BL 210191 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 210191 RO
Jeffrey Betancourt, DISTRICT RENT ADMINISTRATOR
DOCKET NO.: K-3104382-RT
PETITIONER Tenant: Linda Mitchell
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
AND REVOKING ADMINISTRATOR'S ORDER
On December 17, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
November 12, 1987, by the District Rent Administrator, 10
Columbus Circle, New York, New York, concerning housing
accommodations known as Apartment C-2, 134 Prospect Place,
Brooklyn, New York 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 issue raised by the administrative appeal.
This proceeding was originally commenced by the filing of a fair
market rent appeal and 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, 1982 and expiring June 30,
1983 at a monthly rent of $380.00.
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. The owner responded to the complaint and
provided a rental history from April 1, 1980.
In the order herein appealed, the District Rent Administrator set
the lawful stabilized rent at $386.48 as of July 1, 1987 based on
the owner's failure to provide a full rental history, and ordered
a refund of the overcharges in the amount of $5738.26 including
interest and excess security.
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In this petition, the owner contends that he submitted rent
records for the subject apartment from April 1, 1980 to the
Administrator which showed no overcharge. The owner also
contends that the Administrator should have considered whether a
fair market rent appeal was appropriate for this case, that the
owner should have been given an opportunity to submit
comparability data, and that it was incumbent on the agency to
search its own rent control records for the rental history of the
apartment.
The Commissioner is of the opinion that this petition should be
granted.
Section 25 of the former Code provides that a fair market rent
appeal application may be filed by the tenant of an apartment
which was subject to rent stabilization or rent control prior to
July 1, 1971 and was vacated between January 1, 1974 and June 30,
1974, both dates inclusive, or of an apartment which was subject
to rent control on June 30, 1974 and vacated thereafter.
Division records indicate that a report of statutory decontrol
was filed for the subject apartment in 1972. Therefore a fair
market rent appeal is not applicable to this case. The
Commissioner finds that the Administrator correctly processed the
tenant's complaint as an overcharge proceeding and not as a fair
market rent appeal. However, the Administrator's finding of an
overcharge and the ordering of a refund cannot be affirmed on
this administrative appeal.
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 that 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 such tenants
of their right to have the lawful stabilized rent determined from
the June 30, 19784 base date and so as not to deprive tenants
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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 1985, 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 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.
The owner submitted all required rent records from April 1, 1980.
Pursuant to the JRD decision, the default procedure implementing
Section 42 was not warranted. Recalculation of the lawful
stabilized rent from April 1, 1980 indicates that the tenant was
not overcharged.
If the owner has already complied with the Administrator's order
and there are arrears due to the owner as a result of the instant
determination, the tenant is directed to pay off the arrears in
24 equal monthly installments. Should the tenant vacate after
the issuance of this order, 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,
the District Rent Administrator's order be and the same hereby is
revoked and it is determined that the tenant was not
overcharged.
ISSUED:
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JOSEPH A. D'AGOSTA
Deputy Commissioner
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