EB610160RO
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.EB610160RO
: DRO DOCKET NO.TA011160
New Dawn Sunrise L.P. TENANT:Geraldine Ocasio
PETITIONER :
------------------------------------X
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On February 12, 1990 the above-named petitioner- owner filed a
petition for Administrative Review against an order issued on
January 10, 1990 by the Rent Administrator, 92-31 Union Hall
Street, Jamaica, New York concerning the housing accommodation
known as 2257 University Avenue, Bronx, New York, Apartment 2E,
wherein the Administrator determined that the owner had overcharged
the tenant. The petition is deemed as timely filed since the post
mark date on the petition on February 12, 1990. It is noted that
a Civil court decision dated October 23, 1993 under Index
No.61847/91 incorrectly held that the petition was not timely filed
using a February 20, 1990 filing date of the petition- this is the
date stamp of receipt by the DHCR and not the post mark filing
date.
The Commissioner has reviewed all of the evidence of record and has
carefully considered that portion of the record relevant to the
issues raised in the Administrative Appeal.
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 tenant commenced this proceeding in April 1983 by filing a Fair
Market Rent Appeal (hereinafter FMRA).
In answer, the owner submitted an incomplete lease history,
neglecting to submit a lease for the period 1973-September 1, 1975.
The owner stated that it had purchased the subject building in
August 1982 and that after examining the records received from the
prior owner, it knew nothing about an overcharge.
In the order here under review, applying court approved default
procedure, the Administrator established the lawful rent at $289.98
as of June 1, 1983 through May 31, 1986 and determined that the
owner had overcharged the tenant in the amount of $9,235.35
inclusive of excess security and treble damages.
In its appeal, the owner contends that the Administrator's order is
incorrect and should be reversed on the following grounds: 1) the
Administrator should not have converted the correctly dismissed
Fair Market Rent Appeal to an overcharge complaint; 2) pursuant to
the decision in JRD V. Eimike, the Administrator erred in requiring
the owner to provide a rent history prior to April 1, 1980; 3)
rent schedules provided by the owner in lieu of a 1973-1974 lease
should have been accepted instead of defaulting the owner; 4) the
agency's negligence in allowing six years to elapse before
rendering a determination has resulted in an onerous burden for the
owner.
Although given the opportunity to do so, the tenant did not reply
to the petition.
The Commissioner is of the opinion that this petition should be
denied.
The FMRA was properly dismissed by the Rent Administrator on the
basis that the subject apartment was vacancy decontrolled between
July 1, 1971 and December 31, 1973. However the Rent Administrator
was authorized to convert the FMRA to an overcharge complaint and
to process it as such affording the owner on opportunity to submit
a complete rental history including leases on contemporaneous rent
ledger from the June 30, 1974 base date. This the owner failed to
do.
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
EB610160RO
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 casess. 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 rights 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 leabe 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 accommodation is located in
the first Department, the Commissioner is constrained to follow the
ruling in Lavanant. Accordingly, the Administrator did not err in
requiring the owner to produce a complete rental history.
EB610160RO
With respect to the use of rent schedules in lieu of a lease, the
Commissioner notes that the schedules submitted by the owner in
connection with the FMRA are not an adequate substitute for the
missing lease or contemporaneous rent ledger for the period from
June 30, 1974 to September 1, 1975.
The Commissioner notes that the length of time required to process
the instant complaint did not cause the overcharge which the owner
could have investigated while the complaint was pending and thereby
relieved some of the burden.
The Commissioner has determined in this order and opinion that the
present owner collected overcharges of $6134.10 and the prior owner
collected overcharge of $3,101.25. This Order may, upon expiration
of the period for seeking review of this Order and Opinion pursuant
to Article Seventy-eight of the Civil Practice law and Rules, be
filed and enforced as a judgment or not in excess of twenty percent
per month of the overcharge owed by the present owner may be offset
against any rent hereafter due the present owner. Where the tenant
credits the overcharge, the tenant may add to the overcharge, or
where the tenant files this order as a judgment, the County Clerk
may add to the overcharge, interest at the rate payable on a
judgment pursuant to Section 5004 of the Civil Practice law and
Rules from the issuance date of the Rent Administrator's order to
the issuance date of the Commissioner's Order.
This order is issued without prejudice to the tenant's right to
commence an action in a court of competant jurisdiction in the
event the prior owner fails to refund overcharges as required by
this order.
THEREFORE, in accordance with the provisions of the Rent
Stabilization law and Code, it is
ORDERED, that this petition be, and the same hereby is, denied and
the Rent Administrator's order be, and the same hereby is,
affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
|
