BG210158RO
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.BG210158RO
: DRO DOCKET NO.TA09570
Merle Brown, TENANT:Sheilah Verrett
PETITIONER :
------------------------------------X
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On July 3, 1987, the above-named owner filed a Petition for
Administrative Review against an order issued on May 29, 1987 by
the Rent Administrator concerning the housing accommodations known
as 42 Hawtherne Street, Brooklyn, New York, Apartment No. 1R
wherein the Rent Administrator determined that the owner was in
default due to its failure to submit the requisite rental history.
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 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
23, 1981 of a rent overcharge complaint by the tenant.
In answer to the tenant's complaint, the owner submitted rent
records dating back to April 1, 1980.
In Order Number TA09570, 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 $1996.53, including excess security and interest on that portion
of the overcharge occurring 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 submitted all the rent records it had in its
possession.
BG210158RO
BG210158RO
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 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 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 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
BG210158RO
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 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, 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 of the
requisite 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.
Furthermore, for the period April 1, 1980 through December 1, 1985
used in the Administrator's calculations, there is no evidence that
the tenant paid any excess in rents lawfully allowed under the
applicable rent guidelines.
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 twelve 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, it is
ORDERED, that this petition for administrative review be, and the
same hereby is, granted, that the order of the Rent Administrator
BG210158RO
be, and the same hereby is, revoked, and it is found that no rent
overcharge occurred.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
|
