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

      ------------------------------------X 
      IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
      APPEAL OF                              DOCKET NO. BH210147RO

           Barhite & Holzinger, Inc.,     :  DRO DOCKET NO. K3104894R

                                             TENANT: Susan Jamison            
              
                            PETITIONER    : 
      ------------------------------------X                             

          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 


          BH210147RO

      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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