ADM. REVIEW DOCKET NO.: BE 110399 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 : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BE 110399 RO
D.R.O. DOCKET NO.:
: TC 80750-G
CRYSTAL APARTMENTS, Tenant: Annette Thomas
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART, AND REMANDING PROCEEDING TO THE DISTRICT RENT
ADMINISTRATOR
On May 1, 1987, the above-named petitioner-owner timely
refiled a Petition for Administrative Review of an order issued on
August 27, 1986, by the District Rent Administrator, 10 Columbus
Circle, New York, New York, concerning housing accommodations
known as Apartment 4-N, 91-30 191st Street, Hollis, New York,
wherein the District Rent Administrator determined that the
tenant had been overcharged.
The Commissioner has reviewed all of the evidence in the
record and has carefully considered that portion of the record
relevant to the issues raised by the administrative appeal.
This proceeding was originally commenced by the filing of a
rent overcharge complaint by the tenant with the New York City
Conciliation and Appeals Board, one of the predecessor agencies to
the DHCR. The tenant took occupancy pursuant to a lease
commencing September 15, 1982 and expiring September 30, 1984 at a
monthly rent of $316.00.
The owner's then managing agent was served with a copy of the
complaint and was requested to submit rent records to prove the
lawfulness of the rent being charged, but did not respond. On
April 21, 1986 a Final Notice of Pending Default was sent to the
same agent. Neither the owner nor that agent responded.
In Order Number CDR 21,340, the District Rent Administrator
established the lawful stabilized rent at $183.92 effective
September 15, 1982 through August 31, 1986, due to the owner's
failure to submit a complete rental history, found a rent
overcharge of $14,071.80, including excess security and treble
damages on that portion of the overcharge occurring on and after
April 1, 1984, and directed the owner to refund such overcharge to
the tenant.
ADM. REVIEW DOCKET NO.: BE 110399 RO
In this petition, the owner, by its current managing agent,
contends that the District Rent Administrator had sent notices in
this case to the prior managing agent, and thus it was unable to
answer. The owner states that it is enclosing all leases and
lease renewals to date. The owner encloses leases for the subject
premises from July, 1981 through September, 1986. The owner
additionally contends that all increases are in accordance with
rent stabilization guidelines.
The Commissioner is of the opinion that this petition should
be granted in part.
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,
ADM. REVIEW DOCKET NO.: BE 110399 RO
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.
DHCR registration records indicate that a change of managing
agents took place in 1985. An examination of the record
discloses that the Final Notice was sent to the prior managing
agent in 1986, although the Division was on notice of the change
in managing agents. Therefore, service of that notice was
inadequate, as it did not provide the owner with either notice or
an opportunity to submit the required rental information. The
proceeding is therefore remanded to the Administrator to afford
the owner, through its current managing agent, an opportunity to
submit rent records for the subject apartment from April 1, 1980.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that this petition be and the same hereby is
granted to the extent of remanding this proceeding to the District
Rent Administrator for further processing in accordance with this
order and opinion. The automatic stay of so much of the District
Rent Administrator's order as directed a refund is hereby
continued until a new order is issued upon remand. However, the
Administrator's determination as to the rent is not stayed and
shall remain in effect, except for any adjustments pursuant to
lease renewals, until the Administrator issues a new Order upon
remand.
ISSUED:
ADM. REVIEW DOCKET NO.: BE 110399 RO
ELLIOT SANDER
Deputy Commissioner
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