BA 310403 RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
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
ORDER AND OPINION MODIFYING THE COMMISSIONER'S PRIOR ORDER
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
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
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.