BK 210071 RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                              DOCKET NO.: BK 210071 RO

                                                 DISTRICT RENT OFFICE
               Howard Management Company,        DOCKET NO.: K-3105444-R/T

                                                 Lawrence & Clementine
                                   PETITIONER          Riddick


          On November 27, 1987, the above-named owner filed a Petition  for
          Administrative Review of an order issued on November 24, 1987, by 
          the Rent  Administrator  concerning  the  housing  accommodations
          known as 425 East 26th Street, Brooklyn, New York, Apartment  No.
          6E, 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

          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  on  March
          30, 1984 of a rent overcharge complaint by the tenant.  

          In answer to the tenant's complaint,  the  owner  submitted  rent
          records dating back to at least April 1, 1980.
          In Order Number K-3105444-R/T, the Rent Administrator  determined
          that, due to the owner's failure  to  submit  a  complete  rental
          history, the lawful stabilization rent was based on  Section  42A
          default procedure,  effecting  a  rent  overcharge  of  $3756.19,
          including excess security and interest on  that  portion  of  the
          overcharge occurring on and after April 1, 1984.

          In  this  petition,  the   owner   requests   reversal   of   the
          Administrator's order and contends in substance that, among other 
          things, there were no overcharges.

          The Commissioner is of the opinion that this petition  should  be

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          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

          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.

          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.

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          Given that 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.  Since, in the instant case, the record contains  a  rental
          history going back to April 1, 1980, the owner cannot be held  to
          have defaulted.

          Furthermore, for the period April 1, 1980 through August 31, 1986 
          used in the Administrator's calculations, there  is  no  evidence
          that the tenant paid any excess in rents lawfully  allowed  under
          the applicable rent guidelines.

          Therefore, the Administrator's order finding  a  rent  overcharge
          must be revoked. 

          If the owner has already complied with the  Rent  Administrator's
          order and there are arrears due to the owner as a result  of  the
          instant determination, the tenant is permitted  to  pay  off  the
          arrears in 24 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 Appellate Divisions  ruling  in
          JRD, it is

          ORDERED, that this petition for  administrative  review  be,  and
          the  same  hereby  is,  granted,  that  the  order  of  the  Rent
          Administrator be, and the same hereby  is,  revoked,  and  it  is
          found that no rent overcharge occurred.


                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner


          BK 210071 RO


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