STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.BI210218RO
: DRO DOCKET NO.TC080488G
Flagg Court Realty TENANT:Edward Dunn
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART AND MODIFYING THE ORDER OF THE RENT ADMINISTRATOR
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
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
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
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