DK41O271RO
                             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. DK410271RO

      Townhouse Management Company,       :  DISTRICT RENT OFFICE
                                             DOCKET NO. TA10868
                                            
                                             TENANT: Bruce Rathus             
             
                            PETITIONER    : 
      ------------------------------------X                             

           ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
                     AND MODIFYING THE ADMINISTRATOR'S ORDER

      On November 28, 1989, the above-named current owner filed a petition for 
      administrative review of an order issued on October 24, 1989 by the Rent 
      Administrator concerning the housing accommodations known as  144 East 
      22 Street, Apartment 6F, New York, New York, wherein the Administrator 
      determined that the owner had collected excess rent from the tenant.

      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 proceeding was commenced by the filing of a fair market rent 
      adjustment application in December of 1982.  The tenant had taken 
      occupancy of the subject apartment on November 1, 1982 at a monthly 
      rental of $500.00.  Included with his application was a copy of the DC-2 
      notice which had been served upon the tenant less than ninety days 
      before the filing of this application.

      In February of 1983, the prior owner (Meko Holding, Inc.) submitted an 
      answer which included rental data on the "F" and "C" lines of 
      apartments. 

      Subsequently, the current owner was also served with notice of this 
      proceeding and was given an opportunity to answer and submit  
      comparability data.

      In the current owner's answer submitted October 2, 1989, it was asserted 
      that because of the case of J.R.D. Management Co. v. Eimicke, 148 A.D. 
      2d. 610, 539 N.Y.S. 2d 667 (App. Div. 2d Dept., 1989) the owner "... is 
      required to submit rent records for the four (4) years prior to the last 
      registration."  The owner concluded that the only records it was 
      required to submit were for 1985 through 1989.   The owner submitted the 
      leases for the subject apartment from November 1, 1982.

      In the Administrator's order, it was determined that none of the 
      apartments offered by the prior owner for use in a comparability study 
      were usable because they were either rent controlled or not decontrolled 
      contemporaneously with the subject apartment.   Accordingly, the 
      Administrator used the Special Fair Market Rent Guidelines only to 







          DK41O271RO

      determine the fair market rent.  The Administrator adjusted the initial 
      legal regulated rent by establishing a fair market rent of $399.56 per 
      month effective November 1, 1982, the date of ten commencement of the 
      initial rent stabilization lease.  The total of excess rent collected by 
      the owners was $6,531.60 for the period of November 1, 1982 through 
      October 31, 1987.  Finally, the Administrator ruled that each owner was 
      responsible only for that portion of the excess rent that it actually 
      collected.

      In its petition for administrative review, the current owner alleges 
      that the Administrator failed to consider the J.R.D. case in making his 
      determination; that because of J.R.D. records more than four years old 
      need not be retained or produced by the owner; and that the lawful rent 
      should be based on the tenant's April 1, 1984 rent of $535.00 per month.

      The Commissioner is of the opinion that this petition for administrative 
      review should be denied.
       
      The Commissioner is of the opinion that the J.R.D. case is not 
      applicable to this proceeding.  The J.R.D 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 the determination of fair 
      market rent appeals from the date of the initial stabilized tenancy.  In 
      addition, regarding the submission of comparability data, it is noted 
      that the owner had the option of submitting either June 30, 1974 data or 
      post-June 30, 1974 data.

      Also, since the issuance of the decision in J.R.D, 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 finding that the DHCR may properly require an owner to submit 
      complete rent records, rather than records for just four years.  The 
      Lavanant decision is controlling in the instant case as the subject 
      apartment is located in the First Department.

      The Commissioner notes that the Administrator's order contains two 
      typographical errors which should be corrected.  Namely, in each of the 
      last two paragraphs on page 2 of the Administrator's order, the 
      effective date is listed as November 1, 1983.  The correct effective 
      date of the Administrator's order should have been November 1, 1982.  
      The Administrator's order should be amended to reflect the above.

      If the owner does not take appropriate action to comply with this order 
      within sixty (60) days, the tenant may seek to enforce this order in a 
      court of competent jurisdiction. 

      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 determined by this order plus any lawful 
      increases.  A copy of this order is being sent to the current tenant of 
      the subject apartment.

      THEREFORE, in accordance with the provisions of the Rent Stabilization 


          DK41O271RO

      Law and Code, it is

      ORDERED, that this petition for administrative review be, and the same 
      hereby is, denied, and, the order of the Rent Administrator be, and the 
      same hereby is, modified in accordance with this order and opinion

      ISSUED:



                                                                    
                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner





    

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