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. CE210047RO
: DISTRICT RENT OFFICE
George Tutunjian, DOCKET NO. BI210050RP
TENANT: Audrey Guggenheim
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART AND MODIFYING RENT ADMINISTRATOR'S ORDER
On May 16, 1988, the above-named petitioner-owner filed a Petition for
Administrative Review against an order issued on April 29, 1988, by the
Rent Administrator, 10 Columbus Circle, New York, New York, concerning
the housing accommodations known as 719 Eighth Avenue, Brooklyn,
New York, Apartment No. 23, 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. (hereafter RSC)
The issue herein is whether the Rent Administrator's order was
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 the tenant stated
that she first moved to the subject apartment April 1, 1981 at a rental
of $452.00 per month. The tenant further submitted a rental history of
the subject apartment.
In Order Number CDR 26,680, the Rent Administrator terminated the
tenant' complaint without action because the tenant had vacate the
subject apartment on May 31, 1984.
On October 8, 1987, the Rent Administrator reopened the proceeding in
response to the tenant's written request forwarding a current address
and preceded to process the case on the merits under docket BI210050RP.
In answer to the tenant's complaint, the owner stated in substance that
improvements totaling $2842.68 were done in the apartment prior to the
tenant's occupancy on April 1, 1981 and submitted a rental history from
March 1, 1977 through February 28, 1979 and July 1, 1980 through May 31,
1984 including paid bills for improvements.
In Order Number ZBI210050RP, 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 $3,255.13 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
In this petition, the owner alleges in substance that the default was
not warranted since a complete rental history was submitted. With the
petition, the owner resubmitted copies of the leases submitted below.
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
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
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
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.
Section 2522.1 of the RSC states that legal regulated rents may be
increased or decreased only as specified in the code.
Section 2522 further details the various adjustments permitted to legal
regulated rents, among which are increases to reflect Rent Guidelines
Board orders for vacancy and renewal leases; fair market adjustment
after decontrol; individual apartment improvements/new equipment;
building-wide Major Capital Improvements and hardship increases as
approved by DHCR.
An examination of the records in this case discloses that the owner has
submitted in the proceeding below a prior lease commencing March 1, 1977
through February 28, 1979 at a rental of $260.00 executed by a prior
tenant (Arroyo); that rent control records on file with DHCR reveal that
decontrol report (R42) was filed with the Division of Rent Control
indicating a March 1, 1977 decontrol date and the initial renting of the
apartment to prior tenant Arroyo; that the Mach 1977 lease was the
initial stabilized lease at an initial rent of $260.00; that no
subsequent rental data or documentation for the period from the
expiration of the initial lease through the commencement of a renewal
lease for a subsequent prior tenant (Gomez) dated July 1, 1980 at a
rental of $305.25 was submitted by the owner either below or on appeal;
that neither the complainant nor any prior (on subsequent tenant) have
filed a fair market rent appeal; and that an increase of $71.07 for
improvements done prior to the complainant's occupancy was granted by
the Rent Administrator based on the owner's submission below of paid
bills totaling $2842.68.
The Commissioner is of the opinion that the use of the 42A default
method was not warranted since in the proceeding before the Rent
Administrator, the owner had submitted the initial rent stabilized lease
at the initial rent of $260.00 and verification that the March 1, 1977
lease was in fact the initial lease was on file with DHCR.
The Section 42A default procedure is used only where an owner is unable
to submit the initial or base date rent. In cases, where the base date
or initial rent is known, but there are gaps in the rental history, the
issue becomes whether the owner is entitled to collect guideline and/or
other increases above the initial rent for periods where there is a lack
of rental documentation.
In the instant proceeding, the owner has failed both below and on appeal
to either substantiate the actual rent paid on the April 1, 1980 base
date or to evince entitlement to any adjustments above the initial
regulated rent of $260.00 for the period subsequent to March 1, 1977
through March 31, 1980. Therefore, the Commissioner has determined the
base date rent on April 1, 1980 to be $260.00.
Taking the above factors into account, the Commissioner has recalculated
the lawful stabilization rents above the April 1, 1980 base rent of
$260.00 and amount of rent overcharge for the subject apartment,
including interest on the overcharge occurring on and after April 1,
1984. The lawful stabilization rents and amount of rent overcharge are
set forth on the amended rent calculation chart attached hereto and made
a part hereof.
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
This order may, 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, be filed and enforced in the same manner as a judgment.
THEREFORE, in accordance with the provisions of the Rent Stabilization
Law and Code, 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 lawful stabilization rents and the amount
of the rent overcharge are established on the attached chart which is
fully made a part of this order. The amount of the rent overcharge
through May 31, 1984 is $2,836.95.
A copy of this order is being sent to the current occupant of the
JOSEPH A. D'AGOSTA