OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                                DOCKET NO.BI210218RO
                                              :    DRO DOCKET NO.TC080488G
               Flagg Court Realty                  TENANT:Edward Dunn     
                               PETITIONER     :


          On September 17, 1987, the above-named owner filed a Petition for 
          Administrative Review against an order issued on August 18, 1987 by 
          the Rent Administrator concerning the housing accommodations known 
          as 160 72nd Street, Brooklyn, New York, Apartment No. 786 wherein 
          the Rent Administrator determined that the complainant tenant was 
          overcharged in rent.

          The Administrative Appeal is being  determined  pursuant  to  the
          provisions of Section 2526.1 of the Rent Stabilization Code.

          The issues herein are  whether  the  Rent  Administrator's  order
          finding overcharges to the tenant should be reversed and  whether
          the Rent Administrator's calculation of the lawful  stabilization
          rents properly omitted a certain charge for air conditioner usage 
          and included the correct amount of a Major Capital Improvement rent 

          The Commissioner has reviewed all of the evidence in the record and 
          has carefully considered that portion of the record relevant to the 
          issues raised by the administrative appeal.
          This proceeding was originally commenced by the filing on November 
          16, 1983 of a rent overcharge complaint by the tenant.

          In answer to the tenant's complaint, the owner submitted a rental 
          history dating back to December 1, 1976.

          In Order Number TC080488G, the Rent Administrator determined that 
          the complainant tenant was  overcharged  in  rent  in  amount  of
          $772.80, 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  Rent
          Administrator's order and contends in  substance  that  the  Rent
          Administrator's calculation of the lawful stabilization rents did 
          not reflect a charge of $8.17 for air conditioner usage from July 
          1978 and, in addition, the correct dollar amount in rent increase 
          for Major Capital Improvements which the owner states  should  be
          $9.55 rather than $8.03.  The owner attached a copy of the M.C.I. 

          The tenant filed his response to the petition on December 18, 1987 
          wherein the tenant states that the petition should be denied.  The 
          tenant contends that, among other things, he is being overcharged 
          in rent and that his base rent reflects a charge for the usage of 
          an air conditioner which the tenant asserts he has  never  owned.
          The tenant cited other matters which do not address those  issues
          raised by the owner in the petition  and,  therefore,  cannot  be
          considered herein.

          The Commissioner is of the opinion that this petition  should  be
          granted in part.

          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., Dec. 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 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 and precluding consideration of rents collected prior 
          thereto.  Since the determination of the lawful stabilization rent 
          as of April 1, 1980 and  lawful  stabilization  rents  subsequent
          thereto must be based only on those rent records dating  back  to
          April 1, 1980, the petitioner's statements concerning the amount of 
          M.C.I rent increase  as  determined  in  an  order  of  the  Rent
          Administrator issued on March 27, 1980 and an air conditioner usage 
          charge occurring in July, 1978, where a  determination  of  these
          matters would warrant an examination of rent records prior to April 


          1, 1980, were not factors affecting this determination, although it 
          is noted that the April 1, 1980 base date rent established herein 
          already included the amount of $9.55 for Major Capital Improvements 


          and the amount of $8.17 for air conditioner usage. 

          The Commissioner notes that the owner submitted to the Division in 
          the proceeding before the Rent Administrator documentation stating 
          a credit to the tenant's rent for a certain amount it  deemed  to
          have overcharged the tenant.  However, the owner did not  produce
          sufficient evidence substantiating that it had in fact credited the 
          tenant for such amount.  Further, the tenant denied accepting any 
          rent credits.

          The Commissioner has re-calculated the lawful stabilization rents 
          dating back to April 1, 1980, the Base Rent Date.  The Commissioner 
          finds that, for the period November 15, 1981 through May 30, 1984, 
          the tenant was overcharged in rent, but that the amount  in  rent
          overcharge has been reduced.  The lawful stabilization rents  and
          the amount of rent overcharges, including interest on overcharges 
          occurring on an after April 1, 1984, are set forth on the amended 
          rent calculation chart attached hereto and made a part hereof.

          The Rent Administrator's order is modified in accordance herewith.

          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.

          The Commissioner has determined in this Order and Opinion that the 
          owner collected overcharges of $750.18.  Upon expiration  of  the
          period for seeking review of this Order and Opinion  pursuant  to
          Article Seventy-eight of the Civil Practice Law and Rules, not in 
          excess of twenty percent per month of the overcharge may be offset 
          against any rent thereafter due  the  owner.   Where  the  tenant
          credits the overcharge, the tenant  may  add  to  the  overcharge
          interest at the rate payable on a judgment pursuant to Section 5004 
          of the Civil Practice Law and Rules, from the issuance date of the 
          Rent  Administrator's  order  to  the  issuance   date   of   the
          Commissioner's order.


          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 in part,  that  the  order  of  the  Rent
          Administrator be, and the same hereby is, modified in  accordance
          with this Order and Opinion.  The lawful stabilization rents  and
          the amount of rent overcharge are established on the attached chart 
          which is fully made a part of this order.  The amount of the rent 
          overcharge through November 30, 1986 is $750.18.


                                                   JOSEPH A. D'AGOSTA
                                                   Deputy Commissioner


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