DB 410110 RO
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. DB 410110 RO
: DISTRICT RENT ADMINISTRATOR'S
Michael Power, DOCKET NO. L 3110104-R
TENANT: Lenore Anastasio
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On February 8, 1989, the above-named owner filed a petition for
administrative review of an order issued on January 5, 1989, by a
District Rent Administrator concerning the housing accommodations known
as 122 West 71st Street, New York, New York, Apartment No. 3, wherein
the Administrator determined that the owner had collected excess rents
from the tenant.
The Commissioner notes that this proceeding was filed prior to April 1,
1984. Sections 2526.1 (a) (4) and 2521.1 (d) of the Rent Stabilization
Code (effective May 1, 1987) governing rent overcharge and fair market
rent proceedings provide that determination of these matters be based
upon the law or code provisions in effect on March 31, 1984. Therefore,
unless otherwise indicated, reference to Sections of the Rent
Stabilization Code (Code) contained herein are to the Code in effect on
April 30, 1987.
The Commissioner has reviewed all of the evidence in the record and has
carefully considered that portion of the record relevant to the issues
raised by the administrative appeal.
This petition was commenced on February 14, 1984 by the filing of an
overcharge complaint. The tenant stated, among other things, that she
was told that the prior tenant was rent controlled, and that she was
never presented with a rental history. She requested that her rent be
On March 20, 1984, the owner was notified that a complaint had been
filed and he would be "... required to produce rent records for the
subject apartment dating back at least to June 30, 1974 or the date on
which the apartment first became subject to rent stabilization, if
later." The notice went on to advise the owner "... that discarding
such records before or after April 1, 1984 will be done at your own
Subsequently, the Administrator converted the proceeding to a fair
market rent appeal, notified the owner of his opportunity to submit
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comparability data, and asked the owner to submit proof of any alleged
vacancy improvements in the subject apartment.
On October 3, 1988, the owner advised the Division of Housing and
Community Renewal (DHCR) that he did not keep records for such a lengthy
period of time. Accordingly, he acknowledged that he could not produce
any leases, rent ledgers or proof of the vacancy improvements he made in
the subject unit immediately before this tenant took occupancy.
In the order here under review, the Administrator established a fair
market rent of $241.07 by using the special guidelines only and did not
allow for any increase for vacancy improvements. This order was based
on the owner's failure to supply the agency with any of the necessary
In his petition for administrative review, the owner submits a variety
of receipts for alleged vacancy improvements in the subject apartment.
The owner offers the explanation that a death of the principal owner of
the subject premises and a later death of a former managing agent of the
subject premises has made the retrieval of prior records difficult.
In her answer to the petition, the tenant notes that the owner took over
five years to produce these receipts for the vacancy improvements. In
the alternative, the tenant presents a point-by-point rebuttal of the
alleged vacancy improvements by noting, among other things, errors in
In a supplemental submission, the owner asserts, among other things,
that DHCR could not convert this overcharge complaint to a fair market
rent appeal because the statutory requirements for a fair market rent
appeal had not been met by the tenants complaint, i.e., the tenant
failed to allege that the initial legal regulated rent exceeded the fair
market rent. The owner also asserts that he was prejudiced by the
DHCR's delay in processing the case, specifically by the delay in
requesting proof of service of a DC-2 notice. Further, the owner
asserts that the records requested by the Administrator were more than
four years old, and the owner was not required to retain records more
than four years. The owner cites the case of J.R.D. Management Corp. v.
Eimicke, 148 A.D. 2d 610, 539 N.Y.S. 2d 667 (App. Div. 2d Dept., 1989)
to support his claim.
After careful consideration, the Commissioner is of the opinion that
this petition should be denied.
The owner's claim that the DHCR had no right to convert this proceeding
to a fair market rent appeal is without merit. Although the tenant used
the complaint form normally used for an overcharge, it is apparent from
the tenant's complaint that the tenant wished to challenge the initial
legal regulated rent. The tenant specifically stated that she was the
first stabilized tenant and that she questioned the lawfullness of her
initial rent and wanted her rent verified. The Commissioner finds that
the tenant's fair market rent appeal is not materially defective because
of the tenant's failure to allege that the rent exceeded the fair market
rent for the subject apartment. Such allegation is implicit in the
tenant's complaint. Accordingly, the Administrator acted properly by
processing this case as a fair market rent appeal.
Further, the Commissioner finds that the Administrator correctly
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required the owner to produce documentation that was more than four
The initial notice sent to the owner in September 1984 clearly advised
the owner regarding his obligation to retain and produce records. In
fact, that notice advised the owner of his obligation to retain records
from June 30, 1974.
Similarly, the Commissioner finds that Administrator correctly required
the owner to produce proof of service of the DC-2 on the tenant despite
the fact that it was more than four years old. The owner must prove
that the first stabilized tenant after vacancy decontrol had a full
opportunity to challenge the initial rent.
The Commissioner is of the opinion that the JRD case is not applicable
in this proceeding. The change effected by Section 14(g) of the Omnibus
Housing Act and Section 26-516(g) of the Rent Stabilization Law, as
applied in the JRD case, only involves rent overcharge proceedings, and
does not apply to fair market rent appeals. Section 26-513 of the Rent
Stabilization Law, which deals with fair market rent appeals, continues
to provide for determination of the fair market rent from the date of
the initial stabilized tenancy. In this case, the Administrator
properly established the fair market rent as of June 1, 1979, the date
of commencement of the initial stabilized lease.
Additionally, the Commissioner notes that the JRD case is applicable in
the Second Department only. This proceeding is in the First Department
where the case of Lavanant v. DHCR, 148 A.D. 2d 185, 544 N.Y.S. 2d 331
(App. Div. 1st Dept. 1989) is the determinative authority.
Finally, the Commissioner will not accept the submitted documents
purported to validate alleged vacancy improvements. These documents
were submitted for the first time at the administrative review level.
The owner's explanation for the failure to locate these documents for
over five years is insufficient. Clearly, the failure to produce these
documents for this extended period of time is evidence of a lack due
diligence by the owner.
THEREFORE, in accordance with the Rent Stabilization Law and Code, it is
ORDERED, that this petition be, and the same hereby is, denied, and
that the Rent Administrator's order be, and the same hereby is,
JOSEPH A. D'AGOSTA