ADM. REVIEW DOCKET NO.: BF 210321-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.: BF 210321-RO    
                                           :      D.R.O. DOCKET NO.:   
          110    OCEAN    PARKWAY    REALTY            :         K    3105341-R
                                           :
                            PETITIONER     :       
       ------------------------------------X

              ORDER AND OPINION REVOKING COMMISSIONER'S PRIOR ORDER AND
                                          OPINION AFTER RECONSIDERATION AND GRANTING PETITION FOR
                                ADMINISTRATIVE REVIEW


          This proceeding was originally commenced by  the  filing  of  a  rent
       overcharge complaint by the tenant with the New York  City  Conciliation
       and Appeals Board, one of the predecessor agencies to  the  Division  of
       Housing and Community Renewal.  The tenant took  occupancy  pursuant  to
       lease commencing December 1, 1974 and expiring  November  30,1976  at  a
       monthly rent of $215.00.

          The owner and prior owner were served with a copy  of  the  complaint
       and were requested to submit rent records to prove the lawfulness of the 
       rent being charged.  In answer to the complaint, both  the  prior  owner
       and the current owner submitted leases for the  subject  apartment  from
       December 1979.  In addition, the current owner stated that it took title 
       to the building as of August 1, 1985 and that the tenant  purchased  her
       apartment    as    a     cooperative     unit     in     March     1986.

          In  Order  Number  CDR  30,621,  the  District   Rent   Administrator
       established the lawful stabilized rent based on  the  default  procedure
       pursuant to Section 42A of the Code,  determined  that  the  tenant  had
       been overcharged in the amount of $4,151.10, including interest  on  the
       overcharge collected after  April  1,  1984  and  excess  security,  and
       directed the refund of this amount to the tenant. 

          The owner thereafter  filed  a  petition  for  administrative  review
       challenging the Administrator's  order.   In  its  petition,  the  owner
       contended that it submitted to the Administrator all leases on file  for
       the subject apartment, but that the Administrator failed to consider the 
       answer submitted by the owner  or  the  prior  owner.   The  owner  also
       asserted that calculation of the overcharge due from  the  owner  should
       end as of March 12, 1986, the date  the  tenant  purchased  the  subject
       apartment.  
        


          By order issued on August 29, 1991,  the  Commissioner  affirmed  the
       application of the default procedure based on  the  owner's  failure  to
       submit complete rent records and modified the Administrator's  order  to
       eliminate excess security and to allocate overcharge  liability  between
       the current owner and prior owner.







       ADM. REVIEW DOCKET NO.: BF 210321-RO
          The owner thereafter requested reconsideration of the  Commissioner's
       order.  Reconsideration was granted and the proceeding was  reopened  on
       November 5, 1991 due to an irregularity in a vital matter based  on  the
       failure to apply the ruling in the case of JRD Mgmt v. Eimicke.

          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  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






       ADM. REVIEW DOCKET NO.: BF 210321-RO
       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.   Therefore,  the  owner  cannot  be  held  to  have
       defaulted.  Recalculation of the lawful stabilized rent  from  April  1,
       1980 based on the rental history submitted by the owner below  indicates
       that the tenant was not overcharged.

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

          ORDERED, that the  Commissioner's  prior  order  and  opinion  issued
       August 29, 1991 be and the same hereby is revoked; the owner's  petition
       for administrative review  be  and  the  same  hereby  is  granted;  the
       Administrator's order be and the same hereby is  revoked  in  accordance
       with this order and opinion; and it is determined that  the  tenant  was
       not overcharged.

       ISSUED:


                                                                            
                                             JOSEPH A. D'AGOSTA
                                             Deputy Commissioner


        
    

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