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




          ----------------------------------X
          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
          ----------------------------------X


            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:

                                                  ------------------------
                                                  ELLIOT SANDER
                                                  Deputy Commissioner
           
             
    

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