CA 210147 RO
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.: CA 210147 RO
DISTRICT RENT OFFICE
Ronald J. and Evelyn Mc Bride, DOCKET NO.: K-3104911 RT
TENANT: Marsha Lazarus
PETITIONER
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ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On January 29, 1988, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
December 31, 1987, by the Rent Administrator, Gertz Plaza,
Jamaica, New York, concerning the housing accommodations known as
888 Carroll Street, Brooklyn, New York, Apartment No. 2, 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 and a fair market rent
adjustment application by the tenant. The tenant stated that she
first moved to the subject apartment in February 1980 and
submitted a rental history from that date.
In answer to the tenant's complaint, the owner stated in
substance that it agreed with the rental history submitted by the
tenant, that the subject premises was never rent controlled and
that no rent overcharge had occurred.
In Order Number CDR 32,251, 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
$4810.18 and directed the owner to refund such overcharge to the
tenant as well as to reduce the rent. It is noted that although
the Rent Administrator stated in the order that the owner had
submitted a complete rental history, the amount of the overcharge
was in fact determined based on the failure to submit a rental
history.
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In this petition, the owner contends in substance that it charged
the proper rent to the tenant.
In answer to the owner's petition, the tenant contends in
substance that the Rent Administrator's order was warranted.
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
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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.
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. An
examination of the rent records from April 1, 1980 discloses that
no rent overcharge occurred. Therefore, the Rent
Administrator's order finding a rent overcharge must be revoked.
With regard to the tenant's fair market rent adjustment
application, an examination of the records for the subject
premises discloses that the premises was never subject to rent
control but was continuously rent stabilized. Accordingly, the
tenant was not entitled to file a fair market rent adjustment
application and such application was properly not considered by
the Rent Administrator.
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, that the order of the Rent
Administrator be, and the same hereby is, revoked, and it is
found that no rent overcharge occurred.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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