BD 210517-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
APPEAL OF ADMINISTRATIVE REVIEW
DOCKET NO.: BD 210517-RO
(REFILING OF AI 110045-RO)
ARCO MANAGEMENT (OWNER), CF 110173-RT
AND
CARRIE WHITEHEAD (TENANT) DRO DOCKET NOS.: Q-3122554-R
CDR 21431; 20856
PETITIONERS
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
NO. BD 210517-RO, DENYING PETITION FOR ADMINISTRATIVE REVIEW
NO. CF 110173-RT AND MODIFYING ORDER IN DOCKET NO. Q-3122554-R
On April 14, 1987 the above named petitioner-owner perfected the
filing of a Petition for Administrative Review (Docket No. BD
210517-RO) against an order issued on August 21, 1986 by the
District Rent Administrator, 10 Columbus Circle, New York, New
York concerning housing accommodations known as Apartment 6R at
190-25 Woodhull Avenue, Hollis, New York wherein the District
Rent Administrator determined that the owner had overcharged the
tenant. (Another copy of that petition was assigned Docket No.
BD 110568-RO. That appeal was recently terminated as being a
duplicate of the petition considered herein.) On June 29, 1988
the above-named petitioner-tenant filed a Petition for
Administrative Review (Docket No. CF 110173-RT) against an order
issued on June 2, 1988 which found no overcharge.
As these appeals contain one or more common grounds of law or
fact, they are herein being merged and decided in one order and
opinion.
The issue in these appeals is whether the District Rent
Administrator's orders were warranted.
The applicable sections of the Law are Section 26-516 of the
Rent Stabilization Law and Section 2526.1(a) of the Rent
Stabilization Code.
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 appeals.
Docket No. Q-3122554-R was originally commenced by the filing in
March, 1984 of a rent overcharge complaint by the tenant, in
BD 210517-RO
which she stated that she had commenced occupancy on July 1, 1981
at a rent of $235.00 per month.
The owner was served with a copy of the complaint and was
requested to submit rent records to prove the lawfulness of the
rent being charged. In answer to the complaint, the owner
submitted leases only from 1981, stating that no other records
were available from the prior owner.
In Order Number CDR 21431 the District Rent Administrator,
utilizing the Division of Housing and Community Renewal's
(DHCR's) default procedures, determined that the tenant had been
overcharged in the amount of $2,727.16 as of June 30, 1985, and
directed the owner to refund such overcharge to the tenant as
well as to reduce the rent.
In its petition against that order, the owner has again submitted
leases from 1981. In a later submission the owner has submitted
a 1979 lease. In a supplement to its petition the owner asserts
in substance that an order in Docket No. 20856 has already
determined that there was no overcharge; that that order is res
judicata; that the rent charged was not unreasonably high; and
that it had completely complied with statutory requirements.
Docket No. 20856 was originally commenced by the filing in
August, 1984 of a Tenant's Objection to Rent/Services
Registration, in which the tenant asserted that she was being
overcharged, and that a stove and refrigerator had been omitted
from the registration. In answer, the owner submitted a rental
history from December 1, 1979.
In an order issued on June 2, 1988 the Administrator determined
that a stove and refrigerator should be included in the
registration, and that there had been no overcharge when the
lawful rents were calculated from a base date of April 1, 1980.
In her petition against that order, the tenant contends in
substance that it does not say that it supercedes the order in
Docket No. Q-3122554-R, which found an overcharge.
In answer, the owner asserts in substance that the registration
objection proceeding required rent records only from April 1,
1980, which it provided; that the DHCR should grant the appeal of
the order in Docket No. Q-3122554-R and find, consistent with
Docket No. 20856, that there was no overcharge, since the current
rent of $313.75 found to be lawful in that proceeding is not
unreasonably high and since the owner completely complied with
statutory requirements.
The Commissioner is of the opinion that the owner's petition in
Docket No. BD 210517-RO should be granted, that the tenant's
petition in Docket No. CF 110173-RT should be denied, and that
the order in Docket No. Q-312255-4-R should be modified.
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
BD 210517-RO
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
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, 1984.
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 present 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 in
BD 210517-RO
Docket No. Q-3122554-R, limiting the requirement for rent records
to April 1, 1980. At the time that an order was issued in that
case on August 21, 1986 the record contained leases only from
1981. In Docket No. 20856, a case initiated after April 1, 1984
and decided on June 2, 1988, leases were also required only from
April 1, 1980. In that case a rental history was submitted from
1979, so the Administrator was warranted in finding that the rent
laws had been complied with and that there was no overcharge.
Because the Administrator should have merged the pending cases in
Docket Nos. Q. . Q-3122554-R and 20856 [although he did not], the
Commissioner does not consider it appropriate to ignore the
rental history from 1979 submitted in Docket No. 20856 and to
thereby default the owner in Docket No. Q-3122554-R for not
submitting a rental history from April 1, 1980, since the rental
history submitted in Docket No. 20856 was sufficient even if that
case had been merged with the pre-April 1, 1984 case in Docket
No. Q-3122554-R. For these merged appeals the Commissioner has
set forth the lawful stabilization rents on a rent calculation
chart attached hereto and made a part hereof. The chart is
essentially a restatement of the chart contained in the order for
Docket No. Q-3122554-R. As can be seen, there has been no
overcharge as of June 30, 1988, the end of the month of the
Administrator's order in Docket No. 20856.
While the Administrator's order in Docket No. 20856 is being
upheld in this order, the Commissioner notes a typographical
error in it. The case was processed as Docket No. 20856, and
that number is indeed on pages 3 and 4 of the rent calculation
chart. Pages 1 and 2 incorrectly list the docket number as being
20855.
If the owner has already complied with the Administrator's order
in Docket No. Q-3122554-R and there are arrears due to the owner
as a result of the present determination, the owner is directed
to allow the tenant to pay off the arrears in twenty-four equal
monthly installments. Should the tenant vacate after the
issuance of this order, or have previously vacated, said arrears
shall be payable immediately.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that the owner's petition in Docket No. BD 210517-RO be,
and the same hereby is, granted; that the tenant's petition in
Docket No. CF 110173-RT be, and the same hereby is, denied; and
that the Administrator's order in Docket No. Q-3122554-R be, and
the same hereby is, modified in accordance with this Order and
Opinion. The lawful stabilization rents are established on the
attached chart, which is fully made a part of this order. The
lawful stabilization rent is $313.75 as of June 30, 1988.
ISSUED:
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ELLIOT SANDER
Deputy Commissioner
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