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.CB110372RO
Winston House Associates : DISTRICT RENT OFFICE
TENANT: Maureen Mc Donagh
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
IN PART AND MODIFYING RENT ADMINISTRATOR'S ORDER
On February 5, 1988, the above-named petitioner-owner filed a Petition
for Administrative Review against an order issued on January 20, 1988,
by the Rent Administrator, 10 Columbus Circle, New York, concerning the
housing accommodations known as 167-10 Crocheron Avenue, Apartment 3-0,
Flushing, New York, 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
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. The tenant had commenced occupancy in
September 1978 at a rent of $220.00.
In answer to the tenant's complaint, the owner stated that when it
purchased the subject premises in June 1980, it had obtained only
current leases. The owner stated also that the complainant was the
second stabilized tenant in the subject apartment but that it had no
information on the first statilized tenant. With its answer, the owner
submitted a current rent roll, a copy of the rent control registration
card, the Landlord's Report of Statutory Decontrol(R-42) and the
complainant's lease history.
The owner was notified that failure to submit a complete rental history
would result in a default.
In the order here under review, 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 $3,418.00 inclusive of
excess security plus interest on the overcharge occuring on or after
April 1, 1984.
In this petition, the owner contends in substance that it did not
default as it submitted all the rent records it had.
Although afforded the opportunity to do so, the tenant did not respond
to the petition.
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 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
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. An examination of the rent records
from April 1, 1980 discloses that no rent overcharge occurred at that
time. However, examination of subsequent rent records discloses that an
overcharge was collected beginning September 1, 1983 where although the
lease recites the correct rental amount ($283.14), the owner (see RR-1
and rent roll submitted by the owner) and the tenant concur that the
actual rent paid was $294.20.
Accordingly, the Commissioner has modified the Administrator's
calculations in the rent calculation chart attached hereto and fully
made a part of this order.
The Commissioner establishes the legal stabilized rent at $315.96 as of
August 31, 1986. The Commissioner has determined in this order and
Opinion that the owner collected overcharges of $444.57. Upon
expiration of the period for seeking review of this Order and Opinion
pursuant to Article 78 and the Civil Practice Law and Rules, not in
excess of twenty percent per month of the overcharge may be offset
against any rent thereafter due the owner. Where the tenant credits the
overcharge, the tenant may add to the overcharge interest at the rate
payable on a judgment pursuant to Section 5004 of the Civil Practice Law
and Rules from the issuance date of the Rent Administrator's order to
the Commissioner's order.
The owner is further 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 increases.
THEREFORE, in accordance with the Appellate Division ruling in JRD, it
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
JOSEPH A. D'AGOSTA