Docket Nos.: BG 410159-RT; BG 410282-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 NOS.: BG 410159-RT
                                                               BG 410282-RO
            VICTORIA MATHEWS, (TENANT) and 
            GENERAL REALTY GROUP OF               DRO DOCKET NOS.: L-3114575-R
            COMPANIES, INC.,  (OWNER)                              CDR 30569

                                PETITIONERS
          ----------------------------------X                                   

           ORDER AND OPINION GRANTING TENANT'S PETITION FOR ADMINISTRATIVE
            REVIEW AND DENYING OWNER'S PETITION FOR ADMINISTRATIVE REVIEW

          On July 16, 1987 and July 13,  1987  the  above-named  petitioners
          filed Petitions for Administrative Review against an order  issued
          on June 12, 1987 by the District Rent Administrator,  10  Columbus
          Circle, New York, New York concerning housing accommodations known 
          as Apartment F3 at 137  East  26th  Street,  New  York,  New  York
          wherein the District Rent Administrator determined that the  owner
          had overcharged the tenant.  The Administrator's order  named  the
          owner as "Central Realty Group Co., Inc." at 80 Fifth Avenue.  The 
          owner's attorney used this as the owner's  name  on  the  petition
          against the order.  However, the tenant's complaint,  the  owner's
          answers, an M.C.I. order,  the  tenant's  leases,  and  the  Final
          Notice of Pending Default all gave the  names  of  General  Realty
          Associates, General Realty Associates of Murray Hill,  or  General
          Realty Group of Companies, Inc. at 80  Fifth  Avenue.   The  1984,
          1985 and 1986 registrations  gave  the  owner  as  General  Realty
          Associates of Charles Street, c/o General  Realty  Associates,  80
          Fifth Avenue.  The registrations from 1987 through 1991  list  the
          owner as General Realty Associates of Murray Hill, and the manager 
          as General Realty Group of Companies, Inc., 80 Fifth Avenue.   The
          Administrator's order is  hereby  modified  to  name  the  latter,
          rather than "Central Realty  Group  Co.,  Inc.,"  as  owner.   The
          petitioner-owner's name is likewise altered.

          The Commissioner notes that this proceeding was initiated prior to 
          April 1, 1984.  Sections 2526.1(a)(4) and 2521.1(d)  of  the  Rent
          Stabilization  Code  (effective  May  1,  1987)   governing   rent
          overcharge  and  fair  market  rent   proceedings   provide   that
          determination of these matters be  based  upon  the  law  or  code
          provisions  in  effect  on  March  31,  1984.   Therefore,  unless
          otherwise  indicated,  reference   to   Sections   of   the   Rent
          Stabilization Code (Code) contained herein  are  to  the  Code  in
          effect on April 30, 1987.






          Docket Nos.: BG 410159-RT; BG 410282-RO

          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,  Section  2526.1(a)  of   the   current   Rent
          Stabilization  Code  and  Section   42A   of   the   former   Rent
          Stabilization Code.

          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
          February, 1984 of a rent overcharge complaint by  the  tenant,  in
          which she stated that she had commenced occupancy  on  January  1,
          1980 at a rent of $366.04 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 leases only from May 1, 1979, and a  November  13,  1978
          rent check and April 22, 1979 refrigerator and gas  range  invoice
          to Helmsley-Spear, Inc.  The invoice was not marked as  paid,  and
          the owner did not submit any proof of payment.  The  tenant  later
          submitted a 1978 rent roll.

          On July 8, 1986 the owner was  sent  a  Final  Notice  of  Pending
          Default, which stated in substance that unless  a  rental  history
          was submitted from June 30, 1974 or a  later,  proven  base  date,
          certain DHCR procedures would be  used  to  establish  the  lawful
          stabilization  rent,  and  treble  damages  would  be  imposed  on
          overcharges occurring after April 1, 1984 unless the  owner  could
          show that they were not willful.

          In an order issued on June 12, 1987  the  Administrator  used  the
          default procedure to set the tenant's lawful rent, and  determined
          an overcharge of $10,697.40 as of  December  31,  1985,  including
          interest on overcharges after April 1, 1984.

          In her  petition,  the  tenant  contends  in  substance  that  the
          overcharges were willful.

          The owner did not submit  an  answer  to  the  tenant's  petition,
          although given an opportunity to do so.

          In its petition, the owner asserts in substance that  the  Omnibus
          Housing Act of 1983 relieved it of any obligation to produce  rent
          records for any period prior to April 1, 1980;  that  the  current
          rents of other apartments in the subject building should have been 
          used in the comparability study; and  that  the  tenant's  initial
          rent was at or near the lawful rent.






          Docket Nos.: BG 410159-RT; BG 410282-RO

          In answer, the tenant contends in  substance  that  she  filed  an
          overcharge complaint prior to April 1, 1984,  not  a  registration
          objection after April 1, 1984;  that  the  owner's  obligation  to
          produce rent records is therefore not limited to four  years;  and
          that treble damages should be imposed.

          The tenant also refers to "the  owner's  supplemental  PAR."   The
          file of this appeal proceeding does not contain such a supplement. 
          As stated by the tenant such supplement contended that $966.60 had 
          been expended in 1979 for appliances for the  prior  tenant,  that
          the tenant's allegations about prior rents are hearsay,  and  that
          the tenant has not  shown  that  her  rents  were  unlawful.   The
          tenant's response to this is that all of her appliances were  old,
          that she does not have to prove the unlawfulness of her rent,  and
          that the owner has the obligation to prove that the rent  was  not
          unlawful.

          (On October 30, 1991 Central Realty Group of Companies,  80  Fifth
          Avenue, and General Realty Groups of Companies,  in  care  of  its
          attorney, were requested to submit  copies  of  the  "supplemental
          PAR:  No reply has been received from either of them to date.) 

          The Commissioner is of the  opinion  that  the  tenant's  petition
          (Docket No. BG 410159-RT) should be granted and that  the  owner's
          petition (Docket No. BG 410282-RO) 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) 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 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 






          Docket Nos.: BG 410159-RT; BG 410282-RO

          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 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
          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 First Department, rent records are required from June 30, 1974 
          or a later, proven base date.  As the owner did  not  furnish  the
          required records it was proper for the  Administrator  to  utilize
          the default procedure.  Such procedure sets the lawful rent  in  a
          complainant's vacancy lease as the lowest of three amounts arrived 
          at by different means.  An  M.C.I.  order  granted  several  years
          prior to the complainant's occupancy is not specifically  included
          in the default procedure setting the tenant's lawful vacancy rent, 
          particularly since the $245.79 rent of Apartment  1-F  [being  the
          lowest of  the  three  amounts  used  in  the  default  procedure]
          presumably already includes it.  While it might be appropriate  to
          allow an increase for the properly-substantiated  installation  of
          new equipment during the vacancy immediately prior to the time 






          Docket Nos.: BG 410159-RT; BG 410282-RO

          that  the  complainant  commenced  occupancy,  such   improvements
          constituting  an  increase  in  the  services  and  value  of  the
          apartment compared to what the prior  tenant  was  receiving,  the
          owner gave the Administrator an (unpaid) invoice for only  $615.60
          for a new refrigerator and gase range, the tenant has claimed that 
          her refrigerator, stove and sink were all old when she  moved  in,
          and the owner has not submitted any further evidence to contradict 
          the tenant's assertions.  In addition there is  not,  despite  the
          October 30, 1991 request to the owner and its attorney for a  copy
          of a  "supplemental  PAR,"  even  any  challenge  in  this  appeal
          proceeding to the Administrator's failure to  allow  any  increase
          for  purported  new  equipment.   The  Administrator's  order   is
          therefore not changed in that respect.  

          Regarding the owner's contention that the current rents  of  other
          apartments  in  the  building  should  have   been   used   in   a
          comparability study, and that the tenant's initial rent was at  or
          near the lawful rent:  This is not  a  Fair  Market  Rent  Appeal,
          where an attempt is being made to set an initial  legal  regulated
          rent comparable to other  units  in  a  building,  but  rather  an
          overcharge complaint  regarding  an  already-stabilized  apartment
          whose lawful rent is determined by its  individual  history.   The
          default procedure is used  both  because  the  unknown  individual
          history of the apartment cannot be presumed to have resulted in  a
          rent comparable to other apartments, and because the procedure  is
          in part a penalty for use against owners  who  have  defaulted  in
          their  obligation  to  retain  records  sufficient  to  prove  the
          lawfulness of the rents charged.

          Section 2526.1(a) of the current Rent Stabilization Code  provides
          in  pertinent  part  for  the  imposition  of  treble  damages  on
          overcharges occurring on or after April 1, 1984, unless  an  owner
          can establish that the overcharge was not  willful.   Because  the
          owner was put on notice of the possibility of  treble  damages  by
          the Final Notice  of  Pending  Default,  because  the  tenant  has
          challenged the Administrator's failure to find that the overcharge 
          was  willful,  and  because  the  owner  has  not   rebutted   the
          presumption of willfulness, treble damages are hereby  imposed  on
          overcharges occurring on and after April 1, 1984.  The  overcharge
          calculations are as follows:

               January 1, 1980 to       $120.25 per month x 12
               December 31, 1980         months = $1,443.00

               January 1, 1981 to       $141.80 per month x 24
               December 31, 1982         months = $3,403.20

               January 1, 1983 to       $151.38 per month x 15
               March 31, 1984            months = $2,270.70

               April 1, 1984 to         $151.38 per month x 21
               December 31, 1985         months x 3= $9,536.94







          Docket Nos.: BG 410159-RT; BG 410282-RO

          The total overcharge, including excess  security  of  $151.38,  is
          therefore $16,805.22 from January 1, 1980 to December 31, 1985.

          This order may, upon the expiration of the  period  in  which  the
          owner may institute a  proceeding  pursuant  to  Article  Seventy-
          Eight of the Civil Practice Law and Rules, be filed  and  enforced
          by the tenant in the same manner as a judgment or  not  in  excess
          of twenty percent thereof per month  may  be  offset  against  any
          rent thereafter due the owner.

          Because of the possibility that the rents charged were not reduced 
          after the Administrator's order, the owner is cautioned to  adjust
          the rent, in leases after those considered by  the  Administrator,
          to amounts no greater than that determined by the  Administrator's
          order plus any lawful increases,  and  to  register  any  adjusted
          rents with the Administrator's order being given as the reason for 
          the adjustment.  Because of the possibility that the tenant herein 
          may have vacated by the time that this determination is issued,  a
          copy of this determinati n  is  being  mailed  to  the  tenant-in-
          occupancy.

          THEREFORE, in accordance  with  the  Rent  Stabilization  Law  and
          Code, it is

          ORDERED, that the tenant's petition be, and the  same  hereby  is,
          granted; that the owner's petition be, and  the  same  hereby  is,
          denied; and that the District Rent Administrator's order  be,  and
          the same hereby is, modified in accordance  with  this  order  and
          opinion, including the correction of the owner's name  to  General
          Realty Group of Companies, Inc.  The total  overcharge,  including
          excess security of $151.38, is $16,805.22 as of December 31, 1985. 
          The lawful stabilization rent is $308.22 per month  in  the  lease
          from January 1, 1983 to December 31, 1985.

          ISSUED:



                                         ------------------------
                                         ELLIOT SANDER
                                         Deputy Commissioner
    

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