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.CC210390RO
Caton BMT Associates/ : DRO DOCKET NO.
Leonard Spodek K3107751R, CDR 32799
PETITIONER : Covington
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
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.
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
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 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.
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.
Therefore, the Rent Administrator's order finding a rent overcharge must
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
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, 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.
JOSEPH A. D'AGOSTA