Docket Number: BB 210274-RO
                                 STATE OF NEW YORK
                           OFFICE OF RENT ADMINISTRATION
                                    GERTZ PLAZA
                              92-31 UNION HALL STREET
                              JAMAICA, NEW YORK 11433

        APPEAL OF                              DOCKET NO.: BB 210274-RO
          4149-55 KINGS HIGHWAY,               DRO DOCKET NO.: K-3102446-R
                                                            CDR 28647
                              PETITIONER    :  TENANT: GEORGE EISENSTAT

        On February 17,  1987  the  above  named  petitioner-owner  filed  a
        Petition for  Administrative  Review  against  an  order  issued  on
        January 13, 1987 by the District  Rent  Administrator,  10  Columbus
        Circle, New York, New York  concerning  the  housing  accommodations
        known as Apartment 2-F at 4149 Kings Highway,  Brooklyn,  New  York,
        wherein the District Rent Administrator determined  that  the  owner
        had overcharged the tenant.

        The  issue  in  this   appeal   is   whether   the   District   Rent
        Administrator's order was warranted.

        The applicable sections of the Law are Section 26-516  of  the  Rent
        Stabilization Law and Sections 2522.6, 2526.1(a), 2526.1(f),  2527.2
        and 2527.6(c) of the Rent Stabilization Code.

        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  in  March,
        1984 of a rent overcharge complaint  by  the  tenant,  in  which  he
        stated that he had commenced occupancy on October 1, 1983 at a  rent
        of $275.00 per month.

        The (former) owner (4149-55 Kings Highway, P.O.  Box  14067,  Church
        Street Station, New York, N.Y.)  was  served  with  a  copy  of  the
        tenant's complaint and was requested to submit leases from the  base
        date.  On October 2, 1984 49-55 K-H Associates (100  Ocean  Parkway,
        Suite BB, Brooklyn) requested an extension of time to answer, and on 
        November 19, 1984 its attorney submitted a prior tenant's lease from 
        January 1, 1982 to December 31, 1982 at a rent  of  $260.00,  stated
        that the inadvertent collection of a vacancy allowance  resulted  in
        the complainant being charged $275.00  commencing  October  1,  1983
        rather than $270.40, and  advised  that  49-55  K-H  Associates  had
        acquired the  subject  premises  on  June  11,  1984.   The  owner's
        attorney also stated that overcharges to date would be refunded.

        On March 19, 1986, 4149-55 Kings Highway Associates (P.O. Box 14067) 
        was served with a Final Notice of Pending Default, which  stated  in
        substance that unless leases  were  submitted  from  the  base  date
        certain  DHCR  procedures  would  be  used  to  establish  a  lawful

        Docket Number: BB 210274-RO
        stabilized rent.

        On July 24, 1986 a letter was received from the tenant stating  that
        he had not received a refund, but that his rent had been reduced  to
        $294.74.  On November 3, 1986, 4149-55 Kings Highway Associates  was
        served with another Final Notice of  Pending  Default  at  P.O.  Box
        14067.  At the bottom of the Notice, which  was  also  sent  to  the
        owner's attorney, was written a request for the name and address  of
        the former owner.

        On November 14, 1986 a  letter  was  received  from  the  49-55  K-H
        Associates' attorney stating that, pursuant to the Notice of Pending 
        Default, the prior owner was Louis Pashman, 331 Madison Avenue, Room 
        402, New York, New York.  The attorney stated that he  assumed  that
        that was the  only  information  required  as  it  was  specifically
        requested on the notice, and asked  to  be  notified  if  additional
        documentation was required.  That same day a copy  of  the  tenant's
        complaint was sent to Mr. Pashman.  In reply, Mr.  Pashman  asserted
        that 4149-4155 Kings Highway Associates no longer existed, and  that
        the property had been sold on June 11, 1984  to  Robert  Wilson  and
        Michael Moss, 41-49 K-Y Associates, 100 Ocean  Parkway,  Apt.  3-BB,
        Brooklyn, New York.

        In an order issued on January 13, 1987 the Administrator  determined
        that, due to  the  owner's  failure  to  submit  a  complete  rental
        history, the tenant had been overcharged in the amount of  $2,291.18
        as of August 31, 1986.  The order directed the owner to refund  such
        overcharge to the tenant as well as to reduce the rent.   The  order
        was sent to 4149-55 Kings Highway at P.O.  Box  14067,  and  to  the
        attorney for 49-55 K-H Associates.

        The recipient of the order sent to "4149-55 Kings Highway"  at  P.O.
        Box 14067 wrote on the first  page  of  the  order:   "Wrong  owner.
        Property  sold  June  11,  1984  to  Michael  Moss,  c/o  41-49   KY
        Associates, 100 Ocean Parkway, 3BB, Brooklyn, New York  11218,"  and
        mailed it back to the DHCR.

        In this petition, 4149-55 Kings Highway, by the same attorney as 49 
        55 K-H Associates of 100 Ocean Parkway, contends in  substance  that
        the Administrator failed to serve the prior owner although  informed
        of the prior owner's name and  address;  that  this  prejudiced  the
        owner because the prior owner may have additional evidence regarding 
        the legality of the tenant's rent; that the  Administrator  did  not
        search DHCR records to determine if  the  apartment  was  previously
        subject to rent control; that in response  to  a  November  3,  1986
        Final Notice of Pending  Default  which  also  requested  the  prior
        owner's name and address, the owner's attorney on November 12,  1986
        submitted information about the  prior  owner  and  stated  then  he
        assumed that no additional documentation  was  required  because  of
        the specific request on the notice; that, contrary to the  statement

        in the Administrator's order that the owner  did  not  respond,  the
        owner did respond on November 19, 1984 and November  12,  1986;  and
        that the Administrator improperly  expanded  the  tenant's  specific
        rent overcharge complaint to a general rent overcharge complaint.
        In answer, the tenant asserts in substance that the petition  should
        be dismissed.

        Docket Number: BB 210274-RO
        On January 2, 1991 the owner  by  its  attorney  was  given  another
        opportunity to submit a rental history  from  April  1,  1980  or  a
        later, proven base date.  To date no response has been received.

        The Commissioner is of the opinion  that  this  petition  should  be
        granted in part; and that the District  Rent  Administrator's  order
        should be modified.

        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 the 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,   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  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.
        Eimike, 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.J.L., 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,

        Docket Number: BB 210274-RO
        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 present 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.  However, even on 
        appeal there have been no rent records submitted for  periods  prior
        to  1982,  so  it  is  appropriate  to  affirm  so   much   of   the
        Administrator's order as found the owner in default.  

        Regarding the owner's contention that the  Administrator  improperly
        expanded a complaint of specific rent overcharge to a  complaint  of
        general overcharge, a tenant's request for prior leases submitted on 
        a Tenant's Complaint of  Rent  Overcharge  Form,  as  was  the  case
        herein, is considered to be a complaint of general rent  overcharge,
        since without prior leases the tenant generally cannot be sure  that
        a legal rent is being charged.  The owner cannot  be  said  to  have
        been unfairly prejudiced by having the tenant's complaint treated as 
        a complaint of general rent overcharge, as  the  owner  was  clearly
        informed on several occasions that a  rental  history  was  required
        from the base date.

        Regarding the owner's  assertion  that  the  Administrator  did  not
        search DHCR rent control records, such  records  indicate  that  the
        building was newly constructed in 1951 and was therefore not subject 
        to Rent Control.

        While the owner asserts that the prior owner was not  served,  Louis
        Pashman at 331 Madison Avenue  was  served  with  the  complaint  on
        November 14, 1986.  By letter dated November 30, 1986 Louis  Pashman
        stated that the property had been sold to Robert Wilson and  Michael
        Moss, 41-49 KY Associates, 100 Ocean  Parkway;  that  4149-55  Kings
        Highway Associates no longer existed; and that neither Vinnia Realty 
        nor Louis Pashman had any more connection with  the  property.   The
        copy of the order sent to 4149-55 Kings  Highway,  P.O.  Box  14067,
        Church Street Station was received by the prior owner and mailed 
        back with the notation that the property had been  sold  to  Michael
        Moss, c/o 41-49 KY Associates.  While  Section  2526.1  (f)  of  the
        current Rent Stabilization Code would hold a  properly-served  prior
        owner solely responsible for those overcharges collected by it prior 
        to April 1, 1984, and jointly and  severally  responsible  with  the
        current owner for overcharges collected by it on and after April  1,
        1984, there is some uncertainty as to the name of the  prior  owner.
        The 1984 registration listed the  owner  as  4149-55  Kings  Highway
        Associates at the 331 Madison Avenue address of Vinnia  Realty,  its
        manager (and of Vinnia  Realty's  President,  Louis  Pashman).   The
        tenant's March, 1984 complaint (prior to the  property  being  sold)
        listed the owner as being 4149-55 Kings Highway Associates  at  P.O.
        Box 14067, Church  Street  Station.   Louis  Pashman  and/or  Vinnia
        Realty received the copy of the Administrator's order sent to "4149 
        55 Kings Highway" at that address.  The 1985 and 1986  registrations

        Docket Number: BB 210274-RO
        listed the owner as being 49-55 K-H Associates at 100 Ocean Parkway. 
        Upon being served with a  copy  of  the  complaint  at  331  Madison
        Avenue, Louis Pashman stated that 4149-55 Kings  Highway  Associates
        no longer existed.  However, the current owner's attorney refers  to
        "4149-55 Kings Highway" as being the current owner  and  petitioner,
        and states that the November 3, 1986 Final Notice to  4149-55  Kings
        Highway Associates at P.O. Box 14067 was sent to the current  owner.
        Louis Pashman and Vinnia Realty received both the tenant's complaint 
        and the Administrator's order, although asserting that they were not 
        applicable as the property had been sold.   Because  "4149-55  Kings
        Highway Associates" was at least the name of the owner at  the  time
        Louis Pashman and Vinnia Realty were associated with it (whether  or
        not it is a name also used by the current owner), Louis Pashman  and
        Vinnia Realty are responsible  in  the  manner  set  forth  for  the
        overcharges collected by them prior to the sale of the  property  on
        June  11,  1984.   To  make  this  clearer  than  it  was   in   the
        Administrator's order, the Administrator's order is hereby  modified
        to include Louis Pashman and Vinnia Realty as the prior owner.   The
        tenant may collect overcharges occurring prior to April 1, 1984 only 
        from them.  The tenant  may  collect  the  remaining  overcharge  of
        $1,893.50 ($2,291.18 minus $397.68) from  the  current  owner.   The
        Commissioner notes that Vinnia Realty is not listed in  the  current
        Manhattan telephone directory.

        Because of the possibility that the rents charged were  not  reduced
        after the Administrator's order, the owner is  cautioned  to  adjust
        the rent, in leases after those considered by the Administrator,  to
        amounts no greater than that determined by the Administrator's order 
        plus any lawful increases, and to register any adjusted  rents  with
        the  Administrator's  order  being  given  as  the  reason  for  the
        adjustment.  Because of the possibility that the tenant  herein  may
        have vacated by the time that this determination is issued,  a  copy
        of this determination is being mailed to the tenant-in-occupancy.

        This order may, upon the expiration of the period in which the owner 
        may institute a proceeding pursuant to Article seventy-eight of  the
        civil practice law and rules, be filed and enforced by the tenant in 


        Docket Number: BB 210274-RO

        the same manner as a judgement or not in excess  of  twenty  percent
        thereof per month may be offset against any rent thereafter due  the

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

        ORDERED, that this petition be, and the same hereby is,  granted  in
        part and that the District Rent Administrator's order  be,  and  the
        same hereby is, modified in accordance with this order and  opinion.
        The total overcharge collectible from the current owner is $1,893.50 
        as of August 31, 1986, including excess  security  of  $57.24.   The
        lawful stabilization rent is $237.50 in the lease ending 
        September 30, 1986.


                                        ELLIOT SANDER
                                        Deputy Commissioner 

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