Docket Number: BF-210003-RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BF 210003-RO
A.S.D. REALTY, INC., DRO DOCKET NO.: K 3105107-R
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART, AND MODIFYING ADMINISTRATOR'S ORDER
On May 29, 1987, the above-named petitioner-owner filed a Petition
for Administrative Review against an order issued on May 6, 1987, by
the District Rent Administrator, 10 Columbus Circle, New York, New
York, concerning the housing accommodations known as Apartment 5-D
at 130 East 18th Street, Brooklyn, New York, wherein the District
Rent Administrator determined that the tenant had been overcharged.
The Commissioner has reviewed all 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 commenced by the filing of a rent overcharge
complaint by the tenant on March 31, 1984 with the New York City
Conciliation and Appeals Board.
The tenant took occupancy pursuant to a 1-year lease commencing on
September 1, 1977.
On October 19, 1984, the owner submitted an answer, but failed to
provide a lease history for the subject apartment.
In Order No. 30,205 the Administrator found that the owner had
failed to submit a complete rental history, determined that the
legal regulated rent would be established by using the DHCR's
Section 42A rent roll procedure, established the lawful regulated
rent as of October 1, 1985 at $291.24 per month, in accordance with
the default procedure, and computed total overcharges in the amount
of $2,120.94 including excess security and accrued interest from
April 1, 1984.
In its petition, the owner claims, among other things, that (1) the
Administrator's use of an apartment in another line was arbitrary
and in error; (2) weight should be given to the owner's having
purchased the premises at foreclosure; (3) the DHCR failed to
consider other apartments renting at or about the same date with a
higher rent; (4) the Division, at worst, should have used the
tenant's initial rent without deducting the Guidelines.
The Commissioner is of the opinion this petition should be granted
in part, and the District Rent Administrator's order modified.
Section 42A of the former Rent Stabilization Code requires that an
Docket Number: BF-210003-RO
owner retain complete records for each stabilized apartment in
effect from June 30, 1974 (or the date the apartment became sub-
ject 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 four years prior to the most recent
registration, and concomitantly, established a four 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 four 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. Mgmt. 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, p.25, col.1) motion for leave to appeal to the Court of
Appeals denied (Court of Appeals, N.Y.L.J., Nov. 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 four years of rent records.
Since the issuance of the decision in JRD, the Appellate Division,
First Department, in the case of Lavanat 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
Docket Number: BF-210003-RO
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.
The tenant has occupied the premises since September, 1977. The
record contains a complete rental history from the revised base date
of April 1, 1980. The overcharges have been computed on the
attached rent chart, which is fully made a part of this order. The
total of overcharges is $95.11.
If the owner has already complied with the Administrator's order and
there are arrears due to the owner as a result of the instant
determination, the tenant may pay 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, pursuant to the Rent Stabilization Law and Code, it is
ORDERED, that this petition be, and the same hereby is granted in
part; and that the Administrator's order be, and the same hereby is
amended in accordance with this order and opinion.