BI 210070 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.: BI 210070 RO
EMPRESS MANOR APARTMENTS,
DRO DOCKET NO.: K 3104694 R
PETITIONER Tenant: Gloria Lambert
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART
On August 20, 1987 the above named petitioner-owner filed a
Petition for Administrative Review against an order issued on
July 17, 1987 concerning housing accommodations known as
Apartment 6-J at 1360 Ocean Parkway, Brooklyn, New York wherein
the Rent Administrator determined that the tenant had been
overcharged in the amount of $10,770.25, including excess
security and interest.
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 and Section 2526.1(a) of the current 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 issues raised by the administrative appeal.
This proceeding was originally commenced in March, 1984 by the
filing on of a rent overcharge complaint by the tenant, in which
she stated that she had commenced occupancy on May 1, 1982 at a
rent of $521.00 per month, pursuant to a two-year lease
commencing on May 1, 1982. The tenant paid a separate rent of
$100.00 per month for garage space commencing September 1, 1982.
The owner was served with a copy of the complaint and was
directed to submit a complete rent history from the base date,
including copies of all leases.
The lease history submitted by the owner was incomplete. The
owner also submitted a copy of a letter to the tenant offering
$847.30 as settlement for all overcharges, and a check in that
amount. The tenant notified the Administrator that she did not
accept this settlement.
BI 210070 RO
In order No. K 3104694 R issued on July 17, 1987, the Rent
Administrator determined that the tenant had been overcharged in
amount of $10,770.25, including excess security and interest on
overcharges collected on or after April 1, 1984. The
Administrator had determined the lawful rent in accordance with
default procedures as required under Section 42A of the former
Rent Stabilization Code.
In its petition the owner contends that the Administrator's order
was incorrect. The owner argues that the Administrator
improperly held the owner in default because of the incomplete
lease history. Specifically, the owner contends that the
complaint should have been processed in accordance with the
Omnibus Housing Act of 1983, which, under the revised Rent
Stabilization Law and Code, did not require a lease history prior
to April 1, 1980, the date four years prior to the initial
registration of the subject apartment. The owner also contends
that the entire proceeding is invalid because the Administrator
totally ignored the owner's settlement offer without attempting
to verify it. Finally, the petitioner challenges the actual
calculation of overcharges because the cost of new equipment was
undervalued and because the separate rental amount for the garage
space was not included in the lawful rent.
The tenant did not respond to the petition.
The Commissioner is of the considered opinion that the petition
should be granted in part.
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
BI 210070 RO
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.
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.
Accordingly, the Commissioner has computed the stabilized rent
from April 1, 1980.
These computations show that overcharges are substantially
reduced. An initial overcharge occurred in the complainant's
vacancy lease terms for both the apartment and the garage space.
Under Guidelines 13, the lawful rent for the apartment of $509.84
was determined by adding to the previous rent of $323.29 a 13%
guidelines increase for a 2-year lease, a vacancy allowance of
15% and a monthly charge of $6.43 for the cost of a new
dishwasher. The claim for the refrigerator is disallowed because
it was not mentioned in the lease history that the owner
submitted below, and may not be considered for the first time on
appeal.
The petitioner is correct, however, that the order failed to
calculate guidelines increases for the garage space. The lawful
rent for the space in complainant's vacancy lease of $67.32 was
determined by adding the 13% guidelines increase and the 15%
vacancy allowance to the base rent for the garage on April 1,
1980 in the amount of $52.59. This amount was used because it
was the last garage rent paid by the prior tenant. The
resulting monthly overcharge of $32.68 is calculated for only 20
months because the tenant did not rent the garage space until
September, 1982.
BI 210070 RO
Since the renewal lease of May 1, 1986 included the garage space,
the Administrator was incorrect in failing to add the separate
rental amount for the garage in determining the lawful rent.
Finally, the petitioner's claims regarding the settlement of the
proceeding had been denied by the tenant in the record below, and
the Administrator properly ignored the claim entirely. It is
noted that the owner only submitted a copy of the face of the
check for $847.30, and ignored the Administrator's request for
proof that the tenant cashed it. Since the tenant's assertion
that she did not cash the check is undisputed, the Administrator
correctly dismissed the "settlement" claim.
As a result of the above changes, total overcharges are reduced
to $2772.17, from $10,770.25, as documented in a revised rent
calculations chart attached hereto and made a part hereof.
This order may, upon the expiration of the period in which the
owner may institute a proceedi g 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.
If the owner has already complied with the District Rent
Administrator's order and there are arrears due to the owner as a
result of the instant determination, the tenant shall be
permitted to pay off the arrears in twelve (12) equal monthly
installments beginning with the first rent payment date after
issuance of this order and opinion. Should the tenant vacate
after the issuance of this order or have already vacated, said
arrears shall be payable immediately.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that this Petition be, and the same hereby is, granted
in part; and that the Administrator's order be, and the same
hereby is amended in accordance with this order and opinion.
ISSUED:
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JOSEPH A. D'AGOSTA
Deputy Commissioner
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