GE210176RO

                                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.: GE210176RO

                                             DISTRICT RENT ADMINISTRATOR'S
           Rose Realty Co.,                  DOCKET NO.: GA210010RK

                                             TENANT: Frances Brisman          
                               PETITIONER    
      ------------------------------------X                             


          ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW


      On May 20, 1992, the above-named owner timely refiled a Petition for 
      Administrative Review of an Administrator's order concerning the housing 
      accommodations known as 1150 Brighton Beach Avenue, Brooklyn, New York, 
      Apartment No. 3O, wherein the Administrator determined that the owner 
      had overcharged 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 issue 
      raised by the administrative appeal.  

      This proceeding was commenced by the filing of an overcharge complaint 
      on February 27, 1984.

      In his answer, the owner alleged that the base date was May 1, 1978 and 
      submitted a complete rent history from that date.  The owner alleged 
      that no overcharge occurred.
           
      In an order dated June 14, 1989, under Docket No. K3101842R the  
      Administrator determined that the owner had defaulted in his obligation 
      to provide a complete lease history.  The Administrator also found that 
      the subject apartment was not registered.  Using the court approved 
      default method of calculation, the total overcharges were determined to 
      be $12,281.36 through April 30, 1986 and the lawful stabilization rent 
      was frozen at $233.35.

      Subsequently, the Administrator reopened this proceeding under Docket 
      No.GA210010RK because the original order was sent to the owner at an 
      incorrect address.  This new order simply corrected the owner's mailing 
      address and was mailed to that corrected address.  No substantive 
      changes were made in the body of the order.

      In its petition for administrative review, the owner asserts, among 
      other things, that the Administrator could only begin its inquiry into 
      overcharges as of April 1, 1980 based on the Appellate Division, Second 
      Department's ruling in J.R.D. Management Corp. v. Eimicke, 148 A.D.2d 
      610, 539 N.Y.S. 2d 667 (2d Dep't 1989).  In the alternative, it is 
      alleged that even if JRD did not apply, the owner had supplied a 







          GE210176RO

      complete lease history below.  Further, the owner states that the 
      subject apartment had been duly registered and submits a DHCR certified 
      copy of agency records showing that the subject apartment was registered 
      in 1984.

      The Commissioner is of the opinion that this petition should be granted.

      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 
      demand.

      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).

      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 


          GE210176RO

      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.  An examination of the rent records 
      from April 1, 1980 discloses that no rent overcharge occurred.  
      Therefore, the Rent Administrator's order finding a rent overcharge must 
      be revoked.

      The Commissioner also finds that the subject apartment was duly 
      registered for all years since 1984.  A reexamination of DHCR's records 
      along with the owner's submission of a certified copy of the DHCR 
      computer records for 1984 indicate that the Administrator erred in his 
      conclusion that the subject apartment was not registered.

      If the owner has already complied with the Rent Administrator's order 
      and there are arrears due to the owner as a result of the instant 
      determination, the tenant is permitted to pay off the arrears in 24 
      equal monthly installments.  Should the tenant vacate after the issuance 
      of this order or have already vacated, said arrears shall be payable 
      immediately.

      THEREFORE, in accordance with the Appellate Division ruling in JRD, it 
      is

      ORDERED, that this petition for administrative review be, and the same 
      hereby is, granted, that the order of the Rent Administrator be, and the 
      same hereby is, revoked, and it is found that no rent overcharge 
      occurred.



      ISSUED:



                                                                  
                                      JOSEPH A. D'AGOSTA
                                      Deputy Commissioner





    

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