DOC. NO.: BD 210470-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 210470-RO
                      EAST REALTY,              :  RENT ADMINISTRATOR'S
                              PETITIONER        :  DOCKET NOS. TC 055980G
            ------------------------------------X             CDR 29,969
                                                   TENANT:  AARON SWAN


            On April 30, 1987, the above-named petitioner-owner filed a Petition 
            for Administrative Review against an order of the Rent Administrator 
            issued April 14, 1987.  The order concerned housing accommodations 
            known as Apt. 5A located at 360 Clinton Avenue, Brooklyn, New York.  
            The Administrator found that the owner had not submitted a complete 
            rental history and computed an overcharge at $2581.88 including 
            excess security.

            The Commissioner has reviewed the record and carefully considered 
            that portion relevant to the issues raised by this appeal.

            The tenant commenced this proceeding by filing a rent overcharge 
            complaint on August 17, 1981.  The tenant alleged he took occupancy 
            of the apartment on May 1, 1975, pursuant to a two year lease at a 
            rental of $230.00 per month.  The tenant stated that the owner had 
            refused to show him prior leases and that the owner repeatedly 
            revised rent increases after the first few payments of each lease 
            term, claiming he had made an error.

            The prior and current owner were served with copies of the 
            complaint along with a demand for copies of all leases or rent 
            records from the base date.

            In response, the owner stated that the apartment was decontrolled 
            in April 1973.  Copies of leases dating from May 1, 1975 were 
            submitted.  Based on the incomplete rental history the 
            Administrator adjudged a default and utilized procedures developed

            pursuant to Section 42A of the Rent Stabilization Code.  The 

          DOC. NO.: BD 210470-RO
            Administrator calculated a total overcharge of $1581.88 including 
            excess security.  The subject building was subsequently converted 
            to cooperative ownership and the tenant purchased his apartment 
            on January 5, 1984.

            On appeal, the current owner claimed that it bought the building 
            in 1981 and vigorously searched the records for additional rent 
            records.  It also requested that the prior owner conduct a further 
            search of its records.  These searches turned up additional 

            The owner contended that the additional information establishes 
            that the tenant was not overcharged.  In response to the petition, 
            the tenant questions what the rent controlled rent was, how the 
            first stabilized rent was computed and why the rent was increased 
            from $165 to $200 in September 1974.

            After a careful review of the evidence in the record the 
            Commissioner is of the opinion that the petition should be granted 
            pursuant to the decision of the Appellate Division in JRD Mgmt v. 

            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 

          DOC. NO.: BD 210470-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), in 
            cases involving rent overcharge complaints filed prior to April 1, 

            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.

            A review of the record reveals that the owner did submit a rental 
            history sufficient to satisfy the requirements of JRD and pursuant 
            to that rental history, the Administrator's finding of overcharge 
            must be revoked.  The tenant's  initial rent of $230.00 per month 
            effective May 1, 1975 was lawfully increased in accordance with 
            applicable guidelines increases for each subsequent renewal lease.

          DOC. NO.: BD 210470-RO
            If the current owner has already complied with the Administrator's 
            order and there are arrears due and owing to the owner as a result 
            of the present determination such arrears are payable immediately, 
            since the complainant has since purchased the apartment.

            THEREFORE, pursuant to the Rent Stabilization Law and Code, it is

            ORDERED, that this Petition be, and the same hereby is granted and 
            that the Rent Administrator's order be, and the same hereby is 

            ELLIOT SANDER
            Deputy Commissioner

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