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
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BC 210384-RO
:
DRO DOCKET NO.: K 3104157-R
DAVID LEMPEL,
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On March 25, 1987, the above named petitioner-owner filed a Petition for
Administrative Review against an order issued on February 18, 1987, by the
District Rent Administrator, concerning housing accommodations known as
160 West 2nd Street, Brooklyn, New York, Apartment B-4.
The appealed order of the District Rent Administrator determined that the
tenant had been overcharged in the amount of $3,671.26, from September 1,
1975; that the owner failed to provide a full rental history and further
directed the current owner to roll back the rent to the lawful stabilized
amount and to make full refunds to the tenant. The overcharge total
included excess security and interest on that portion of the overcharge
occurring on or after April 1, 1984.
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.
In this petition, the owner contends, in substance, that he acquired the
subject premises on August 18, 1981; that he should not be held
responsible for the prior owner's overcharges; that he unsuccessfully
attempted to obtain rent records from the prior owner and that he should
not be held responsible for a failure to submit rent records over which he
had no control.
In response, the tenant asserted that she will continue paying the same
rent of $263.50 per month until a decision is rendered by the DHCR on the
owner's appeal.
The Commissioner is of the opinion that this petition should be granted.
The proceeding was commenced by the filing, on March 31, 1984 of a rent
overcharge complaint by the tenant. The tenant stated that she first
moved into the subject apartment in September, 1975.
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.
DOCKET NUMBER: BC 210384-RO
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 ha/s 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) 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 conflict
with the 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 record contains a rental history going back to April 1,
1980. Therefore, the owner can not be held to have defaulted.
DOCKET NUMBER: BC 210384-RO
Accordingly, the Commissioner notes that it will not be necessary to
consider the owner's other allegations on appeal.
Starting with a base date rent of $212.12 in the lease from February 1,
1980 to January 31, 1983, the lawful stabilization rent in the subsequent
lease is as follows:
$233.33 ($212.12 plus 10% increase above the September
30, 1982 rent of $212.12 = $233.33 for a 3 year renewal lease).
Because those were the rents actually charged, there has been no
overcharge, and the Administrator's order finding an overcharge must,
therefore, be revoked.
Furthermore, the Commissioner has examined the rents from September 1,
1975 to March 31, 1980 and finds that the owner did not collect an
overcharge during this period.
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,
or have previously vacated, 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 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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