BJ 130272 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 SJR 5507 (Deemed Denial)
IN THE MATTER OF THE ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BJ 130272-RO
SULZBERGER-ROLFE, INC.,
DRO DOCKET NOS.: Q-3109590-R
CDR 31397
PETITIONER TENANT: RHODA WEINER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On October 9, 1987 the above named petitioner former-owner filed
a Petition for Administrative Review against an order issued on
September 10, 1987 by the District Rent Administrator, 10
Columbus Circle, New York, New York concerning housing
accommodations known as Apartment 1006 at 125-10 Queens
Boulevard, Kew Gardens, 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 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 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 she
stated that she had commenced occupancy on December 17, 1980 at a
rent of $524.77 per month.
The (former) owner, Sulzberger-Rolfe, Inc., was served with a
copy of the complaint on February 25, 1985 and was requested to
submit rent records to prove the lawfulness of the rent being
charged. In answer to the complaint, the owner submitted a
rental history from 1975, and a "New Equipment Order" form of its
owner devising dated November 24, 1980 which calculated an $8.25
rent increase to $524.77 for a 12 cubic foot Hotpoint
BJ 130272 RO
refrigerator.
On January 6, 1987 Sulzberger-Rolfe Inc., was sent a Final Notice
of Pending Default, which stated in substance that unless leases
were submitted from the base date, certain DHCR procedures would
be used to establish the lawful stabilization rent, and treble
damages would be imposed on willful overcharges occurring on or
after April 1, 1984.
In Order Number CDR 31397, the District Rent Administrator by
using the default procedure and imposing treble damages,
determined that the tenant had been overcharged in the amount of
$13,270.45 as of December 31, 1986; and directed the owner to
refund such overcharge to the tenant as well as to reduce the
rent.
In this petition, Sulzberger-Rolfe, Inc., contends among other
things that it substantially complied with the Administrator's
request for prior leases by submitting a rental history from
1975; and that the Administrator's order should have reflected a
rent reduction and refund given to the tenant.
In answer the tenant asserts in substance that, while her rent
was reduced, she never received any payment for overcharges
through March, 1985; and that treble damages are warranted since
the owner does not dispute the overcharge but has failed to pay
the amount ordered or even the amount earlier promised.
The Commissioner is of the opinion that this petition should be
granted.
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
BJ 130272 RO
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),
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.
Beginning with the previously submitted September 1, 1979 lease
the Commissioner has set forth the lawful stabilization rents on
the amended rent calculation chart attached hereto and made a
part hereof, and has determined that no overcharge occurred as of
March 31, 1985.
If the owner has already complied with the Administrator's order
and there are arrears due to the owner as a result of the present
determination, the owner is directed to allow the tenant to pay
off the arrears in twelve equal monthly installments. 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 District Rent Administrator's order be, and
the same hereby is, revoked since there was no overcharge. The
lawful stabilization rents are established on the attached chart,
which is fully made a part of this order, and it is found that
there was no overcharge as of March 1, 1985.
BJ 130272 RO
ISSUED:
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ELLIOT SANDER
Deputy Commissioner
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