BE 410131 RO

                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET 
                               JAMAICA, NEW YORK 11433

          APPEALS     OF                                  DOCKET      NOS.:
                                                  BE 410131 RO
                                                  BE 410255-RO
               HARLINGTON REALTY CORP.,           D.R.O. DOCKET NOS.:
                                                  L 3115534 R;  41424
                                   PETITIONER     TENANT:  Denise Puricelli


          On May 21 and May 22,  1987,  the  above  named  petitioner-owner
          filed Petitions for Administrative Review against  orders  issued
          on April 16 and April 17, 1987 respectively, by the District Rent 
          Administrator located at Gertz Plaza,  Jamaica,  New  York,  con-
          cerning housing accommodations known as 248  West  105th  Street,
          New York, New  York,  apartment  2D,  wherein  the  Administrator
          determined that the tenant had been overcharged.

          The proceedings have  been  consolidated  for  purposes  of  this

          The issue on appeal is whether the  Administrator's  orders  were

          The Commissioner notes that this proceeding was  initiated  prior
          to April 1, 1984.  Sections 2526.1(a)(4)  and  2521.1(d)  of  the
          Rent Stabilization Code (effective May 1,  1987)  governing  rent
          overcharge and fair market rent proceedings provide that deter-
          mination of these matters be based upon the law  or  code  provi-
          sions in effect on March 31, 1984.  Therefore,  unless  otherwise
          indicated, reference to Sections of the Rent  Stabilization  Code
          (Code) contained herein are to the Code in effect  on  April  30,

          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.

          This proceeding was originally commenced by the filing of a  rent
          overcharge complaint by the tenant with the New York City Concil 
          iation and Appeals Board, one of the predecessor agencies to the 
          Division of Housing and Community  Renewal  (DHCR).   The  tenant
          took occupancy pursuant to a lease  commencing  January  1,  1982
          and expiring December 31, 1982 at a monthly rent of $586.05.

          During the pendency  of  the  initial  overcharge  complaint,  on

          BE 410131 RO
          January 10, 1985, the tenant  filed  an  objection  to  the  1984
          rent/services registration, Docket No. 41424,  stating  that  the
          rent paid on April 1, 1984 was an overcharge.  By order issued on 
          April 17, 1987, the Administrator determined that  the  objection
          was a duplicate of the overcharge complaint assigned  Docket  No.
          L-3115534-R,  terminated  the  objection,  and  consolidated  the
          proceedings under Docket No. L-3115534-R.

          By order issued on April 16, 1987 under Docket No.  L  3115534-R,
          utilizing the Section 42-A default procedure, the  District  Rent
          Administrator determined that the tenant had been  overcharged  a
          total of $51,634.72,  including  treble  damages  on  overcharges
          collected on or after April 1, 1984; established the legal  regu-
          lated rent as of January 1, 1986 through  December  31,  1987  at
          $277.96, and directed a refund to the tenant of the  overcharges.

          In its petition under Docket No. BE 410255-RO, challenging Docket 
          No. 41424, the owner  alleges  that  the  order  terminating  the
          objection and consolidating the proceedings was inappropriate, as 
          the objection requested a fair market rent appeal, in addition to 
          a complaint of overcharge.  The owner  further  alleges  that  it
          timely served an answer to the objection on the  Division,  along
          with leases from 1980.

          In its petition under Docket No. BE 410131-RO, challenging Docket 
          No. L-3115534-R, the  owner  contends  that  the  Administrator's
          order should be revoked, alleging that the tenant's complaint was 
          never sent to it; that the  DHCR  is  unfairly  claiming  willful
          default, and that treble damages should not have  been  assessed.
          The owner further states that  it  is  not  required  to  provide
          records prior to 1981, four years prior  to  the  filing  of  the
          tenant's objection.  

          In answer, the tenant contends that the default order  should  be
          upheld because the petitioner has not shown it to  be  in  error,
          and that the owner still has not supplied  the  requisite  rental

          The Commissioner is of the opinion that these petitions should be 

          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  sub-
          ject 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 four years prior to  the  most
          recent registration, and concomitantly, established a  four  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

          BE 410131 RO
          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  four  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

          However, it has recently been held in the case of J.R.D. Mgmt. 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,  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  pro-
          duce more than four years of rent records.

          Since the issuance of the decision in JRD,  the  Appellate  Divi-
          sion, First Department, in the case  of  Lavanant  v.  DHCR,  148
          A.D.2d 185, 544 N.Y.S.2d 331 (App. Div.  1st  Dept'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 First Department, the Lavanant decision governs and  complete
          rent records from the date of decontrol were properly required.

          Concerning the allegation of the owner that the  complaint  under
          Docket No. L-3115534-R was never sent  to  it,  the  Commissioner
          finds that the record establishes that the complaint  was  served
          on the owner by mail on October 9, 1984; that the Final Notice of 
          Pending Default was served on June 24, 1986; that another copy of 
          the complaint, along with the appropriate answer forms was served 
          by mail on August 25, 1986, in response to the owner's attorney's 
          request of July 2, 1986.  By  letter  of  January  23,  1987  the
          owner's attorney indicated she had received no reply to her  July
          2, 1986 letter and again requested a copy of the complaint.  DHCR 

          BE 410131 RO
          did not respond to this letter.  However, the owner requested and 
          was granted an extension of time  to  respond  in  the  objection
          proceeding, until March 31, 1987.   The  owner  alleges  that  it
          submitted an answer on that date, but submits  no  proof  and  no
          copy of that answer.

          With regard to the owner's assertion that treble damages should
          not have been assessed, Section 2526.1(a)(1) of the current  Code
          provides that a landlord who has been found by  the  Division  to
          have collected rent overcharges shall be  liable  to  the  tenant
          for a penalty equal to three times the amount of such overcharge. 
          However, if the landlord establishes, by a preponderance  of  the
          evidence, that the overcharge was not willful, the penalty is  to
          be assessed at only the amount of the overcharge  plus  interest.
          The petitioner has  offered  no  evidence  that  the  overcharges
          herein were not willful.  Given that the owner failed to submit a 
          complete rental history to  the  Rent  Administrator,  the  owner
          could not justify the rent that it had charged the tenant. There 
          fore, the imposition of treble damages was proper.

          With regard to the contention of the  owner  that  the  order  of
          consolidation was inappropriate in that the  tenant  requested  a
          fair market rent appeal, Section 25 of the Code provides that a 

          fair market rent appeal application may be filed by the tenant of 
          an apartment which was subject to rent stabilization or rent 
          control prior to July 1, 1971 and was vacated between January  1,
          1974 and June 30, 1974, both dates inclusive, or of an  apartment
          which was subject to rent control on June 30,  1974  and  vacated

          Section 2522.3 of the current Rent Stabilization  Code  provides,
          in pertinent part, that an appeal of the Initial Legal Registered 
          Rent on the ground that it exceeds the fair market rent  for  the
          housing accommodation, may be filed by the tenant of an apartment 
          which was subject to the City Rent Law on December 31, 1973.

          DHCR records indicate that the subject apartment was decontrolled 
          in 1952.  The tenant therefore was not entitled to  file  a  fair
          market rent appeal.  The Commissioner finds, that the proceedings 
          were properly consolidated and processed  s  an  overcharge  com-

          For the reasons stated above, the Commissioner is of the  opinion
          that these petitions should be denied and that the  order  estab-
          lishing the legal stabilized rent on January 1, 1986 as  $277.96,
          utilizing the default  formula,  and  finding  an  overcharge  of
          $51,634.72, should be affirmed.

          This order may, upon the expiration of the period  in  which  the
          owner may institute a proceeding pursuant to Article  78  of  the
          Civil Practice Law and Rules, be filed and enforced as a judgment 
          or not in excess of twenty percent per month  f  the  rent  over-
          charge may be offset against any rent thereafter due the owner.

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

          BE 410131 RO

          ORDERED, that these  petitions  be,  and  the  same  hereby  are,
          denied,  and that the Administrator's orders  be,  and  the  same
          hereby are, affirmed.


                                                   ELLIOT SANDER
                                                   Deputy Commissioner


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