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                                    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  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       

                                  PETITIONER    : 
            ------------------------------------X                             
              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 
            determined.

                 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 
            warranted.

                 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, 
            1977.

                 








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                 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 
            herein. 

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

                 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) 






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            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 







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            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.

            ISSUED



                                                                          
                                            JOSEPH A. D'AGOSTA
                                            Deputy Commissioner




                       




















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