BH210147RO
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. BH210147RO
Barhite & Holzinger, Inc., : DRO DOCKET NO. K3104894R
TENANT: Susan Jamison
PETITIONER :
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On August 28, 1987, the above-named owner filed a Petition for
Administrative Review against an order issued on July 24, 1987, by a
Rent Administrator, concerning the housing accommodations known as 330
Lenox Road, Brooklyn, New York, Apartment No. 7C, wherein the Rent
Administrator determined that the owner had overcharged the tenant.
This proceeding was originally commenced by the filing in March, 1984,
of a rent-overcharge complaint by the tenant. In answer to the tenant's
complaint, the owner submitted a rental history from 1977 onward.
In Order Number CDR40,016, the Rent Administrator determined, due to the
owner's failure to submit a complete rental history, that the tenant had
been overcharged in the amount of $6,565.96 including interest on the
overcharge occurring on and after April 1, 1984, and directed the owner
to refund such overcharge to the tenant as well as to reduce the rent.
In this petition, the owner alleges in substance that its principal
bought the subject premises more than five months after the tenant had
filed her complaint, that it first got notice of this proceeding in July
of 1986, that it was not required to keep rental records for any time
prior to four years before the most recent registration, that having
duly registered the apartment in 1985, it was obligated only to maintain
such records from March 30, 1981 onwards, that it therefore "should not
have been defaulted due to an alleged failure to 'provide a full rental
history for the subject apartment' as maintained in the Order under
review," and that the "de minimis" overcharge herein originated with the
lease commencing on May 1, 1982, in which the lawful rent was exceeded
by $3.51.
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
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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 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 (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.
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, an examination of the rental history from April 1, 1980,
discloses: that petitioner has correctly stated that no overcharge
appeared until the aforementioned $3.51, starting on May 1, 1982; that
the next twelve-month lease contained a monthly overcharge of $3.65; and
that under the next 24-month lease the figure was $3.91.
Based on the foregoing, a total overcharge of $222.03 occurred from
May 1, 1982 to August 31, 1986, including interest on the overcharge
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occurring on and after April 1, 1984, and excess security.
(The Commissioner need not comment on petitioner's contention that the
instant inquiry should not go further back than March 30, 1981, as (all
the overcharge herein having occurred after that date) a ruling on that
contention would have no effect on the result herein.)
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
increases.
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
24 equal monthly installments. Should the tenant vacate or have already
vacated, said arrears shall be payable immediately.
Upon the expiration of the period in which the owner may institute a
proceeding pursuant to Article 78 of the Civil Practice Law and Rules,
not in excess of twenty percent per month of the total overcharge herein
may be offset against any rent thereafter due the owner.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this petition for administrative review be, and the same
hereby is, granted, and that the order of the Rent Administrator be, and
the same hereby is, modified in accordance with this order and opinion.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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