BG 110366 RO
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.: BG 110366 RO
DRO DOCKET NO.: TC 081595 G
TENANT: WILLIAM FERGUNSON
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On July 22, 1987, the above-named owner filed a Petition for
Administrative Review of an order issued on July 2, 1987 by the
Rent Administrator concerning the housing accommodations known as
37-18 72nd Street, Jackson Heights, New York, Apartment No. A3
wherein the Rent 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 issue raised by the administrative appeal.
This proceeding was originally commenced by the filing on
December 10, 1983 of a rent overcharge complaint by the tenant.
In answer to the tenant's complaint, the owner submitted a rental
history dating back to at least April 1, 1980.
In Order Number TC 081595-G, the Rent Administrator determined
that, due to the owner's failure to submit a complete rental
history, the lawful stabilization rent was based on the Section
42A default procedure, effecting a rent overcharge of $4,644.00
including excess security and interest on that portion of the
overcharge occurring on and after April 1, 1984.
In this petition, the owner contends in substance that, among
other things, it did not default as it personally delivered to
the Division the requisite rental history.
BG 110366 RO
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 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).
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
BG 110366 RO
such requirement is both rational and supported by the law and
legislative history of the Omnibus Housing Act.
Given that, 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. Since, in the instant case, the record contains a rental
history going back to April 1, 1980, the owner cannot be held to
Furthermore, for the period April 1, 1980 through May 31, 1986
used in the Administrator's calculations, there is no evidence
that the tenant paid any excess in rents lawfully allowed under
the applicable rent guidelines.
Therefore, the Administrator's order finding a rent overcharge
must be revoked.
If the owner has already complied with the District Rent
Administrator's order and there are arrears due to the owner as a
result of the instant determination, the tenant shall be
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
THEREFORE, in accordance with the Appellate Division ruling in
JRD, it is
ORDERED, that this petition for administrative review be, and
the same hereby is, 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