ADM. REVIEW DOCKET NO.: BD 410554 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 410554 RO
          CHARLES GAYLE &                  :        
          WANDA   GAYLE,                       :        D.R.O.   DOCKET   NOS.:
                                                  K-3101791-R/T
                            PETITIONERS    :      CDR 29996 
       ------------------------------------X      TENANT: ELIZABETH CLAYTON

            ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
                                          
       On April 28, 1987 the above named petitioner-owners filed a Petition for 
       Administrative Review against an order issued on April 16, 1987  by  the
       District Rent Administrator, 10 Columbus  Circle,  New  York,  New  York
       concerning housing accommodations known as Apartment 5C at 156 East 54th 
       Street, Brooklyn, New  York  wherein  the  District  Rent  Administrator
       determined that the owner had overcharged the tenant.

       The issue in this appeal is whether the  District  Rent  Administrator's
       order was 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 appeal.

       This proceeding was originally commenced by the filing in March, 1984 of 
       a rent overcharge complaint by the tenant, in which she stated that  she
       had commenced occupancy on September 15, 1982 at a rent of  $350.00  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  evidence  of  decontrol
       in 1972, and stated that the prior tenant  had  commenced  occupancy  on
       January 1, 1982 at a rent of $282.00.         





       In an order issued on April 16, 1987 the  District  Rent  Administrator,
       using established DHCR default procedures, determined that the tenant 
       had been overcharged in the amount of $5,387.09 as of March 31, 1987, 
       and directed the owner to refund such overcharge to the tenant  as  well
       as to reduce the rent.  The order also directed the prior owner to  make
       refunds of those overcharges collected by it. 

       In this  petition,  the  owners  contend  in  substance  that  they  are






          ADM. REVIEW DOCKET NO.: BD 410554 RO
       enclosing all the documents which they were given by the prior  managing
       agent, and that the prior managing agent had no reason to cheat  anyone.
       With  their  petition  the  owners  have  enclosed  basically  the  same
       documents submitted earlier, with the earliest  stabilized  lease  still
       being the complainant's.

       The Commissioner is of the opinion that this petition should be  denied.

       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 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.






          ADM. REVIEW DOCKET NO.: BD 410554 RO

       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, limiting the  requirement
       for rent records to April 1, 1980.  However, the owners  have  submitted
       leases only from September 15, 1982, so they have still not  shown  that
       the tenant's  initial  rent  represented  a  lawful  increase  over  the
       (unknown) base date rent on April 1, 1980.   Even  if  the  undocumented
       claim of a rent of $282.00 in a lease commencing January 1, 1982 were to 
       be accepted, there would still not be a complete rental history from the 
       base date.  The Administrator was warranted in  using  established  DHCR
       procedures to establish the lawful rent where the owners  had  defaulted
       on their obligation to prove the lawfulness of the rents charged. 

       Because of the possibility that the rents charged were not reduced after 
       the Administrator's order, the owners are cautioned to adjust the  rent,
       in leases after those considered by the  Administrator,  to  amounts  no
       greater than that determined by the Administrator's order plus any 
       lawful  increases,  and  to  register  any  adjusted  rents   with   the
       Administrator's order being given as the reason for the adjustment.  




       Because of the possibility that the tenant herein may  have  vacated  by
       the time that this determination is issued, a copy of this determination 
       is being mailed to the tenant-in-occupancy. 

       THEREFORE, in accordance with the Rent Stabilization Law and Code, it is

       ORDERED, that this petition be, and the same hereby is, denied and  that
       the Rent Administrator's order be, and the  same  hereby  is,  affirmed.
       The lawful stabilization rent is $313.56 as of March 31, 1987. 

       ISSUED:





                                                                            
                                             ELLIOT SANDER
                                             Deputy Commissioner


        
    

TenantNet Home | TenantNet Forum | New York Tenant Information
DHCR Information | DHCR Decisions | Housing Court Decisions | New York Rent Laws
Disclaimer | Privacy Policy | Contact Us

Subscribe to our Mailing List!
Your Email      Full Name