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

          ------------------------------------X
          IN THE MATTER OF THE ADMINISTRATIVE :    ADMINISTRATIVE REVIEW
          APPEAL OF                                DOCKET NO.BG110108RO
                                              :    DRO DOCKET NO.Q3121902R
             Three Towers Associates,              TENANT: Barbara Jane 
                                                           Schaefer
                               PETITIONER     :
          ------------------------------------X

            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW

          On July 20, 1987 the  above-named  owner  filed  a  Petition  for
          Administrative Review against an order issued on November 21, 1986 
          by the Rent Administrator concerning the  housing  accommodations
          known as 270  Grand  Central  Parkway,  Floral  Park,  New  York,
          Apartment No.9s wherein the Rent Administrator determined that the 
          owner was in default due to its failure to submit  the  requisite
          rental history.

          The Commissioner notes that, in response to  this  Petition,  the
          complainant tenant was correct in her assertion that said peition 
          was not filed within the 35 day period of the Rent Administrator's 
          order.  However, the Rent Administrator's order, in  addition  to
          other correspondence of the prior proceeding, was never served on 
          the correct owner by the D.H.C.R.  Accordingly, this petition must 
          deemed timely.

          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 finding 
          the owner in default and to have overcharged the complainant tenant 
          under the Section 421-a rent program was warranted.
               
          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 February 
          10, 1984 of a rent overcharge complaint, wherein the  complainant
          tenant alleges being overcharged under  the  Section  421-a  rent
          program.

          The record, in the  proceeding  before  the  Rent  Administrator,
          contained a rental history dating back to April 1, 1980.













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          In Order Number Q-3121902R, the Rent Administrator determined that, 
          due to the owner's failure to submit the requisite rental history, 
          the base rent and subsequent lawful stabilization rents were based 
          on the Section 42A default procedure, effecting a rent overcharge 
          of $9,960.99, including excess security and treble damages on that 
          portion of the overcharge occurrring 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, the owner never  received  from  the  DHCR  the  original
          overcharge complaint or subsequent Notice of Pending Default, and, 
          therefore, could not have submitted the rent records as requested 
          in the proceeding before the Rent Administrator.

          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) 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 ffiled 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






          BG110108RO
          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 of 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., Deb.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.

          Given that, in the instant case, the  subject  dwelling  unit  is
          located in the Second apartment, 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,  and,
          concommitantly, establishing the base rent as the rent charged on 
          April 1, 1980.  Since the rent charged on April 1, 1980  and  the
          rents  charged  subsequent  thereto  were  corroborated  in   the
          proceeding before the Rent Administrator by the submission therein 
          of  a  rental  history  dating  back  to  April  1,   1980,   the
          Administrator's application of the Section 42A default procedure in 
          establishing the base rent and  subsequent  lawful  stabilization
          rents was not warranted. 

          Further, in accordance with Section 421-a of the Real Property Tax 
          Law, the owner was permitted to increase,  annually,  the  lawful
          stabilization rent by 2.2 percent of the first lease rent,  which
          was $575.00, thereby establishing nine annual rent  increases  of
          $12.65 commencing with the first lease. In addition, the owner was 
          entitled    to    guideline    rent     increases     for     the
          September 1, 1979 vacancy lease and  September  1,  1982  renewal
          lease.  The Commissioner notes that, after November 19, 1982, the 
          2.2 percent annual increase, although part of the legal rent, could 



          not be included as a part of the base rent  for  the  purpose  of
          computing subsequent guideline rent increases. Accordingly, for the 
          period April 1, 1980 through August 31, 1985  considered  in  the












          BG110108RO
          Administrator's determination, there is no evidence that the tenant 
          paid any excess in rents lawfully allowed under the Section 421-a 
          rent program as alleged in said tenant's overcharge complaint.

          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 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.

          THEREFORE, in accordance with the Appellate Divisions  ruling  in
          JRD, and Section 421-a of the Real Property Tax Law, 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 under the Section 421-a rent program occurred.


          ISSUED:




                                                                          
                                                   JOSEPH A. D'AGOSTA
                                                   Deputy Commissioner


    

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