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STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.: BK 210071 RO
DISTRICT RENT OFFICE
Howard Management Company, DOCKET NO.: K-3105444-R/T
Lawrence & Clementine
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
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
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
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