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STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BI 110253-RO
DRO DOCKET NOS.: Q-3119899-R
PETITIONER TENANT: JOSEPH GRAFFEO
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
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contended that the tenant had withdrawn his complaint.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
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] 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),
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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.