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.CC210390RO
                                                                     
       Caton BMT Associates/              :  DRO DOCKET NO.
       Leonard Spodek                        K3107751R, CDR 32799 
                                                                              
                                             TENANT:Pamela Downes-        
                            PETITIONER    :         Covington
      ------------------------------------X                             

          ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW


      On March 19, 1988 the above-named petitioner-owner perfected the filing 
      of a Petition for Administrative Review against an order issued on March 
      8, 1988 by the Rent Administrator, 10 Columbus Circle, New York, New 
      York concerning the housing accommodations known as 1829 Caton Avenue,  
      Brooklyn, New York, Apartment No. 2E 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 by the tenant, who stated that she had 
      commenced occupancy on March 1, 1979 at a rent of $290.00 per month.

      In answer to the tenant's complaint, the owner stated in substance that 
      it had leases only for the complainant.                            

      In Order Number CDR 32799 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 $3,161.66, and directed the owner to 
      refund such overcharge to the tenant as well as to reduce the rent.

      In this petition, the owner contends in substance that it did not 
      default as it submitted all the rent records it had; that by stipulation 
      with the Attorney General it was not required to submit rent records 
      prior to 1979; and that there had been no overcharge.



      CC210390RO









      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 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 right 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.







      CC210390RO


      Since the issuance of the decision in JRD, the Appellate Division, First 


      CC210390RO

      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.

      The Commissioner notes that the complainant has vacated.

      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 
      increases.

      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.  The lawful stabilization rent is $356.11 per month in the 
      lease from March 1, 1983 to February 28, 1986.


      ISSUED:



                                                                    
                                        JOSEPH A. D'AGOSTA
                                        Deputy Commissioner





    

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