STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
------------------------------------X S.J.R. NO. 7220
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF DOCKET NO.DD210001RO
: DRO DOCKET NO.58342G
DOUBLE A PROPERTY ASSOCIATES TENANT: VICTOR GRIMES
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On November 4, 1987, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on June
12, 1987, by the Rent Administrator, 10 Columbus Circle, New York,
New York, concerning the housing accommodations known as 60 Turner
Place, Brooklyn, New York, Apartment No. 4N, wherein the Rent
Administrator determined that the owner had overcharged the tenant.
This petition is considered as timely filed because the Rent
Administrator's order being appealed was not sent to the owner at
its last registered address as required pursuant to Section
2527.3(c) of the Rent Stabilization Code and during the course of
the proceeding before the Rent Administrator, in a letter dated
October 15, 1986, the owner advised DHCR of its new address and such
new address was not used in the Rent Administrator's order. This
petition was rejected on March 20, 1989 under docket BK210009RO and
timely refiled on March 30, 1989.
Subsequently, the petitioner-owner filed a petition in the
Supreme Court pursuant to Article 78 of the Civil Practice Law and
Rules, in the nature of mandamus, to have its petition expeditiously
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
November, 1981 of a rent overcharge complaint by the tenant who
originally moved to the subject apartment in March, 1979. In
response to the tenant's complaint, the owner's then agent stated
that the subject premises was purchased in a foreclosure action in
March 1979 and stated that the rent was $320.00 as of January 7,
In Order Number CDR 30,574 , the Rent Administrator determined
that, due to the owner's failure to submit a complete rental
history, the tenant had been overcharged in the amount of $4,972.59
and directed the owner to refund such overcharge to the tenant as
well as to reduce the rent.
In this petition, the owner contends in substance that it did
not default as it submitted all the rent records it had in another
proceeding (docket 42758); that it was not properly sent a
complaint during this proceeding; and that it bought the subject
premises in a foreclosure sale. Subsequently the owner submitted a
supplement to its petition and stated that pursuant to the decision
in JRD, it should not be required to submit rent records for more
than four years.
In answer to the owner's petition, the tenant stated in
substance that the owner had previously defaulted and failed to
respond in the earlier proceeding 42475G; and that the owner should
be precluded from filing a petition against the instant case because
the tenant had already received a judgment of the overcharge by a
court determination. In support of such contention, the tenant
submitted a copy of a stipulation dated December 12, 1988 in which
the parties acknowledged the DHCR overcharge award of $5,419.21
(made in the order under appeal herein plus interest); agreed that
the tenant had not paid rent for a certain period and that the total
amount of unpaid rent equals the amount of the overcharge; that
accordingly, the tenant would sign and file a satisfaction of
judgment with the Kings County Clerk's Office; and that nothing in
the stipulation would limit the rights of either party or constitute
a waiver of any party's rights to initiate an Article 78 proceeding
after DHCR has issued a determination of the owner's petition
The Commissioner is of the opinion that this petition should be
At the outset, the Commissioner finds that the owner's petition
was timely filed for the reasons given in the first paragraph of
this decision. Further, a search of DHCR records failed to disclose
a decision in the earlier proceeding - 42475G - mentioned by the
tenant in his answer to the owner's petition so that such earlier
proceeding cannot be considered. It is noted that another
proceeding referred to by the parties - 42758 - was closed as a
duplication of the Rent Administrator's order appealed herein.
Finally, the stipulation signed by the parties does not preclude the
DHCR from deciding the owner's petition on the merits.
Turning to the merits, 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 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 in that the rent on April 1, 1980 was $364.80
and was correctly increased to $423.17 effective April 1, 1982 and
to $461.26 effective April 1, 1985 pursuant to lease renewals.
Therefore, the Rent Administrator's order finding a rent overcharge
must be revoked.
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.
JOSEPH A. D'AGOSTA