BG 110347 RO; BH 110284 RO

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

          APPEAL OF                              DOCKET NO. BG 110347 RO;
                                                            BH 110284 RO

                                              :  DISTRICT RENT OFFICE
               Saunders Street Associates,       DOCKET NO. TC 81163 G
                         and                                CDR 30,852
               Imperial Sterling Ltd,
                                                 TENANT: Herman and Mildred   
                                PETITIONER    : 


          On July 30, 1987 and August 11, 1987, the above-named petitioner- 
          owner and prior owner filed Petitions for Administrative Review 
          against an order issued on July 13, 1987, by the Rent Administrator,  
          10 Columbus Circle, concerning the housing accommodations known as  
          63-45 Saunders Street, Queens, New York Apartment No. 2F wherein the 
          Rent Administrator determined that the owner had overcharged the 

          These petitions are being consolidated for disposition herein.

          The Administrative Appeals are 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 
          issue raised by the administrative appeal.  

          This proceeding was originally commenced by the filing in January 
          1984 of a rent overcharge complaint by the tenant.

          In answer to the tenant's complaint, the owner stated in substance 
          that the apartment rent ledgers and leases from April 1975 through 
          July 1978 were not available and submitted a rental history from    
          July 1, 1968 through March 31, 1975 and August 1, 1978 through 
          January 31, 1986.

          In Order Number 30,852 as amended, the Rent Administrator determined 
          that, due to the owner's failure to submit a complete rental 
          history, the tenant had been overcharged in the amount of $10,069.96
          and directed the owner to refund such overcharge to the tenant as 
          well as to reduce the rent.

          BG 110347 RO; BH 110284 RO

          In these petitions, the owners contend in substance that they did 
          not default as they submitted all the rent records they had.  The 
          owners submitted rent ledgers from September, 1976 through June, 
          1978 which were not submitted during the proceeding before the Rent 

          In answer to the owners' petitions, the tenant stated in substance 
          that the Rent Administrator's order was warranted and questioned why 
          the ledgers which the owner stated were unavailable during 
          processing are now being submitted.

          The Commissioner is of the opinion that this petition 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 subject 
          to rent stabilization, if later) and to produce such records to the 
          DHCR upon demand.

          Section 26-516 of the 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 to 
          produce rent records for more than four (4) 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 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 rights 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 the 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).

          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 Dept., 
          1989). motion for leave to reargue or for leave to appeal to the 
          Court of Appeals denied ( App. Div. 2d Dept., 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 

          BG 110347 RO; BH 110284 RO

          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 four 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 Dept. 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.  An examination 
          of the rent records from April 1, 1980 which records were submitted 
          during the course of the proceeding before the Rent Administrator, 
          discloses that no rent overcharge occurred.  Therefore, the Rent 
          Administrator's order finding a rent overcharge must be revoked.

          If the owner has already complied with the Rent Administrator's 
          order and there are arrears due to the owner as a result of the 
          instant determination, the tenant is permitted to pay off the 
          arrears in 24 equal monthly installments.  Should the tenant vacate 
          after the issuance of this order or have already vacated, said 
          arrears shall be payable immediately.

          THEREFORE, in accordance with the Appellate Division ruling in JRD, 
          it is

          ORDERED, that these petitions for administrative review be, and the 
          same hereby are granted, that the order of the Rent Administrator 
          be, and the same hereby is, revoked, and it is found that no rent 
          overcharge occurred.


                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner


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