Docket Number: BL 130024-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.: BL 130024-RO
VERCO ASSOCIATES,
DRO DOCKET NO.: Q 3108262-R
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART
On December 13, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review of an order issued on July 3,
1987, by the District Rent Administrator, 10 Columbus Circle, New
York, New York, concerning housing accommodations known as
Apartment F-17, 99-31 64 Avenue, Forest Hills, New York 11374,
wherein the District Rent Administrator determined that the
tenant had been overcharged.
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, reference to Sections of the Rent
Stabilization Code (Code) contained herein are to the Code in
effect on April 30, 1987.
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 by the filing of a rent
overcharge complaint by the tenant with the New York City
Conciliation and Appeals Board, one of the predecessor agencies
to the DHCR. The tenant took occupancy pursuant to a lease
commencing July 1, 1979 and expiring June 30, 1981 at a monthly
rent of $520.00.
The owner was served with a copy of the complaint and was
requested to submit rent records to prove the lawfulness of the
rent being charged. In answer to the complaint, the owner
stated that it purchased the building on January 4, 1983, that
the building converted to cooperatives in January 1984, that the
rents for 5-1/2 room apartments vary from $464.00 to $653.00,
that the tenants paying the lowest rents have occupied their
Docket Number: BL 130024-RO
apartments for many years, that a complete rent history for the
subject apartment is not available, and that the owner has
collected only allowable increases.
In support of this contention, the owner submitted the following
documents:
Copy of lease for subject apartment for July 1, 1979 -
June 30, 1981, renewals for June 30, 1981 - June 30,
1984 and June 30, 1984 - June 30, 1986; a current rent
roll, various copies of apartment leases for other
tenants in apartments of the same number of rooms.
In Order Number Q-3108262-R, CDR #30,775, the District Rent
Administrator determined that the tenant had been overcharged and
set the lawful stabilization rent at $444.44 as of July 1, 1979
based on the owner's failure to provide a full rental history and
ordered the owner to refund the overcharges.
In this petition, the owner contends that the District Rent
Administrator's Order is incorrect and should be modified because
although leases could not be provided going back to 1974, it did
provide leases as far back as 1979 as well as a rent roll and
copies of the offering plan showing the range of rents for
apartments of the same size.
In answer to this petition, the tenant contends that the order
should be upheld because the purpose of their complaint was to
verify the accuracy of the monthly rental under their initial
lease, and the owner has not submitted any new information which
would substantially modify the DHCR's original finding.
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
Docket Number: BL 130024-RO
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 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.
Docket Number: BL 130024-RO
In this case, the owner has submitted a rental history that
conforms to the JRD ruling. Recalculation of the rent from April
1, 1980 indicates that the tenant was not overcharged.
If the owner has already complied with the Administrator's Order
and, as a result of the instant determination, there are arrears
due to the owner from the tenant, the tenant may pay off the
arrears in twenty-four equal monthly installments during the
next twenty-four months. Should the tenant vacate after the
issuance of this Order, all arrears are due immediately.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that this petition be and the same hereby is granted
and the Administrator's order be, and the same hereby is,
revoked, and it is determined that the tenant was not
overcharged.
ISSUED:
ELLIOT SANDER
Deputy Commissioner
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