears in twenty-four (24) equal monthly  installments.   Should
          the tenant vacate after the issuance of this order, said  arrears
          shall be payable immediately.

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

          ORDERED, that this petition be, and the same hereby is,  granted;
          and that the District Rent Administrator's order be, and the same 
          hereby is, revoked in accordance with this Order and Opinion.



          ISSUED:
                                                  ------------------------
                                                  ELLIOT SANDER
                                                  Deputy Commissioner
           
             
                                          
    

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