BD 210158 RO

                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                              DOCKET NO.:  BD 210158 RO

                   PAMON ENTERPRISES,            
                                                 DRO DOCKET NO.:  67910


          On April 13, 1987, the above-named petitioner-owner filed a 
          Petition for Administrative Review against an order issued on      
          March 12, 1987, by the Rent Administrator, concerning the housing 
          accommodations known as 228 East 38th Street, Brooklyn, New York, 
          Apartment No. D4 wherein the Rent Administrator determined that the 
          owner had overcharged the tenant.

          The Administrative Appeal is being determined pursuant to the 
          provisions of Section 2526.1 of the Rent Stabilization Code.

          The issue herein is whether the Rent Administrator's order was 

          It is noted that the file of the underlying proceeding was lost, 
          and has been reconstructed from submissions from the owner and the 

          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 originally commenced by the filing of a rent 
          overcharge complaint by the tenant.  The tenant stated, in part, 
          that she objected to the addition of a vacancy allowance when she 
          obtained a lease in her own name because she had only come to live 
          in the apartment to care for her siblings after her mother's 
          departure.  The prior lease, under her mother's name, expired in 
          January, 1981, but the tenant did not sign her own lease until 
          March, 1982.  The current owner acquired the building in May, 1982.

          In the order appealed herein, dated March 12, 1987, the Rent 
          Administrator determined that, due to the owner's failure to submit 
          a complete rental history, the tenant had been overcharged in the 
          amount of $12,741.78, including treble damages and directed the 
          owner to refund such overcharge to the tenant as well as to reduce 
          the rent.  The order also stated that the owner had failed to 
          register the rent for the apartment.

          BD 210158 RO

          In this petition, the owner contends in substance that it did not 
          default as it submitted all the rent records it had; by statute it 
          should not be required to submit rent records prior to April 1, 
          1980, and that the owner had complied with all registration 
          requirements.  In addition, the owner denies that minor children 
          resided with the tenant's mother.

          In her answer the tenant maintains that she moved into the 
          apartment when her mother went to the West Indies to care for her 
          husband.  The tenant states that there was a "judgment" against her 
          mother when the lease expired in January 1982 but that she 
          "settled" with the prior landlord for a lease in her own name in 
          March, 1982.

          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) 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 to 
          produce rent records for more than four (4) 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 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, 

          BD 210158 RO

          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.  An examination 
          of the rent records from April 1, 1980 establishes a base rent of 
          $270.00 for the prior tenant, who is the complainant's mother.  The 
          subsequent renewal lease for one year, commencing on February 1, 
          1981, lawfully increased the rent to $299.70 (Guidelines 12 
          increase of 11% for 1 year:  $270.00 + 11% = $299.70).  
          Subsequently in March, 1982 the owner issued a vacancy lease to the 
          complainant, which included a vacancy allowance.

          Although the complainant argues that as a resident in her mother's 
          apartment she should not have been charged a vacancy allowance when 
          she was given a lease in her own name, the Rent Stabilization Code 
          upholds the owner's actions in this regard.  Section 2523.5(b) of 
          the Code provides, inter alia, that a member of the tenant's family 
          who has resided with the tenant in the housing accommodation as 
          their primary residence for a period of two years immediately prior 
          to the permanent vacating of the housing accommodation by the 
          tenant is entitled to be named as a tenant on the renewal lease.  
          In the instant case, however, the complainant offers no evidence to 
          establish if or for how long she lived in the subject apartment 
          prior to her mother's departure, but states that she only moved in 
          in order to care for her younger siblings because her mother had to 
          leave.  Since the record does not establish this as a period of at 
          least two years, and the complainant has not submitted proof 
          establishing that her siblings lived in the subject apartment prior 
          to her mother's departure nor stated that she wanted a renewal 
          lease only as guardian for her siblings, the charging of the 
          vacancy allowance is proper.  A calculation of the lawful rent for 
          the complainant's tenancy indicates that there was no overcharge:  
          Guideline 13:  September 30, 1981 rent of $299.70 + 16% for a 3 
          year lease + 15% vacancy allowance = $392.00, for the tenant's 
          March 1, 1982 to February 28, 1985 lease term; Guidelines 16:  
          September 30, 1984 rent of $392.00 + 9% for a 2 year lease = 
          $427.00, for the tenants' March 1, 1985 to February 28, 1987 lease 
          term.  Finally, an examination of the DHCR's records indicates that 
          the owner has been in compliance with registration requirements.

          If the owner has already complied with the District Rent 

          BD 210158 RO

          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 twenty four equal monthly installments 
          beginning with the first rent payment date after issuance of this 
          order and opinion.  Should the tenant vacate after the issuance of 
          this order or have already vacated, said arrears shall be payable 

          THEREFORE, in accordance with the Appellate Division ruling in JRD, 
          it is

          ORDERED, that this petition for administrative review be, and the 
          same hereby is, granted, that the order of the Rent Administrator 
          be, and the same hereby is, revoked, and it is found that no rent 
          overcharge occurred.


                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner



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