CD 210141 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



      ------------------------------------X 
      IN THE MATTER OF THE ADMINISTRATIVE :  ADMINISTRATIVE REVIEW
      APPEAL OF                              DOCKET NO. CD 210141 RO

                                          :  DISTRICT RENT ADMINISTRATOR'S
           Michael Herman,                   DOCKET NO. K 3101725 RT

                                             TENANT: Lillian Cardo            
              

                               PETITIONER : 
      ------------------------------------X                             


      ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW IN PART
                     AND MODIFYING THE ADMINISTRATOR'S ORDER


      On April 20, 1988, the above-named owner filed a petition for 
      administrative review of an order issued on April 4, 1988, by a District 
      Rent Administrator concerning the housing accommodations known as       
      1031 Lorimer Street, Brooklyn, New York, Apartment No. 11, wherein the 
      Rent Administrator determined that the owner had overcharged the tenant.

      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 commenced by the filing of a rent overcharge 
      complaint on March 28, 1984.  The tenant stated, among other things, 
      that she asked to see a lease history, but the owner refused to comply. 

      In answer to the tenant's complaint, the owner stated, in substance, 
      that that the subject apartment was decontrolled in April, 1976 and 
      submitted a rent ledger for 1977 to verify the base date rent.  His 
      answer also stated the rental history of the subject unit.  The owner's 
      recitation of the rental history and the tenant's recitation of the 
      rental history were not identical.

      In the order here under review, the Administrator found that the record 
      contained a complete rental history.  In the calculations the 
      Administrator used the tenant-supplied rental figures and determined 
      that the lawful stabilization rent was $265.43 for the period of March 
      1, 1982 through February 28, 1985.  The overcharges were $5,030.35 
      including interest on post-April 1, 1984 overcharges and excess 
      security.


      In his petition for administrative review, the owner states that the 
      Administrator erred in the calculations by relying on incorrect rental 







          CD 210141 RO

      figures.  The owner submits the lease of the prior tenant and a lease of 
      the current tenant for the period of March 1, 1982 to February 28, 1985 
      to document his claim.

      In her answer to the petition, the tenant reiterated the allegations 
      made below.

      After careful consideration, the Commissioner is of the opinion that 
      this petition should be granted in part and that the Administrator's 
      order should be modified.
           
      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 


          CD 210141 RO

      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.

      In this case, an examination of the rental history from April 1, 1980, 
      discloses that the April 1, 1980 rent was $245.00.  The evidence shows 
      that this rent was raised on March 1, 1982 to $285.82.  The tenant- 
      supplied figure of $385.82 was clearly incorrect.  The Administrator 
      erred is using the tenant-supplied figure in the calculations.

      However, a small overcharge did occur as indicated on the attached 
      calculation chart which is made part and parcel of this order.

      Based on the foregoing, a total overcharge of $65.68 occurred from      
      March 1, 1982 to February 28, 1985 including interest on the overcharge 
      occurring on and after April 1, 1984 and excess security.

      Because this determination concerns lawful rents only through           
      February 28, 1985, the owner is cautioned to adjust subsequent rents to 
      an amount no greater than that determined by this order plus any lawful 
      increases, and to register any adjusted rents with this order and 
      opinion being given as the explanation for the adjustment.

      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.

      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 of the overcharge per month may be 
      offset against any rent thereafter due the owner.


      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 in part, and, that the order of the Rent 
      Administrator be, and the same hereby is, modified in accordance with 
      this order and opinion.  The amount of the rent overcharge through      
      February 28, 1985 is $65.68.







          CD 210141 RO


      ISSUED:



                                                                    
                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner




                 































    

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