EG 210003-RO; EG 210209-RT; BG 210350-RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                              JAMAICA, NEW YORK   11433

          APPEAL OF                               DOCKET NOS.: EG 210003-RO
                                                               EG 210209-RT
                 MANUEL MONTEMUINO, (OWNER),                   BG 210350-RO
                                                      (AC 230002-RT; 75254-G;
                                                      CDR 13008)
                                                      (ARL 08732-K; 79742-G; 
                                 PETITIONERS          CDR 13163) 41447     

                         NOS. EG 210003-RO AND EG 210209-RT
                                      IN PART,

          On July 3, 1990 and July 4,  1990  the  above  named  petitioners
          filed Petitions for Administrative Review (Docket Nos. EG 210003 
          RO and EG 210209-RT) against an order (Docket No.  BL  210047-RP)
          issued on May 30, 1990 by the District Rent Administrator,  92-31
          Union  Hall  Street,  Jamaica,  New   York   concerning   housing
          accommodations  known  as  Apartment  1A  at  277  Henry  Street,
          Brooklyn,  New  York  wherein  the  District  Rent  Administrator
          determined that the owner had overcharged the tenant.

          On  July  16,  1987  the  above-named  petitioner-owner  filed  a
          Petition for Administrative  Review  (Docket  No.  BG  210350-RO)
          against an order (Docket No.  41447)  issued  on  June  11,  1987
          wherein the District Rent Administrator terminated  the  tenant's
          rent  overcharge  and  lack-of-lease  complaints  regarding   the
          subject apartment and determined that the apartment contained one 

          As they contain one or more common grounds of law or fact,  these
          petitions are herein merged and decided in one order and opinion.

          The  issue  in  these  appeals  is  whether  the  District   Rent
          Administrator's orders were warranted.

          The applicable sections of the Law  are  Section  26-516  of  the
          Rent  Stabilization  Law  and  Section  2526.1(a)  of  the   Rent
          Stabilization Code.

          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 appeals.

          EG 210003-RO; EG 210209-RT; BG 210350-RO

          This  proceeding  was  originally  commenced  by  the  filing  in
          December, 1983 of a rent overcharge complaint (Docket N .  79742-
          G) by the tenant, in  which  he  stated  that  he  had  commenced
          occupancy on August 15, 1977  at  a  rent  of  $230.00        per
          month.  He later  filed  a  registration  objection  (Docket  No.
          000223) which was consolidated with that proceeding on  June  25,

          On February 13, 1986 an order was issued setting a  default  rent
          of $187.98 ($169.50 by the default formula plus  $18.48  for  new
          equipment  during  a  vacancy),  and  finding  an  overcharge  of
          $4,505.23 as of January 31, 1986.   The  owner  filed  an  appeal
          (Docket No. ARL 08732-K) against the order, contending  that  the
          wrong apartment was used for  comparability  and  that  increases
          should have been allowed for various improvements.

          In September, 1983  the  tenant  filed  an  overcharge  complaint
          (Docket No. 75254-G), which also claimed that  no  lease  was  in
          effect as of September 1, 1983 because the owner had offered only 
          a one-year lease rather than the 3-year lease  requested  by  the
          tenant.  On February 6, 1986 an order was issued terminating  the
          proceeding because a settlement had been reached by the tendering 
          of a 2-year renewal lease, and establishing a stabilized rent  of
          $386.07 [actually $306.07] per month.  The tenant filed an appeal 
          (Docket No. AC 230002-RT) against that order, contending that the 
          2-year lease  was  only  a  temporary  settlement  ordered  in  a
          harassment proceeding, to await the outcome of Docket N .  75254-

          The two appeals (Docket Nos. ARL 08732-K and AC  230002-RT)  were
          consolidated.   On  November  27,  1987  an  order   was   issued
          remanding the proceedings because of the inconsistent orders.

          The remanded proceeding was assigned  Docket  No.  BL  210047-RP.
          The owner was requested to submit evidence of  improvements  made
          just before the tenant commenced occupancy.  In an  order  issued
          on May 30, 1990 the Administrator used the  Division  of  Housing
          and Community Renewal's (DHCR's) default  procedure  to  set  the
          tenant's initial lawful rent at $203.48 ($185.00 plus $18.48  for
          improvements during  a  vacancy),  and  found  an  overcharge  of
          $984.06  as  of  May  31,  1990,  after  subtracting  arrears  of
          $1,541.28.    The   Administrator   disallowed    some    claimed
          improvements as being either normal maintenance or not adequately 

          In his petition (Docket No. EG 210003-RO) against that order, the 
          owner contends in substance that he does not  have  to  submit  a
          rental history for periods prior to April 1, 1980; and  that  the
          Administrator should have allowed the costs for the  installation
          of the improvements.

          In answer, the tenant asserts in  substance  that  the  DHCR  has
          appealed the court decision requiring only  four  years  of  rent
          records; that the facts in  that  court  decision  are  different
          since the case was "still pending after 1987", whereas the  order
          finding an overcharge in the present case was rendered  in  1986;
          that  the  1984  registration  contained  numerous  errors,   and
          therefore cannot said to have been served  and  filed;  that  the

          EG 210003-RO; EG 210209-RT; BG 210350-RO
          bills  and  affidavits  submitted  by  the  owner   are   clearly
          fraudulent; and that it was an error for the Administrator to use 
          the $292.33 rent of the one-year lease in the  rent  calculation,
          since the owner concedes that the lease was nullified  by  mutual

          In his petition (Docket No. EG 210209-RT) against  the  order  in
          Docket No. BL 210047-RP, the tenant contends  in  substance  that
          the Administrator should have ruled on  the  complaint  that  the
          owner had failed to offer a 3-year lease; that the one-year lease 
          commencing September 1, 1983 was signed  under  protest  and  not
          countersigned by the owner; that it was therefore never in effect 
          and should not have been used as the  basis  for  increasing  the
          legal rent; and that he should be refunded  the  excess  rent  he
          paid under duress from September 1, 1983 to April 1, 1984.

          In answer, the owner asserts in substance  that  J.R.D.  Mgt.  v.
          Eimicke remains good law; that the cost of  installation  of  the
          improvements should be allowed; and that he refunded  the  tenant
          $183.00 during the course of the proceeding.

          In December, 1984 the  tenant  filed  an  objection  (Docket  No.
          41447) to the apartment registration.  In an order issued on June 
          11,  1987  the  portions  of  the  objection  relating  to   rent
          overcharge and the lack of a written  lease  were  terminated  as
          being duplicative of Docket  Nos.  TC-075254-G  and  TC-079742-G,
          which were on appeal at the time.  The  Administrator  determined
          that the subject apartment contained one room.

          In its petition (Docket No. BG 210350-RO) against that order, the 
          owner contends in substance that the subject apartment contains a 
          kitchen nine feet by twelve feet with  a  window,  and  a  living
          room/bedroom twelve feet by fifteen feet.  With his petition  the
          owner has enclosed a diagram  of  an  L-shaped  room  essentially
          constituting an area twenty seven feet  long,  with  a  width  of
          twelve feet for approximately one  half  of  its  length  (living
          room/bedroom) and nine feet for the rest of its length (kitchen).

          The Commissioner is of the opinion that the petitions  in  Docket
          Nos. EG 210003-RO and EG 210209-RT should be granted in part, and 
          that the petition in Docket No. BG 210350-RO should be denied.

          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) to date and  to  produce
          such records to the DHCR upon demand.

          Section 26-516 of 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
          produce rent records for more than 4  years  prior  to  the  most
          recent registration and,  concomitantly,  established  a  4  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

          EG 210003-RO; EG 210209-RT; BG 210350-RO
          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 4 years prior to  April
          1, 1984 of their 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), 
          in cases involving rent  overcharge  complaints  filed  prior  to
          April 1, 1984.

          However, it has recently been held in the case of J.R.D. Mgt.  v.
          Eimicke, 148 A.D.2d 610, 539 N.Y.S.2d 667  (App.  Div.  2d  Dep't
          1989), motion for leave to reargue or for leave to appeal to  the
          Court of Appeals denied (App. Div. 2d Dep't, 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 4 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  Dep't  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 present 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.   The
          base rent is therefore the $243.00 rent being charged on April 1, 
          1980, regardless of how that particular  amount  was  arrived  at
          (improvements, etc.).  The tenant is incorrect in asserting  that
          the present situation differs significantly from JRD,  since  the
          present appeals mean that  the  issues  of  base  date  rent  and
          overcharges are still "pending."  

          However, the tenant is correct regarding the issue  of  a  3-year
          lease commencing September 1, 1983.  Materials  from  the  DHCR's
          Enforcement Bureau  indicate  that  the  two-year  lease  was  an
          interim  measure,  subject  to  a  differing  ruling   from   the
          Administrator.  While the Administrator  subsequently  calculated

          EG 210003-RO; EG 210209-RT; BG 210350-RO
          lawful rents based on a 2-year lease, the tenant appealed  it  in
          Docket No. AC 230002-RT.  The Administrator again utiliz d  a  2-
          year lease in Docket No. BL 210047-RP; the tenant has perpetuated 
          the issue by appealing that determination.   Because  the  tenant
          was entitled, for  a  lease  commencing  September  1,  1983,  to
          request and be given a 3-year renewal lease, the Commissioner has 
          restructured the length of that lease and the subsequent lease on 
          the amended rent calculation chart attached  hereto  and  made  a
          part hereof.  Because the  rent  being  charged  the  tenant  was
          reduced from $306.07 to $255.31 on March 1, 1986 until  at  least
          May 31, 1990 as a result of  a  DHCR  order,  the  owner  is  not
          considered to have waived the right to a higher rent now that the 
          lawful stabilization rent is being changed to  $306.07  for  that
          period.  As a result, the tenant owes arrears of $50.76 per month 
          for the period.  While the owner claims to have refunded  $183.00
          to the tenant, the Commissioner notes  that  the  $183.07  refund
          mentioned by the owner's attorney in the October 18, 1984  letter
          submitted in Docket No. 79742-G does not relate  to  any  arrears
          owed as a result of this order, since such arrears did not  start
          occurring until March 1, 1986, nearly a year and a half after the 
          refund referred to had already been made.  The owner is  directed
          to allow the tenant to pay off the arrears in  twenty-four  equal
          monthly  installments.   Should  the  tenant  vacate  after   the
          issuance of this order, or have previously vacated, said  arrears
          shall be payable immediately.

          Regarding  the  tenant's  contentions  that  the  one-year  lease
          commencing September 1, 1983 should not be effective to  increase
          the rent, and that he should be refunded the excess rent he  paid
          under duress from  September  1,  1983  to  April  1,  1984,  the
          Commissioner finds that since the tenant occupied  the  apartment
          with the protection of a  written  lease  (initially  a  one-year
          lease, changed to a 2-year lease as a result of  the  Enforcement
          proceeding, and now restructured to a 3-year term), the lease was 
          effective to increase the lawful  rent.   There  was  no  "excess
          rent" for the period from September 1, 1983  to  April  1,  1984,
          since the rent charged represented a  lawful  increase  over  the
          previous rent whether the lease was considered to have  been  for
          one year, two years or three years.

          Regarding the tenant's  contention  that  the  1984  registration
          cannot, because of numerous errors, said to have been served  and
          filed,  the  Commissioner  finds  that   the   service   of   the
          registration on the DHCR and the tenant, with  the  tenant  being
          given the opportunity to challenge it, satisfied the  requirement
          for initial registration.

          Regarding the owner's contention in Docket No. BG 210350-RO  that
          the subject apartment contains two rooms, the Commissioner  notes
          that the DHCR definition of a  "room"  requires  that  it  be  an
          enclosed area.  Neither of the diagrams submitted  by  the  owner
          indicate that the kitchen  area  is  separated  from  the  living
          room/bedroom area by a wall and doorway, so the kitchen area does 
          not constitute a separate room as defined by the DHCR.

          THEREFORE, in accordance with  the  Rent  Stabilization  Law  and
          Code, it is

          ORDERED, that the petitions in Docket Nos. EG  210003-RO  and  EG

          EG 210003-RO; EG 210209-RT; BG 210350-RO
          210209-RT be, and the same hereby are, granted in part; that  the
          Administrator's order in Docket No. BL 210047-RP be, and the same 
          hereby is, modified in accordance with this  order  and  opinion;
          that the petition in Docket No. BG 210350-RO  be,  and  the  same
          hereby is, denied and that the Administrator's  order  in  Docket
          No. 41447 be, and the  same  hereby  is,  affirmed.   The  lawful
          stabilization  rents  are  set  forth  on   the   attached   rent
          calculation chart, which is fully made a part of this order.

                                                  ELLIOT SANDER
                                                  Deputy Commissioner

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