DOCKET NUMBER: BD 210237-RO & BD 210152-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
------------------------------------X
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BD 210237-RO
: BD 210152-RO
DRO DOCKET NO.: K 3106947-R
SHORETOWN MANAGEMENT,
PETITIONER :
------------------------------------X
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On April 15, 1987 the above named petitioner-owner filed a petition for
administrative review against an order issued on March 16, 1987 by an
administrator concerning the housing accommodation known as 8701 Shore
Road, Apartment Number 333, Brooklyn, New York wherein the Administrator
determined that the tenant had been overcharged in the amount of
$3,997.72 including interest on those overcharges collected on or after
April 1, 1984.
The owner's petition was erroneously assigned two docket numbers which are
consolidated herein for disposition.
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.
This proceeding was commenced on March 30, 1984 when the tenants filed a
complaint in which they claimed they had not received an accounting of
their apartment's (number 333) prior rental history pursuant to section
42A of the former rent stabilization code.
The owner was served with a copy of the complaint on October 26, 1984 and
was requested to submit complete copies of all leases or rent records from
the Base Rent Date to the date the complaining tenants took occupancy.
In answer to the complaint, the owner indicated that the base rent date
for the subject apartment is February 1, 1979. Copies of leases and
renewals for the period from February 1, 1979 through January 31, 1986
were submitted.
On June 16, 1986, the owner was asked to submit a copy of a DC-2 notice or
a copy of the landlord's report of statutory decontrol to establish the
date the apartment became vacancy decontrolled. The owner responded that
it was a new owner and did not have a DC-2 notice but enclosed a copy of a
CAB opinion (T/A 10285) issued October 13, 1983 determining a fair market
rent appeal filed by the tenant of apartment 633 and establishing the
adjusted legal regulated rent at $421.29 effective June 5, 1980. The
Administrator determined that the owner had failed to provide a complete
DOCKET NUMBER: BD 210237-RO & BD 210152-RO
rental history and established the lawful stabilized rent by using the
prior rent charged on February 1, 1979 of $350.00 minus a guideline
increase of 6.5% and vacancy allowance of 5% for a base rent of $313.90.
In the petition for Administrative Review the owner asserts that it had
filed a timely answer to the tenant's complaint in which it conceded that
it did not have a copy of the DC-2 notice and requested that the rent for
the subject apartment be determined based on comparability data as it had
been by the CAB for another apartment in the same line. The rent for that
apartment had been established using a comparable rent in the "27" line
because all the apartments in the "33" line were rent controlled on June
30, 1974.
In answer to the petition, the tenant contends that the prior occupants of
their apartment were stabilized and were paying less than $350.00 per
month and that other apartments in the "33" line were decontrolled when
the tenants took occupancy in February 1979.
After a careful consideration of the evidence of record, the Commissioner
is of the opinion that the owner's 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 (ro the date the apartment became subject to rent stabilization,
if later) to date and to produce such records to t he DHCR upon demand.
Section 25-216 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 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, 537 N.Y.S.2d 667 (App. Div. 2d Dep't 1989), motion of
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
DOCKET NUMBER: BD 210237-RO & BD 210152-RO
(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.
In the instant case, the complaining tenant took occupancy in 1979 and a
review of the rents they paid during their initial lease and in subsequent
renewals reveals that there was no overcharge.
Accordingly, the Administrator's order should be revoked and if the owner
has already complied with the directive to refund the tenants should be
afforded twelve months to pay off the arrears that are now due.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this petition be and the same hereby is granted and the
District Rent Administrator's order be and the same hereby is revoked.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
|
