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


    

TenantNet Home | TenantNet Forum | New York Tenant Information
DHCR Information | DHCR Decisions | Housing Court Decisions | New York Rent Laws
Disclaimer | Privacy Policy | Contact Us

Subscribe to our Mailing List!
Your Email      Full Name