FJ 110170 RO

                                STATE OF NEW YORK
                          OFFICE OF RENT ADMINISTRATION
                                   GERTZ PLAZA
                             92-31 UNION HALL STREET
                             JAMAICA, NEW YORK 11433

      APPEAL OF                              DOCKET NO. FJ 110170 RO

                                          :  DRO DOCKET NO. ZCK 110012 RP
           Jonathan Woodner Co.,
                                             TENANT: Borney Restrepo          

                            PETITIONER    : 


      On October 1, 1991, the above-named petitioner-owner filed a Petition 
      for Administrative Review against an order issued on August 28, 1991,   
      by the Rent Administrator, Gertz Plaza, Jamaica, New York, concerning 
      the housing accommodations known as 43-23 Colden Street, Queens, 
      New York, Apartment No. 25-H, wherein the Rent Administrator determined 
      that the owner had overcharged the tenant.

      The Administrative Appeal is being determined pursuant to the provisions 
      of Section 2526.1 of the Rent Stabilization Code.

      The issue herein is whether the Rent Administrator's order was 

      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 appeal.  

      This proceeding was originally commenced by the filing in March 1984 of 
      a rent overcharge complaint by the tenant.  The tenant stated that he 
      moved to the subject apartment on September 1, 1981 at a rental of 
      $546.00 per month.

      The owner was served with a copy of the tenant's compliant and directed 
      to submit a complete rental history from the base date June 30, 1974 or 
      if the apartment was decontrolled after June 30, 1974, the base date 
      would be the initial date of occupancy of the first rent stabilized 

      In answer to the tenant's complaint, the owner stated in substance that
      the tenant was not being overcharged.  The owner submitted copies of 
      leases for the subject apartment from September 1, 1981 but no leases 
      prior thereto and copies of bills and cancelled checks for work done in 
      the subject apartment in 1979.

      In Order Number ZCK 11012 RP, the Rent Administrator determined that due 
      to the owner's failure to submit a complete rental history, the tenant 

          FJ 110170 RO

      had been overcharged in the amount of $25,854.45 including interest, on 
      the overcharges occurring on and after April 1, 1984 and directed the 
      owner to refund such overcharge to the tenant as well as to reduce the 
      rent.  Further the Rent Administrator in his order credited the owner 
      with a rent increase of $39.98 for some of the 1979 improvements when 
      setting the September 1, 1981 rent of the tenant herein and did not 
      freeze the tenant's rent for the period of the rent overcharge.

      In this petition, the owner alleges in substance that pursuant to the 
      decision in JRD, since it was not actually asked for rent records in 
      this proceeding until November 1988 and its most recent registration for 
      the subject apartment was July 29, 1988, it should not be required to 
      submit rent records for any period prior to July 29, 1984 and that when 
      this is done, it is apparent that no rent overcharge occurred; that the 
      owner should have been credited with a rent increase for all of the 
      improvements done in 1979 and not just some of them, and that after an 
      extensive search through its archives, it has now located additional 
      leases for the subject apartment.  In support of this contention the 
      owner submitted copies of additional leases for the subject apartment 
      including a two year lease for a prior tenant which commenced on January 
      1, 1980.

      The Commissioner is of the opinion that this petition 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) and to produce such records to the DHCR upon 

      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 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 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 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).

          FJ 110170 RO

      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 leave 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 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.

      In this case, the owner did not provide a complete rental history from 
      April 1, 1980 in the proceeding before the Rent Administrator and has 
      not given a reasonable explanation for its failure to do so.  Since this 
      is not a de novo proceeding, the owner's submission of a rental history 
      from April 1, 1980 cannot be considered for the first time on appeal.  
      According the Rent Administrator's order establishing the lawful 
      stabilization rent utilizing the DHCR default procedure was warranted.

      The owner's contention that it had to submit a rental history only from 
      July 29, 1984 pursuant to JRD, is incorrect.  Since the tenant herein 
      filed his overcharge complaint prior to April 1, 1984, the owner was 
      required to submit a rental history from April 1, 1980.  Further the 
      owner's contention that it was entitled to an additional rent increase 
      for improvements done in 1979 is without merit.  Since the owner did not 
      submit the required rental history form April 1, 1980, it was not 
      entitled to any rent increases for improvements done in 1979.  However, 
      in the absence of a timely petition for administrative review by the 
      tenant, the Rent Administrator's order will not be amended to delete the 
      rent increase due to the 1979 improvements.

      Because this determination concerns lawful rents only through           
      August 31, 1991, the owner is cautioned to adjust subsequent rents to an 
      amount no greater than that determined by the Rent Administrator's order 
      plus any lawful increases, and to register any adjusted rents with this 
      order and opinion being given as the explanation for the adjustment.

      This order may, upon the expiration of the period in which the owner may 
      institute a proceeding pursuant to Article 78 of the Civil Practice Law 
      and Rules, be filed and enforced in the same manner as a judgment or not 
      in excess of twenty percent per month thereof may be offset against any 
      rent thereafter due the owner.

          FJ 110170 RO

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

      ORDERED, that this petition for administrative review be, and the same 
      hereby is, denied, and, that the order of the Rent Administrator be, and 
      the same hereby is, affirmed.


                                      JOSEPH A. D'AGOSTA
                                      Acting Deputy Commissioner


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