BC 410524 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
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IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BC 410524 RO
8410-16, 21ST AVENUE, INC., OWNER,
DRO DOCKET NO.: TC 076269-G
TENANT: GLADYS MCCABE
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
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
overcharge.
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
apartment.
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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
collected.
The Commissioner is of the opinion that this petition should be
granted.
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
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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
overcharges.
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
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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.
ISSUED:
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ELLIOT SANDER
Deputy Commissioner
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