BI 110253 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.: BI 110253-RO

                        ERDA REALTY,
                                                  DRO DOCKET NOS.: Q-3119899-R
                                                                   CDR 31167
                                  PETITIONER      TENANT:  JOSEPH GRAFFEO
          ----------------------------------X                                   


            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW


          On September 24, 1987 the above named  petitioner-owner  filed  a
          Petition for Administrative Review against  an  order  issued  on
          August 20, 1987 by the District Rent Administrator,  10  Columbus
          Circle, New York,  New  York  concerning  housing  accommodations
          known as Apartment 1J at 119-02 91st Avenue, Richmond  Hill,  New
          York wherein the District Rent Administrator determined that  the
          owner had overcharged the tenant.

          The  issue  in  this  appeal  is  whether   the   District   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  he
          stated that he had commenced occupancy in  November,  1978  at  a
          rent of $340.00 per month.

          On March 30, 1984 the owner was notified of  the  complaint.   In
          answer to the notice, the owner submitted a letter,  prepared  by
          the owner and signed by the tenant,  stating  that  he  had  been
          shown rent records from the base date showing there to have  been
          no overcharge, and asking that his complaint be disregarded.


          By letter dated January 21, 1985 the tenant's  wife  stated  that
          she had been frightened by the owner's  agent  into  signing  the
          request to withdraw the complaint, and that she wished to  reopen
          it.  This letter was also signed by  the  tenant.   Although  the
          record does not indicate when a copy of the letter  was  sent  to
          the owner, the owner refers in a letter of July 17,  1987  to  "a
          letter from Mrs. Graffeo dated January 21, 1985."

          On June 26, 1986 and April 17, 1987  the  owner  was  sent  Final
          Notices of Pending  Default.   In  response  to  both  the  owner






          BI 110253 RO
          contended that the tenant had withdrawn his complaint.

          In  an  order  issued  on  August  20,  1987  the   Administrator
          calculated a default rent, and found that  the  tenant  had  been
          overcharged in the amount of $3,346.82 as of June 13, 1985.

          In this petition the owner contends in substance that, because of 
          the tenant's letter of retraction, it had assumed that  the  case
          would be closed; that it  never  received  notice  prior  to  the
          [first] Final  Notice  that  the  tenant's  retraction  had  been
          withdrawn; that it is willing to provide all necessary leases  to
          demonstrate that the tenant  was  not  overcharged;  and  that  a
          hearing should be held as to whether  the  tenant  retracted  his
          complaint of his own free will.

          The Commissioner is of the opinion that this petition  should  be
          granted.

          The Commissioner initially finds that, since the owner was  given
          an opportunity, after being put on notice by being forwarded  the
          tenant's January 21, 1985 letter, to submit leases from the  base
          date, but did not do so either in that proceeding or  on  appeal,
          the only question is whether the evidence of  record  established
          the lawfulness of the rents charged.

          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), 






          BI 110253 RO
          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 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
          tenant herein had a lease rent of $340.00 on that  date,  so  the
          base date rent is $340.00.  The later lawful stabilization  rents
          are $377.40 per month from November  15,  1980  to  November  14,
          1981; $415.14 per month from November 15, 1981  to  November  14,
          1982; $431.75 per month from November 15, 1982  to  November  14,
          1983; $449.02 per month from November 16, 1983  to  November  15,
          1984; and $475.96 per month from November 16,  1984  to  November
          15, 1985.  Since those were the actual rents charged,  as  listed
          by the tenant, there was no overcharge as of the time the  tenant
          was evicted in June, 1985.

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

          ORDERED, that this petition be, and the same hereby  is,  granted
          and that the District Rent Administrator's order be, and the same 
          hereby is, revoked since  there  was  no  rent  overcharge.   The
          lawful stabilization rent is $475.96 as of November 16, 1984.



          ISSUED:

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

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