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

    

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