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     
          ----------------------------------X                                   


            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:
                                                  ------------------------
                                                  JOSEPH A. D'AGOSTA
                                                  Deputy Commissioner
           
             
                                          
    

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