BI 110307 RO

                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                              DOCKET NO. BI 110307 RO
                                              :  DRO DOCKET NO.Q-3119358-R

                                PETITIONER    : 

               On September 19, 1986, the above-named petitioner-owner filed 
          a Petition for Administrative Review against an order issued on 
          September 11, 1986, by the Rent Administrator, 10 Columbus Circle, 
          New York, New York, concerning the housing accommodations known as 
          68-61 Yellowstone Blvd., Queens, New York, Apartment No. 710, 
          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 in 
          March, 1984, of a rent overcharge complaint by the tenant.

          The owner was served with a copy of the complaint on October 
          31, 1984 and was requested to submit rent records from the base 
          date to prove the lawfulness of the rent being charged.  No 
          response was submitted by the owner.  On July 9, 1986, the owner 
          was served with a Final Notice of Pending Default directing it to 
          submit a complete rental history within twenty days of July 9, 
          1986.  Again there is no record of any response from the owner.

          In Order Number CDR 22,264, the Rent Administrator determined 
          that, due to the owner's failure to submit a complete rental 
          history, the tenant had been overcharged in the amount of 
          $4109.22, and directed the owner to refund such overcharge to the 
          tenant as well as to reduce the rent.

          In this petition, the owner contends in substance that it 
          submitted a complete rental history including copies of all leases 
          on August 20, 1986.  No copy of such submission was submitted with 

          BI 110307 RO

          the owner's petition.

          The Commissioner is of the opinion that this petition 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) and to produce 
          such records to the DHCR upon demand.

          Section 26-516 of the 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 to 
          produce rent records for more than four (4) years prior to the 
          most recent registration, and concomitantly, established a four 
          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 rights 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 four 
          years prior to April 1, 1984 of the 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. 
          Mgmt. v. Eimicke, 148 A.D.2d 610. 539 N.Y.S. 2d 667 (App. Div. 2d 
          Dept., 1989). motion for leave to reargue or for leave to appeal 
          to the Court of Appeals denied ( App. Div. 2d Dept., 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 four years of rent records.

          BI 110307 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 Dept. 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.  However, the record in this case indicates that the owner 
          did not submit any rental history in the proceeding before the 
          Rent Administrator nor on appeal.  It is noted that the owner 
          claims to have made a submission on August 20, 1986.  Even if this 
          were true, the submission would not have been made within the 
          twenty day time limit given the owner in the July 9, 1986 Final 
          Notice of Pending Default.  Accordingly, the Rent Administrator's 
          order defaulting the owner and finding a rent overcharge was 

          Because this determination concerns lawful rents only through 
          March 14, 1982, the owner is cautioned to adjust subsequent rents 
          to an amount no greater than that determined by the Rent 
          Administrator's order plus any lawful increases and to register 
          any adjusted rents with this order and opinion being given as the 
          explanation for the adjustment.

          This order may upon the expiration of the period in which the 
          owner may institute a proceeding pursuant to Article 78 of the 
          Civil Practice Law and Rules, be filed and enforced as a judgment 
          or not in excess of twenty percent per month of the overcharge may 
          be offset against any rent thereafter due the owner.

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

          ORDERED, that this petition for administrative review be, and 

          BI 110307 RO
          the same hereby is, denied, and, that the order of the Rent 
          Administrator be, and the same hereby is, affirmed.  The total 
          amount of the rent overcharge through March 14, 1982 is $4109.22.


                                          ELLIOT SANDER
                                          Deputy Commissioner



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