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STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BE 210169 RO
KINGS ROOSEVELT COMPANY,
DRO DOCKET NO.: K 3106420 R
PETITIONER TENANT: ABRAHAM TIER
ORDER AND OPINION GRANTING IN PART PETITION
On May 8, 1987, the above-named petitioner-owner filed a Petition
for Administrative Review against an order issued on April 3, 1987,
by the Rent Administrator, 10 Columbus Circle, New York, New York,
concerning the housing accommodation known as Apartment mD, 9040
Fort Hamilton Parkway, Brooklyn, New York, wherein the
Administrator determined that the owner had overcharged the tenant.
The Administrative Appeal is being determined pursuant to the
provisions of Section 2526.1 of the Rent Stabilization Code.
The issue herein is whether the Rent Administrator's order was
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 on March 31,
1984 of a rent overcharge complaint.
In Order Number CPR 29,825, the Administrator determined that, due
to the owner's failure to submit a complete rental history, the
tenant had been overcharged in the amount of $4,098.13 and directed
the owner to refund such overcharge to the tenant as well as to
reduce the rent.
In this petition, the owner requests that the Administrator's order
be reversed. The owner asserts that the Administrator erred in the
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application of Rent Guideline Order Number 12 by permitting only a
5% vacancy allowance instead of a 10% vacancy allowance. In
addition, the owner asserts that the Administrator confused the
subject apartment to which the docket number was assigned. The
owner further asserts that it was not given ample opportunity to
The tenant was served with a copy of the petition but has failed to
interpose an answer.
The Commissioner is of the opinion that this petition should be
granted in part.
A review of the records reveals two complaint forms within the
file, one for the subject apartment, apartment 3M, and the other
one for apartment 1K. The owner provided a rental history for
apartment number 3M only from 1977.
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).
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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. Accordingly,
Section 42A default procedures should not have been applied.
A review of the lease history since April 1, 1980 establishes,
however, that an overcharge arising out of incorrect collection of
a ten percent vacancy increase instead of a five percent vacancy
increase was collected. Under Rent Guidelines Board Order Number
12, the owner was entitled to either a 5% or 10% vacancy increase,
depending on whether there had been a charge in tenancy since July
1, 1975. The owner herein has not established its entitlement to
a 10% vacancy increase. Although the owner is not required to
submit a rental history prior to April 1, 1980 pursuant to JRD, it
is required to submit such rental history to prove entitlement to
a larger vacancy increase under Guideline 12. Accordingly,
pursuant to Rent Guidelines Board Order number 12, the owner was
entitled to only a 5% vacancy increase. The Commissioner has, in
the rent calculation chart attached hereto and fully made a part of
this order, recalculated the lawful stabilization rent at $403.34
as of November 1, 1984 through October 31, 1986 and amended the
refund due to the tenant to $1,250.28 inclusive of excess security
and interest on the overcharge collected on or after April 1, 1984.
Because this determination concerns lawful rents only through
October 31, 1986, the owner is cautioned to adjust subsequent rents
to an amount no greater than that determined by the Rent
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Administrator's order plus any lawful increases.
This order may, upon the expiration of the period in which the
owner may institute a proceeding pursuant to Article Seventy-Eight
of the Civil Practice Law and Rules, be filed and enforced by the
tenant in the same manner as a judgment or not in excess of twenty
percent thereof per month may be offset against any rent thereafter
due the owner.
THEREFORE, in accordance with the Appellate Division determination
in JRD, it is
ORDERED, that this petition be, and the same hereby is, granted in
part and the Rent Administrator's order be, and the same hereby is
modified in accordance with this order and opinion.
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner