BG 210289 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 210289 RO


                      WOODLAND REALTY            DRO DOCKET NO.: K 3107015 R
                            C/O
                      ABRAM LANDAV,              TENANTS: ROBERT &  PATRICIA
                                                          WALTERS-HITSOUS
                                   PETITIONER    
          ------------------------------------X 


            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW


          On June 29, 1987, the above-named  owner  filed  a  Petition  for
          Administrative Review of an order issued on May 26, 1987  by  the
          Rent Administrator concerning the housing accommodations known as 
          2775 East 16th Street,  Brooklyn,  New  York,  Apartment  No.  4K
          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  on  March
          30, 1984 of a rent overcharge complaint by the tenant.

          In answer to the tenant's complaint,  the  owner  submitted  rent
          records dating back to at least April 1, 1980.

          In Order Number K 3107015-R, 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  $3,798.88,
          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 acquired ownership of the building on January 8, 
          1980 and was not furnished a rental history from the prior owner.







          BG 210289 RO
          The Commissioner is of the opinion that this petition  should  be
          granted.
               
          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 210289 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
          have defaulted.

          Furthermore, for the period April 1, 1980 through  May  31,  1987
          used in the Admiistrator's calculations,  there  is  no  evidence
          that the tennant 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 
          immediately.

          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.

          ISSUED



                                                                      
                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner




                     



    

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