Docket No. BC 410512-RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                              DOCKET NO.: BC 410512-RO      
             NICOLA S. BRUSCO,                   DRO DOCKET NO.:              
                                                             L 3116015-RT

                                                 TENANT:  PATTI RICHARDS   

          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, 
          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 
          modified pursuant to this order.


                                        ELLIOT SANDER
                                        Deputy Commissioner

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