STATE OF NEW YORK
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

      APPEAL OF                              DOCKET NO. CE210047RO

                                          :  DISTRICT RENT OFFICE
           George Tutunjian,                 DOCKET NO. BI210050RP
                                             TENANT: Audrey Guggenheim        

                            PETITIONER    : 


      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 
      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 

      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 
      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 
      subject apartment.


                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner


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