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
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IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.HJ110019RP
: (BA110444RO)
David Associates, DRO DOCKET NO.
Q3118771R
PETITIONER : TENANT:Michael Bracken
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
The above-named owner is deemed to have timely filed a Petition for
Administrative Review ("PAR") against an order issued on December
12, 1986, by a Rent Administrator, concerning the housing
accommodations known as 11-14, 46th Avenue, Long Island City, New
York, Apartment No.2H, wherein the Rent Administrator determined
that the owner had overcharged the tenant. (The Commissioner
initially rejected the PAR for procedural reasons; the owner then
petitioned the Supreme Court to reverse that action, and the Court
(pursuant to stipulation) has remitted the matter to the
Commissioner for a determination on the merits.)
This proceeding was originally commenced by the filing in 1984 of
a rent overcharge complaint by the tenant, to which the owner
submitted no answer. In his complaint, the tenant stated that the
first moved to the subject apartment on March 14, 1982. In Order
Number CDR 28,401, the Rent Administrator determined, due to the
owner's failure to submit a complete rental history, that the owner
had collected a rent overcharge of $4,090.25, including interest on
that portion of the overcharge occurring on and after April 1,
1984, and excessive security deposited.
In this petition, the owner submits copies of leases running from
1980, contending that the Commissioner should now consider those
leases for the reason that when the owner got notice of the
tenant's complaint, the tenant had already moved out, the owner
therefore believing it had no obligation to respond. More
specifically the owner states that when (not having received the
complaint herein) it received the Administrator's 1986 "Final
Notice," its records showed that the tenant had vacated in 1985, so
that the owner believed the matter was moot.
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HJ110019RP
In answer to the owner's petition, the tenant states in pertinent
part that "a landlord who makes his living ... from a rent-
stabilized building and employ[s] a staff regarding same should
know that if he has overcharged a tenant, his obligation to that
tenant for the amount overcharged should not cease just because the
tenant moves out of the building."
In response to that answer the owner refers in pertinent part to
its "misunderstanding that once a tenant has vacated a[n] ...
apartment, the complaint of that tenant w[ill] be dismissed."
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 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 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.,
HJ110019RP
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 that requirement is both
rational and supported by the law and the 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 records in this case discloses that the owner in the
proceeding before the Rent Administrator did not submit a rental
history from April 1, 1980, as required.
The owner's excuse, that it believed any response-- even by way of
inquiry--was unnecessary because the tenant had vacated the
premises, is unacceptable. As to the allegation that the owner did
not receive the original complaint: the Administrator's file
contains an initialed note that "owner notices sent" on "11-30-
84," as well as a carbon copy of a letter of the same date, bearing
the same owner's address as the Final Notice that the owner admits
receiving. Said November 30, 1984 letter from the DHCR begins:
"Enclosed please find a copy of a tenant's complaint form(s)....
[and] owner answer forms." In these circumstances the Commissioner
will not find a failure to serve the owner with the complaint
herein. The submission of a rental history for the first time on
appeal is not acceptable since this is not a de novo proceeding.
Accordingly, the Rent Administrator's order establishing the lawful
stabilization rent utilizing the default procedure and finding a
rent overcharge was warranted.
The owner is directed to reflect the findings and determinations
HJ110019RP
made in this order on all future registration statements, including
those for the current year if not already filed, citing this order
as the basis for the change. Registration statements already on
file, however, should not be amended to reflect the findings and
determinations made in this order. The owner is further directed
to adjust subsequent rents to an amount no greater than that
determined by this order plus any lawful increases.
The Commissioner has determined in this Order and Opinion that the
owner collected overcharges of $4,090.25. 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. The County Clerk
may then 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.
A copy of this order is being sent to the current occupant of the
subject apartment.
THEREFORE, in accordance with the provisions 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. The lawful
rent, as of February 1986, was $351.29.
ISSUED:
JOSEPH A. D'AGOSTA
Deputy Commissioner
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