DOC. NO.: BF 110157-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.: BF 110157-RO
             MYDAC REALTY,          :      D.R.O. DOC. NOS.:
                     PETITIONER     :      Q-3118732-R
------------------------------------X      CDR 29290
                                           AS AMENDED
                                           TENANT: PHILIP BROUILLET


      ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
                                 IN PART
                                    
On  June 19, 1987, the above-named petitioner-owner filed a Petition for
Administrative  Review against an order issued on May 15,  1987  by  the
District  Rent  Administrator, 10 Columbus Circle, New  York,  New  York
concerning  housing accommodations known as Apartment 2C at  94-25  57th
Avenue,  Elmhurst,  New  York  wherein the District  Rent  Administrator
determined that the tenant had been overcharged.

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

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 he stated that  he
had  commenced  occupancy on April 15, 1976 at a  rent  of  $240.00  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 claimed a base date of  April  1,
1984.

A  Final Notice of Pending Default, stating the default procedures  that
would  be used if a rental history from June 30, 1974 or a later, proven
base  date  was not submitted was sent to the prior owner  on  June  16,
1986.  It may not have been sent to the current owner.

In an order issued on March 6, 1987 the District Rent Administrator used
the  default  procedure to establish the lawful rents  and  to  find  an
overcharge of $3,483.58 from May 1, 1977 to April 30, 1984.  That  order
was  later  revoked, and an amended order was issued  on  May  15,  1987
finding  an  overcharge of $6,113.17 from April 12, 1976  to  April  30,
1987.

In  this  petition,  the  owner contends in substance  that  overcharges
should  be  apportioned between it and a prior owner.   In  answer,  the
tenant  asserts  in  substance that the owner  is  responsible  for  all
overcharges.

In  a  later supplement to its petition, the owner contends in substance
that as a result of a recent appellate court decision it is required  to
furnish  leases only from 1982, being 4 years before it was served  with
the  tenant's  complaint; and that it was ultra vires for  the  DHCR  to
adopt  a regulation providing that the previous Rent Stabilization  Code
be applied to overcharge complaints filed before April 1, 1984.

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, in the determination of 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, limiting the requirement
for  rent records to April 1, 1980.  The rent of $264.55 being  paid  by
the tenant on April 1, 1980 is therefore the base date rent.  The lawful
stabilization rents and the amount of overcharge are set  forth  on  the
rent calculation chart attached hereto and made a part hereof.  There is
an overcharge beginning May 1, 1984 because of the elimination of 3-year
leases by the Omnibus Housing Act of 1983 and the owner's provision of a
3-year  lease to the tenant despite the Act.  The Rent Guidelines  Board
issued Guideline 15, applicable to leases commencing between October  1,
1983  and  September 30, 1984, on June 29, 1983.  On June 30,  1983  the
Omnibus  Housing Act of 1983 was approved.  Section 48  of  the  Omnibus
Housing  Act  provided  that there would no  longer  be  3-year  leases.
Section  64  of  the Act made this provision applicable  to  leases  and
renewals  commencing  on and after October 1,  1983.   Even  though  the
tenant's renewal lease did not commence until May 1, 1984, and the owner
should  have been aware of the relevant provisions of such an  important
rent regulatory enactment as the Omnibus Housing Act of 1983, the owner

signed  a  3-year  lease with the tenant at the  10%  rate  of  increase
originally  provided for by the Rent Guidelines Board for 3-year  leases
before the Omnibus Housing Act eliminated such leases.  The owner should
have offered the tenant a one- or two-year lease at a 4% or 7% increase.
Because the owner could lawfully have charged no more than a 7% increase
for  a  (2-year) renewal lease commencing May 1, 1984, the  Commissioner
has calculated the lawful rent for the period from May 1, 1984, to April
30,  1987 as a 7% increase over the previous rent.  While it might  have
been possible for the lease to be altered to a 2-year lease from May  1,
1984  to  April 30, 1986 (at a 7% increase), and another  1-  or  2-year
lease  commencing May 1, 1986, this apparently was not done,  since  the
tenant's  response  dated April 17, 1986 (by which time  he  would  have
known  of  a new lease if one commenced on May 1, 1986) lists  a  3-year
lease at $369.42, and the owner's answer dated June 5, 1986 also lists a
rent of $369.42.

Because  this  order, similarly to the Administrator's  order,  concerns
lawful  rents and overcharges only through April 30, 1987, the owner  is
cautioned  to adjust the rent in leases after those considered  in  this
order to amounts no greater than that determined by this order plus  any
lawful  increases, and to register any adjusted rents  with  this  order
being given as the reason for the adjustment.

If  the  owner has already complied with the Administrator's  order  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 this Petition be, and the same hereby is granted  in  part
and that the District Rent Administrator's order be, and the same hereby
is,  modified  in  accordance with this Order and Opinion.   The  lawful
stabilization rents and the amount of overcharge are established on  the
attached  chart,  which is fully made a part of this order.   The  total
overcharge, including excess security of $10.07, is $424.48 as of  April
30, 1987.

ISSUED:

                                      ELLIOT SANDER
                                      Deputy Commissioner
                      ADMINISTRATIVE REVIEW BUREAU
                           COVERING MEMORANDUM
                                    
                                    
                                    
ARB Docket No.:             BF 110157-RO

DRO Docket No/Order No.:    Q-3118732-R; CDR 29290 as amended

Tenant(s):                  Philip Brouillet


Owner:                      Mydac Realty

Code Section:

Premises:                   94-25 57th Avenue, Elmhurst, New York
                            Apt. 2C

               Order and Opinion Granting Petition In Part
                                    
                                    
   JRD   eliminates  most  of  the  overcharge,  except  for  a  portion
   attributable  to  a 3-year lease in Guidelines Period  15  after  the
   Omnibus Housing Act of 1983 eliminated them.



APPROVED:



Processing Attorney:

Supervising Attorney:

Deputy Counsel:

Deputy Commissioner:

Mailed copies of Order and Determination to:
                 Tenant(s)
               Owner
               Tenant's Atty
               Owner's Atty


               Date:              :  by
                                        signature
    

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