BG 210102 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
------------------------------------X
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO. BG 210102 RO
: DRO DOCKET NO.K-3104290-R
P. & J. HIRTH TENANT: MARIA MARKHAM
PETITIONER :
------------------------------------X
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On July 1, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on June
1, 1987, by the Rent Administrator, 10 Columbus Circle, New York,
New York, concerning the housing accommodations known as 876 Coney
Island Avenue, Brooklyn, New York, Apartment No. 3C, 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 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
the tenant stated that she first moved to the subject apartment on
December 1, 1983 at a rental of $340.00 per month. The tenant
submitted copies of the prior tenant's last lease and some
cancelled rent checks from the prior tenant showing the prior
tenant paid a rent of $198.41 per month immediately before the
prior tenant vacated the subject apartment.
The owner was served with a copy of the complaint and was
requested to submit rent records from the base date to prove the
lawfulness of the rent being charged. In answer to the complaint,
the owner stated that the subject premises had been renovated
under the Private Housing Finance Law and that the rent was set at
$340.00 per month effective July 1, 1984 by an order issued by the
New York City Department of Housing Preservation and Development
hereafter HPD. A copy of the HPD order was submitted by the
owner. The owner was again directed to submit a complete rental
history, but failed to do so. The record reveals that the tenant
herein subsequently vacated the subject apartment.
BG 210102 RO
In Order Number CDR 30,447, 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 $1135.91
from December 1, 1983 until July 1, 1984 when HPD set the rent at
$340.00 per month. The Rent Administrator established the rent
from December 1, 1983 until July 1, 1984 as $198.41 per month -
the last rent paid by the prior tenant.
In this petition, the owner contends in substance that the
renovation of the subject apartment was completed prior to
occupancy by the tenant herein, that the owner should not be
penalized by HPD's delay in issuing its order establishing the
rent due to the renovation so that the lawful stabilized rent
should be held to have been $340.00 effective December 1, 1983, or
that in the alternative, the December 1, 1983 to July 1, 1984
lawful stabilized rent should be established at $232.19 per month
( a 17% increase over the prior tenant's last rent of $198.41 due
to a vacancy and guideline allowance pursuant to Guideline 15).
The Commissioner is of the opinion that this petition should
be denied.
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
BG 210102 RO
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 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 records in this case discloses that
the owner did not provide a rental history from April 1, 1980 as
required. Accordingly, the Rent Administrator properly defaulted
the owner for the period from December 1, 1983 to July 1, 1984
when HPD established the rent at $340.00 per month due to the
renovation of the subject premises. The Rent Administrator
correctly established the rent during this period in accordance
with DHCR default procedures as $198.41 - the last rent of the
prior tenant. No allowance may be given for the complaining
tenant's vacancy lease due to the owner's default. With regard to
the owner's contention that the rent set by HPD effective July 1,
1984 should be retroactive to December 1, 1983, it is noted that
HPD's order clearly sets the rent at $340.00 per month effective
July 1, 1984 and that the DHCR is not authorized to make the HPD
order retroactive in effect. If the owner disagreed with the
effective date of the HPD order, its remedy was to appeal said
order and not to unilaterally charge the tenant a higher rent
prior to the effective date of the order. Therefore, the Rent
Administrator's order was warranted.
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.
BG 210102 RO
THEREFORE, in accordance with the provisions of the Rent
Stabilization Law and Code, it is
ORDERED, that this petition for administrative review be, and
the same hereby is, denied, and, that the order of the Rent
Administrator be, and the same hereby is, affirmed. The amount of
the rent overcharge is $1135.91.
ISSUED
ELLIOT SANDER
Deputy Commissioner
|
