Docket No. BH 210195-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
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IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BH 210195-RO
2525 REALTY CO., DRO DOCKET NO.: TC-047557-G
TENANT: Brenda Jones and
PETITIONER Warren McGill
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On August 12, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on July
8, 1987, by the District Rent Administrator, 10 Columbus Circle,
New York, New York, concerning housing accommodations known as
Apartment 4D, 2525 Nostrand Ave., Brooklyn, New York, wherein the
District Rent Administrator determined that the tenant had been
overcharged.
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 of a rent
overcharge complaint by the tenant with the New York City
Conciliation and Appeals Board, one of the predecessor agencies to
the DHCR. The tenant took occupancy pursuant to a lease
commencing June 1, 1980 and expiring May 31, 1982 at a monthly
rent of $400.00.
In Order Number TC-047557-G, the District Rent Administrator
determined that the owner had failed to provide a full rental
history for the subject apartment, set the lawful stabilized rent
at $290.38 as of June 1, 1980 through May 31, 1982 and ordered a
refund of the overcharges in the amount of $2,192.40 plus excess
security of $109.62.
In this petition, the owner contends that the District Rent
Administrator's Order is incorrect and should be modified because
the petitioner purchased the building in 1985 whereas the
overcharge complaint was filed in 1980; and that it was never
served with a copy of the complaint.
In answer to this petition, the tenant contends that the order
should be upheld.
Docket No. BH 210195-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) 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
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.
Docket No. BH 210195-RO
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 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.
The record reveals that the prior owner provided copies of leases
from February 1, 1979 through May 31, 1982. The rental history
submitted conforms to the JRD ruling. Recalculation of the rent
from April 1, 1980 indicates that the tenant was not overcharged.
If the owner has already complied with the Administrator's Order
and, as a result of the instant determination, there are arrears
due to the owner from the tenant, the tenant may pay off the
arrears in twenty-four equal monthly installments during the next
twenty-four months. Should the tenant vacate after the issuance
of this Order, all arrears are due immediately.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
it is
ORDERED, that this petition be, and the same hereby is granted and
the District Rent Administrator's order be and the same hereby is
revoked, and it is determined that the tenant was not overcharged.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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