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

          APPEAL OF                              DOCKET NO.: BK 410150 RO   
                                                 DRO DOCKET NO.: CDR 31,662  
              GRAMERCY CONCOURSE CO. - OWNER                                
                                                 Tenants - Beverly Wilson &  
                                                           Donald Privett

                              PETITIONER      : 


               On November 30, 1987, the above-named owner filed a Petition 
          for Administrative Review against an order issued on October  27,
          1987 by the Rent Administrator, 10 Columbus Circle, New York, New 
          York concerning the housing accommodation known as 102 East  22nd
          Street,  apartment  6H,  New   York,   New   York   wherein   the
          Administrator directed the owner to refund  $18,987.94  inclusive
          of excess security and interest on the overcharge occurring on or 
          after April 1, 1984.

               The Commissioner notes that this  proceeding  was  initiated
          prior to April 1, 1984.  Sections 2526.1 (a) (4) and 2521.1(d) of 
          the Rent Stabilization Code (effective  May  1,  1987)  governing
          rent overcharge and fair market  rent  proceedings  provide  that
          determination of these matters be based  upon  the  law  or  code
          provisions in  effect  on  March  31,  1984.   Therefore,  unless
          otherwise indicated, any reference in this order and  opinion  to
          Sections of the Rent Stabilization Code is to the Code in  effect
          on April 30, 1987, and this proceeding  is  being  determined  in
          accordance therewith.

               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 in the administrative appeal.  

               The tenants commenced this proceeding on February  14,  1984
          by filing a complaint of rent  overcharge  with  the  former  New
          York City Conciliation and Appeals Board, a predecessor agency to 
          the DHCR.

          ADM. REVIEW DOCKET NO. BK 410150 RO

               On October 24, 1984, a copy of the complaint  along  with  a
          demand for a complete rental history  of  the  subject  apartment
          from its base date was served on the owner.

               In response, the owner stated that September  15,  1978  was
          the base date for the subject apartment and submitted  copies  of
          leases from September 15, 1978 through January 31, 1986. 

               On January 25, 1986 and on May 6, 1986,  the  DHCR  notified
          the owner that documentation, consisting of 1) a copy of the DC 2 
          notice served on the first stabilized tenant; or 2) a copy of the 
          landlord's report of statutory decontrol (R-42  form);  or  3)  a
          copy of the rent ledger for the  period  of  September  15,  1978
          showing the date of decontrol, was required to  substantiate  the
          asserted base date.  The owner was also informed that failure  to
          comply with the requirement would be considered a  default  which
          would result in the Administrative  establishment  of  the  legal
          stabilization rent in accord  with  approved  default  procedures
          pursuant to Code Section 42A.  

               In reply, the owner asserted that it had requested access to 
          the rent control office records in an effort to obtain a copy  of
          the R-42, allegedly filed with that office, but  the  record  was
          not yet available.  Therefore, the owner requested  an  extension
          of time until such time as it could get a copy of the form.   The
          owner included with  its  response  a  typewritten  letter  dated
          August 3, 1978 allegedly from the former rent controlled tenant.

               The Administrator granted several time extensions to  enable
          the owner to provide the complete  rental  history  required.  On
          October 27, 1987, the Administrator issued the order  here  under
          review, establishing the lawful stabilized rent at $575.19 as  of
          January 31, 1986 and directing the owner to refund overcharges of 
          $18,987.94 inclusive of  excess  security  and  interest  on  the
          overcharge occurring on or after April 1, 1984. 

               In its appeal, the owner contends that it has been unable to 
          obtain   the   required   records   because   of   administrative
          difficulties created by having employed four different management 
          companies to operate the subject property over a ten year period.
          The owner also asserts that given its belief  that  an  R-42  had
          been filed, it had made two requests to the DHCR for a  copy  but
          the agency, failing its responsibility, had not responded to  the

               In reply, the tenant contends that the  owner  neglected  to
          meet its responsibility under the law to provide  a  full  rental
          history of the subject apartment but  instead  has  attempted  to
          shift  its  responsibility  to  the  DHCR.   The  tenant  further
          contends that the purported four different  management  companies
          were only one company that  had  operated  under  four  different
          names.  Finally, the tenant questions the credibility of an owner 
          who has tried to arrange a settlement before a final decision  by

          ADM. REVIEW DOCKET NO. BK 410150 RO
          the DHCR was rendered.

               The owner filed  a  supplemental  petition  in  March  1988,
          contending that the owner had  been  diligent  in  attempting  to
          obtain a copy of the R-42 form and that despite two  applications
          by the owner for access to records, the  owner  has  been  denied

               In a supplemental petition filed on June 30, 1988, the owner 
          reiterates that it had made good faith efforts to obtain the R-42 
          from the DHCR and the onus  is  on  the  agency  to  produce  the
          document.  The owner also asserts that the current managing agent 
          made all reasonable efforts to obtain the  rental  records  which
          could have been "lost in the shuffle" of managing a larger volume 
          of apartments and that the  owner  should  not  be  penalized  so
          severely for one administrative deficiency.  The remaining issues 
          raised by the owner are based upon the  current  Code,  effective
          May 1, 1987: 1) the owner is not required to maintain records for 
          more than four years; and 2) since the tenant's objection to  the
          registration was dismissed as untimely, prior to the issuance  of
          the order at issue, the legal regulated rent was  established  by
          the registration and the Administrator was collaterally  estopped
          from rendering a decision on the issue.  The owner concludes  its
          supplement by taking notice that the tenant's assertion regarding 
          offers of settlement  were  inappropriately  raised  and  legally

               The tenant did not respond to the supplemental petitions.

               After careful consideration,  the  Commissioner  is  of  the
          opinion that this  proceeding  should  be  remanded  for  further

               Section 42A of the former Code requires an owner to maintain 
          rental records from the base date of the  housing  accommodation.
          A rent is lawful if it does not exceed the  lawful  rent  on  the
          base date, i.e. the Initial Legal Regulated Rent, plus all  other
          lawful increases.  Since  the  putative  instant  base  date  was
          subsequent to June 30, 1974, it was incumbent upon the  owner  to
          establish the base date by submitting  appropriate  documentation
          as was related in the notices sent to the owner:  a DC-2  notice,
          an R-42 form, or a rent ledger from the given period.  Although 
          given ample opportunity to do so, the owner failed to submit  any
          one of those documents even in this appeal.  Instead,  the  owner
          has attempted to shift its responsibility  to  the  DHCR  without
          offering a scintilla of proof that the  alleged  filing  actually
          occurred.  A careful search of the agency's  records  reveals  no
          evidence, other than the owner's assertions,  that  an  R-42  was
          filed.   The  Rent  Stabilization  Law  gives   the   owner   the
          responsibility of calculating  lawful  rent  and  of  maintaining
          necessary records.  Accordingly, the Commissioner finds that  the
          burden of producing the appropriate documentation  remained  with
          the owner.       

               The Emergency Tenant Protection Act gave certain tenants  of

          ADM. REVIEW DOCKET NO. BK 410150 RO
          vacancy decontrolled apartments  the  right  to  challenge  their
          initial rents.  A tenant whose  apartment  was  subject  to  rent
          control on  June  30,  1974;  and  became  subject  to  the  Rent
          Stabilization Law as a result of a vacancy occurring  after  June
          30, 1974 has the right to challenge his initial  legal  regulated
          rent.  The owner must serve him  with  notice  of  initial  legal
          regulated rent (DC-2 notice).  The tenant entitled to receive the 
          notice is the first tenant to take occupancy  after  the  vacancy
          decontrol.  If that tenant moves out before being served  with  a
          DC-2 notice, the tenant next in occupancy is entitled to  receive
          it.  The appeal must be filed, if at all, within ninety (90) days 
          of receipt of the DC-2 notice.    

               The Commissioner notes that the owner submitted  a  complete
          lease history from the asserted base date but was in default  for
          failing to substantiate the base date alleged.   Review  of  rent
          control records reveals that the last recorded rent control  rent
          for the subject apartment was the 1978 MBR (maximum base rent) of 
          $381.41.  The rent in the first lease submitted by the  owner  is
          $600.00.  There is no evidence of service of a DC-2 notice.   The

          owner failed to respond affirmatively to two requests for a  copy
          of  the  DC-2  notice.   Accordingly,  the  Commissioner   hereby
          determines that  the  tenant's  overcharge  complaint  should  be
          processed as a fair market rent appeal.     

               With  respect  to  the  owner's  contention  regarding   the
          application of the  current  Code  to  the  issues  at  bar,  the
          Commissioner notes that this proceeding,  having  been  initiated
          prior to April 1, 1984, is governed by the former  Code  pursuant
          to Sections 2526.1(a)(4) and 2521.1(d) of the current Code.   See
          Lavanant v. DHCR, 148 A.D2d 185, 544N.Y.S.2d 331 (App.  Div.  1st
          Dept.  1989),  applicable  to  dwellings,  such  as  the  subject
          apartment,   located   in   the   First   Judicial    Department.
          Accordingly, the owner was properly  required  to  submit  rental
          records dating from the base date.  The rent registered  in  1984
          pursuant to the registration requirements of the current code  is
          not determinative of the legality of  the  rent  at  issue  in  a
          complaint which precedes it.    

               Finally, the Commissioner's determination  is  made  without
          consideration of the settlement offers alleged by the tenant.

               THEREFORE, in accordance with the  provisions  of  the  Rent
          Stabilization Law and Code, it is

               ORDERED,  that  this  proceeding  be  remanded  for  further
          processing in accordance with this order and opinion.  It is

               FURTHER ORDERED, that the prospective  rent  established  by
          the  Administrator's  order  remain  in  effect  but   that   the
          retroactive rent and  refund  ordered  by  the  Administrator  be
          stayed until a new determination be rendered. 


          ADM. REVIEW DOCKET NO. BK 410150 RO

                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner



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