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

            APPEAL OF                              DOCKET NO.BA210017RO
                                                :  DRO DOCKET NO.K3106071R
                 MELVIN ZUCKERMAN                  TENANT: CARMEN SMITH        

                                  PETITIONER    : 

                 On January 22, 1987, the above-named petitioner-owner filed a 
            Petition for Administrative Review against an order issued on 
            December 19, 1986, by the Rent Administrator, 10 Columbus Circle, 
            New York, New York, concerning the housing accommodations known as  
            222 Lenox Road, Brooklyn, New York, Apartment No. 3R, wherein the 
            Rent Administrator determined that the owner had overcharged the 
            tenant.  This petition was given duplicate docket numbers.

                 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 in 
            March, 1984 by the tenant in which the tenant stated that she first 
            moved to the subject apartment in May, 1983 at a rental of $570.00 
            per month.
                 In answer to the tenant's complaint, the owner stated in 
            substance that he is a federally appointed receiver appointed during 
            the pendency of a federal foreclosure action against the subject 
            premises and has not been able to obtain a full rental history for 
            the subject apartment.  The owner however did submit a rental 
            history for the subject apartment dating back to 1976 and evidence 
            showing that he had been appointed receiver as of July 1, 1983.

                 In Order Number CDR 28,529, the Rent Administrator determined 
            that due to the owner's failure to submit a complete rental history, 
            the tenant had been overcharged in the amount of $12,466.66
            including interests on the overcharge occurring on and after April 
            1, 1984 and directed the owner herein to refund such overcharge to 
            the tenant as well as to reduce the rent except that the prior owner 

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            was ordered to refund the overcharge it had collected from the 
            tenant out of this total amount.

                 In this petition, the owner alleges in substance that it could 
            not obtain complete rent records from the foreclosed owner of 
            record; that he is now preparing a request for preemption of the 
            rent stabilized rents with the Department of Housing and Urban 
            Development (HUD) since the U.S. Government holds the mortgage and 
            the rents are inadequate to maintain and operate the subject 
            premises; and that the rent of the subject apartment should be 
            recomputed in accordance with any schedule of fair market rents to 
            be proposed by HUD.

                 The record shows that a new owner has now purchased the subject 

                 In answer to the owner's petition, the tenant stated in 
            substance that the owner's petition should be denied.

                 The Commissioner is of the opinion that this petition should be 
            granted in part.
                 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 

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            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. 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.

                 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.

                 In this case, the owner has submitted a complete rental history 
            from April 1, 1980 in accordance with JRD.  An examination of the 
            rental history from April 1, 1980, discloses that a rent overcharge 
            did occur.  The lawful stabilization rents and amount of rent 
            overcharge including interest on overcharges occurring on and after 
            April 1, 1984 are set forth on the amended rent calculation chart 
            attached hereto and made a part hereof.  Further, contrary to the 
            owner's contention on appeal, there is no evidence that the rent of 
            the subject apartment was federally preempted and reset by HUD.

                 The owner is directed to reflect the findings and 
            determinations made in this order on all future registration 
            statements, including those for the current year if not already 
            filed, citing this order as the basis for the change.  Registration 
            statements already on file, however, should not be amended to 
            reflect the findings and determinations made in this order.  The 
            owner is further directed to adjust subsequent rents to an amount no 

            greater than that determined by this order plus any lawful 

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                 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 shall be permitted to pay off the 
            arrears in twenty four equal monthly installments.  Should the 
            tenant vacate after the issuance of this order or have already 
            vacated, said arrears shall be payable immediately.

                 The Commissioner has determined in this Order and Opinion that 
            the owner herein Melvin Zuckerman collected overcharges of $5763.18.  
            This Order may, upon expiration of the period for seeking review of 
            this Order and Opinion pursuant to Article Seventy-eight of the 
            Civil Practice Law and Rules, be filed and enforced as a judgment 
            against such owner.  Where the tenant files this Order as a 
            judgment, the County Clerk may add to the overcharge, interest at 
            the rate payable on a judgment pursuant to section 5004 of the Civil 
            Practice Law and Rules from the issuance date of the Rent 
            Administrator's Order to the issuance date of the Commissioner's 
            Order.  The Commissioner has further determined that the prior owner 
            Ronox Builders collected overcharges of $227.08.  The tenant may 
            file an action in a court of competent jurisdiction to recover this 
            sum against the prior owner Ronox Builders.

                 THEREFORE, in accordance with the Appellate Division ruling in 
            JRD, it is

                 ORDERED, that this petition for administrative review be, and 
            the same hereby is, granted in part, and, that the order of the Rent 
            Administrator be, and the same hereby is, modified in accordance 
            with this order and opinion.  The amount of the rent overcharge 
            through December 30, 1986 owed by the owner herein is $5763.18.     


                                            JOSEPH A. D'AGOSTA
                                            Deputy Commissioner


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