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.: BF 210087-RO
J.R.D. Management Corp., DISTRICT RENT ADMINISTRATOR
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On June 10, 1987 the above named petitioner-owner filed a
Petition for Administrative Review against an order issued on May
6, 1987 by the District Rent Administrator, 10 Columbus Circle,
New York, New York concerning housing accommodations known as
Apartment 6G at 2701 Newkirk Avenue, 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 current Rent
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 July 1, 1979 at a rent
of $197.20 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 a rental history from 1979.
In an order issued on May 6, 1987 the District Rent
Administrator, using DHCR default procedures, determined that the
tenant had been overcharged in the amount of $2,379.60 as of
June 30, 1985 and directed the owner to refund such overcharge to
the tenant as well as to reduce the rent.
In this petition, the owner contends in substance that it
submitted all the leases which it received when purchasing the
subject building in 1980, and that it should not have to provide
leases for more than four years prior to 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 that 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 1985, 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 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.
Because the owner provided the Administrator with rent records
from 1979, the Commissioner has made use of such records to
calculate the lawful stabilization rents and the amount of
overcharge. They are set forth on an amended rent calculation
chart attached hereto and made a part hereof. The overcharge
occurred because the owner took a Guideline 12 increase over an
M.C.I. increase effective April 2, 1981, even though such M.C.I.
increase also occurred in Guideline Period 12.
The Commissioner notes that the tenant apparently vacated by
April, 1986 and that the 1990 registration listed the subject
apartment as being exempt from rent regulations by virtue of
co-op or condo conversion.
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 for the period
through June 30, 1985, including interest through May 31, 1987 on
that overcharge, is $2.76.
JOSEPH A. D'AGOSTA