BC 410524 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 410524 RO

          8410-16, 21ST AVENUE, INC., OWNER,
                                                  DRO DOCKET NO.: TC 076269-G
                                                  TENANT:  GLADYS MCCABE


          On March 31, 1987, the above-named petitioner  filed  a  Petition
          for Administrative Review against an order  issued  February  27,
          1987 by the Rent Administrator, 10 Columbus Circle, New York, New 
          York concerning the housing accommodations  known  as  8410  21st
          Avenue, Brooklyn,  New  York,  Apartment  D-4  wherein  the  Rent
          Administrator  determined  the  lawful  stabilization  rent   and
          directed the owner to refund  an  overcharge  in  the  amount  of
          $1,754.40 inclusive  of  excess  security  and  interest  on  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 issue raised by the administrative appeal.

          The tenant commenced this proceeding  on  September  7,  1983  by
          filing an overcharge complaint with  the  former  New  York  City
          Conciliation and Appeals Board, the  predecessor  agency  of  the
          Division of Housing and Community  Renewal  (DHCR).   The  tenant
          stated she had taken possession of the subject apartment pursuant 
          to a two year lease commencing February 1,  1980  at  a  rent  of
          $225.00.  The tenant alleged that based on her knowledge  of  the
          prior tenant's rent, the  rent  she  was  being  charged  was  an

          A copy of the complaint  was  served  on  the  prior  owner,  Jay
          Realty, and on the current owner.  The owners were  requested  to
          submit copies of all leases or rent records pursuant  to  Section
          42A of the Code and were advised that  their  failure  to  do  so
          would be considered a default.  

          In reply to the complaint, the owner  submitted  a  current  rent
          roll and a copy of the lease of the previous tenant who the owner 
          stated, was the first stabilized tenant.  The owner asserted that 
          other than the lease submitted all prior rent  records  had  been
          destroyed  in  a  fire  in  1983.   The  owner  did  not   submit
          documentation to substantiate the base rent date for the  subject

          BC 410524 RO

          In the order here under review, the Administrator determined that 
          the owner had failed to submit  a  complete  rental  history  and
          applied approved  default  procedures  to  determine  the  lawful
          stabilization rent at $280.77 for the lease period June  1,  1986
          through May 31, 1988.  Based thereon, the Administrator  directed
          that an overcharge of $1,754.40, inclusive of excess security and 
          interest on the overcharges occurring on or after April 1,  1984,
          be refunded.

          In its appeal, the owner contends, among other things,  that  the
          rent for the subject apartment is below the average  rent  for  a
          similar apartment in the building and below the average rent  for
          the building, that there is no overcharge and that  the  rent  is
          below the permissible legal rent.  The owner further asserts that 
          the lease of the previous tenant was submitted and that the  rent
          being charged was justified by previously submitted documents and 
          therefore seeks to reverse the Administrator's order.

          The tenant disputes that the previous tenant's rent as alleged by 
          the owner is accurate and questions the authenticity of the lease 
          submitted.   The  tenant  further  questions  the  value  of  the
          averages presented by the owner and states the rent she is paying 
          is the highest in the building for a four  room  apartment.   The
          tenant states also that the $8.00 fuel surcharge first  collected
          in February 1981  has  not  been  removed  from  the  rent  being

          The Commissioner is of the opinion that this petition  should  be

          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

          BC 410524 RO
          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 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.

          Since the owner had submitted rent records from April 1, 1980  to
          the Administrator, the Commissioner finds that the  Administrator
          erred in finding that the owner defaulted on  his  obligation  to
          submit  a  rent  history  for  four  years.    Accordingly,   the
          implementation of the 42A default method was not warranted.

          The  Commissioner  finds  that  the  tenant  has   submitted   no
          documentation to sustain the allegations made in response to  the
          appeal.  The  record  indicates  that  the  approved  $8.00  fuel
          surcharge first collected February 1, 1981 was not  collected  in
          subsequent lease terms.  The Commissioner further determines that 
          the rent being charged is  the  lawful  rent  and  there  are  no

          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 shall  be  permitted  to  pay  off  the
          arrears in twelve equal monthly installments.  Should the  tenant
          vacate after the issuance of this order, or have already vacated, 
          said arrears shall be payable immediately.

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

          BC 410524 RO

          ORDERED, that this petition be, and the same hereby  is,  granted
          and that the District Rent Administrator's order be, and the same 
          hereby is, reversed.

                                                  ELLIOT SANDER
                                                  Deputy Commissioner

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