BL210105RO
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. BL210105RO
: DRO DOCKET NO. K3106757R
J.R.D. Mgmt. Corp., (CDR31730)
TENANT: Phyllis Worthy
PETITIONER :
------------------------------------X
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On December 7, 1987 the above-named petitioner-owner filed a Petition
for Administrative Review against an order issued on November 5, 1987
by the Rent Administrator, 10 Columbus Circle, New York, New York
concerning the housing accommodations known as 55 Linden Boulevard,
Brooklyn, New York, Apartment No. 3B wherein the Rent Administrator
determined that the owner had overcharged the tenant.
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 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 in March, 1984
of a rent overcharge complaint by the tenant, in which she stated that
she had commenced occupancy on October 11, 1979 at a rent of $300.00 per
month.
In answer to the tenant's complaint the current owner, who purchased the
building on May 16, 1985, made several requests for a copy of the
complaint.
In Order Number CDR 31730, which named as owner the company listed only
on the 1984 registration, the Rent Administrator determined that, due to
the owner's failure to submit a complete rental history, the tenant had
been overcharged in the amount of $3,776.05, 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 registered as such since 1985 alleges in
BL210105RO
substance that it never received a copy of the tenant's complaint, and
that it should have an opportunity to provide a full rental history.
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 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 (App. Div. 1st Dept. 1989), has issued a decision in direct
BL210105RO
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.
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 the April 1, 1980 rent was the $300.00 rent being paid by
the complainant. The subsequent lawful rents were $342.00 ($300.00 +
14%) per month from November 1, 1980 to October 31, 1982; $355.68
($342.00 + 4%) per month from November 1, 1982 to October 31, 1983;
$369.90 ($355.68 + 4%) per month from November 1, 1983 to October 31,
1984; and $403.20 ($369.90 + 9%) per month from November 1, 1984 to
October 31, 1986. Since these were the rents being charged the tenant,
no overcharge has been shown.
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 is permitted to pay off the arrears in 24
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 Division ruling in JRD, 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, revoked.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
BL210105RO
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. BL210105RO
: DRO DOCKET NO. K3106757R
J.R.D. Mgmt. Corp., (CDR31730)
TENANT: Phyllis Worthy
PETITIONER :
-------------------------------------X
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On December, 7, 1987 the above-named petitioner-owner filed a petition
for Administrative Review against an order issued on November 5, 1987 by
the Rent Administrator, 10 Columbus Circle, New York, New York
concerning the housing accommodations known as 55 Linden Boulevard,
Brooklyn, New York, Apartment No. 3B where in the Rent Administrator
determined that the owner had overcharged the tenant.
The Administrative Appeal is being determined pursuant to the provisions
of Section 2526.1 of the Rent stabilization Code.
The issue here in is whether the Rent Administrator's order 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 in March, 1984 of
a rent overcharge complaint by the tenant, in which she stated that she
had commenced occupancy on October 11, 1979 at a rent of $300.00 per
month.
In answer to the tenant's complaint the current owner, who purchased the
building on May 16, 1985, made several requests for a copy of the
complaint.
In order Number CDR 31730, which named as owner of the company listed
only on the 1984 registration, the Rent Administrator determined that,
due to the owner's failure to submit a complete rental history, the
tenant had been overcharged in the amount of $3,776.05, including
interest on the overcharged 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 registered as such since 1985 alleges in
BL210105RO
substance that it never received a copy of the tenant's complaint, and
that it should have an opportunity to provide a full rental history.
The Commissioner is of the opinion that this petition should be granted.
Section 42A of the former Rent Stabilization Code required 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, 1984 are to be processed pursuant to the Law or Code in effect on
March 31, 1984. [See Section 2525.1 (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
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 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 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 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
BL210105RO
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 id both rational and supported by the
Law and Legislative history of the Omnibus Housing Act.
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 the April 1, 1980 rent was the $300.00 rent being paid by
the complainant. The subsequent lawful rents were $342.00 ($300.00 =
14%) per month from November 1, 1980 to October 31, 1982; $355.68
($342.00 + 4%) per month from November 1, 1982 October 31 1983; $369.90
($355.68 + 4%) per month from November 1, 1983 to October 31, 1984; and
$403.20 ($369.90 + 9%) per month from November 1, 1984 to October 31,
1986. Since these were the rents being charged the tenant, no
overcharge has been shown.
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 is permitted to pay off the arrears in 24
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 Division ruling in JRD, 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, revoked.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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