Docket No. BC 410512-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.: BC 410512-RO
NICOLA S. BRUSCO, DRO DOCKET NO.:
TENANT: PATTI RICHARDS
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART AND MODIFYING DISTRICT RENT ADMINISTRATOR'S ORDER
On March 31, 1987 the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
March 5, 1987 by the District Rent Administrator, 10 Columbus
Circle, New York, New York, concerning housing accommodations
known as apartment 1-C at 107 West 69th Street, New York, New
York, wherein the District Rent Administrator determined that the
tenant had been overcharged.
The Commissioner notes that this proceeding was initiated prior
to April 1, 1984. Sections 2526.1(a)(4) and 2521.1(d) of the
Rent Stabilization Code (effective May 1, 1987) governing rent
overcharge and fair market rent proceedings provide that deter
mination of these matters be based upon the law or code provisions
in effect on March 31, 1984. Therefore, unless otherwise
indicated, any reference in this order and opinion to Sections of
the Rent Stabilization Code is to the Code in effect on April 30,
1987, and this proceeding is being determined in accordance
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 of a rent
overcharge complaint by the tenant with the New York City
Conciliation and Appeals Board, one of the predecessor agencies to
the DHCR. The tenant took occupancy pursuant to a lease commenc
ing October 1, 1976 and expiring September 30, 1978 at a monthly
rent of $290.00.
The owner was served with a copy of the complaint and was
requested to submit rent records to prove the lawfulness of the
rent being charged. In answer to the complaint, the owner stated
that the tenant was not the tenant of record as of the date this
complaint was filed. The owner did not submit either rent records
or leases to prove the lawfulness of the rent being charged.
On November 14, 1986 the owner was sent a Final Notice of Pending
Default, affording it an opportunity to submit a complete rent
history. The owner was cautioned that failure to do so would be
Docket No. BC 410512-RO
considered a default. The owner failed to respond.
In Order Number 29,240 the Rent Administrator determined that, due
to the owner's failure to submit a complete rental history, the
owner had collected a rent overcharge of $5,373.78 through
February 28, 1987, including treble damages on that portion of the
overcharges occurring on or after April 1, 1984, and directed the
owner to refund such overcharge to the tenant.
In its petition, the owner contends that it did not default in
responding to the original complaint; that the complaining tenant
had discontinued the complaint years ago; that the tenant was
evicted from the premises on July 10, 1985; that the tenant is
indebted to the owner for rents from January 1, 1985 to July 10,
1985, together with interest, attorney's fees, marshal's fees and
court costs; that the overcharge, if any, was not a willful act of
the owner, and that treble damages should not have been awarded.
The Commissioner is of the opinion that this petition should be
granted in part, but that the 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 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
Docket No. BC 410512-RO
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 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 First Department, the Lavanant decision governs, i.e., the
owner is required to submit complete rent records from the base
date of June 30, 1974, or from the date of decontrol, whichever is
Accordingly, in the absence of a full rental history, the
Commissioner finds that the application of the 42A default
procedure was proper.
Additionally, petitioner's contention that the tenant had
discontinued the complaint is not supported by the evidence of
Section 2526.1 of the current Rent Stabilization Code provides, in
pertinent part, that any owner who is found by the DHCR to have
collected any rent in excess of the legal regulated rent shall be
ordered to pay to the tenant a penalty equal to three times the
Docket No. BC 410512-RO
amount of such excess. If the owner establishes that the
overcharge was not willful, the DHCR shall establish the penalty
as the amount of the overcharge plus interest from the date of the
first overcharge on or after April 1, 1984.
The Commissioner finds that the petitioner has not established
that the overcharge in this proceeding was not willful; according
ly, the imposition of treble damages was appropriate.
However, the Commissioner deems it necessary to modify the
determination of overcharge, based on the evidence that the
tenant vacated the apartment on July 10, 1985, as follows:
Overcharge pre April 1, 1984 = $ 2,729.88
Overcharge after April 1, 1984 -
$410.43, tripled 1,231.29
Excess security 25.18
Total overcharge, applying treble damages $ 3,986.35
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 the same manner as a judgment.
The owner has asserted that the tenant has vacated owing in excess
of $2,400.00. In the event that the tenant attempts to enforce
this order in a court of competent jurisdiction, the amount owed
the owner can be used as an offset against any recovery by the
tenant if first reduced to a judgment.
Because this determination concerns lawful rents only through July
10, 1985, the owner is cautioned to adjust subsequent rents to an
amount no greater than that determined by this order plus any
lawful increases, and to register any adjusted rents with this
order and opinion being given as the explanations for the
A copy of this order and opinion is being served upon the current
occupant of the apartment.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
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
modified pursuant to this order.