DOCKET NO. AI 410208-RO
STATE OF NEW YORK
DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
92-31 UNION HALL STREET
JAMAICA, NEW YORK 11433
IN THE MATTER OF THE ADMINISTRATIVE : ADMINISTRATIVE REVIEW
APPEAL OF : DOCKET NO. AI 410208-RO
JACK MINC, : DISTRICT RENT ADMINISTATOR'S
: DOCKET NO. CDR-21,581
ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
On September 29, 1986, the above-named petitioner-owner filed a
Petition for Administrative Review against an order issued on
September 3, 1986 by the Rent Administrator, 10 Columbus Circle,
New York, New York concerning the housing accommodation known as
Apartment 1, 411 East 91st Street, New York, New York wherein the
Rent Administrator determined that the rent being charged
exceeded the legal stabilization rent and directed the owner to
roll back the rent and to refund $10,061.19 representing the
total amount of the overcharge, including interest and excess
The Commissioner notes that this proceeding was initiated prior
to April 1, 1984. Sections 2526.1(a) (4) and 2521.1(d) of the
Rent Stabilization Code (effective May 1, 1987) governing rent
overcharge and fair market rent proceedings provide that
determination of these matters be based upon the law or code
provisions in effect on March 31, 1984. Therefore, unless
otherwise indicated, reference to sections of the Rent
Stabilization Code (Code) contained herein are to the Code in
effect on April 30, 1987.
The Commissioner has reviewed all the evidence in the record and
has carefully considered that portion of the record relevant to
the issues raised by the administrative appeal.
The proceeding was originally commenced on October 29, 1981 by
the filing of a rent overcharge complaint with the former New
York City Conciliation and Appeals Board (CAB) by the tenant
(Daniel Brooks) who had taken occupancy of the subject apartment
pursuant to a one-year lease commencing February 11, 1981 and
terminating February 11, 1982 at a monthly rent of $352.54. The
petitioner purchased the subject building in January 1982.
DOCKET NO. AI 410208-RO
Brooks continued to occupy the subject apartment until April
1982. In May 1982, Jill Brooks and Susan McCarn took occupancy
pursuant to an alleged "sublease" commencing May 1, 1982 and
expiring July 30, 1982 at a monthly rent of $408.95. Although
the tenant had requested, in writing, permission to sublet the
premises, the owner did not respond to the request.
The "subtenancy" continued under the terms of the "sublease"
until December 1982 when the owner tendered in Susan McCarn's
name only a one-year renewal lease backdated to commence August
1, 1982 and expiring August 1, 1983 at a monthly rent of $510.75.
On February 2, 1983 the tenants (Burton and McCarn) filed a rent
overcharge complaint with the CAB. Subsequently, the petitioner
initiated summary proceedings against Burton as an illegal
subtenant. Because both overcharge complaints involved common
issues of law and fact they were combined for the purpose of
making a determination of the overcharge complaint.
The prior owner, the petitioner-owner and the current owner each
were served with a copy of the complaint and were requested to
submit rent records to prove the lawfulness of the rent being
In response, the petitioner alleged that the complaint had been
settled and submitted a copy of a so-ordered court stipulation.
The stipulation, which is signed by the tenant (Burton), three
additional tenants of the subject building, the owner, the
owner's attorney, and so ordered by the Honorable Antonio
Brandveen states in part: "It is hereby stipulated and agreed
upon by both parties as follows:
1. Rent for the above-named tenants at 411 East
9th Street will be set at $350.00/month,
retroactive to January 1, 1983."
To date, the petitioner has failed to provide a rental history of
the subject accommodation.
In Order Number CDR 21,581, based on the owner's failure to
submit a complete rental history, the Rent Administrator
established the legal stabilized rent, directed the owner to roll
back the rent and further directed a refund of $10,061.19
representing the total overcharge, including interest and excess
In the appeal, as initially filed, the petitioner states that the
subject property was sold to 411 East 9th Street Associates in
November 1983 and requests that the overcharge refund be
allocated by tenancy and that the petitioner's liability be
limited to the Brooks tenancy for the period January to
April 1982. The petitioner contends that Burton withdrew the
overcharge claim both by letter and a so-ordered court
stipulation which has never been modified or rescinded. The
petitioner asserts, therefore, that the only viable complaint is
DOCKET NO. AI 410208-RO
Brooks complaint which is limited to Brooks' actual occupancy of
the subject accommodation ending April 1982. Moreover, the
petitioner continues, if Burton took over Brooks' complaint then
that complaint also would be withdrawn pursuant to the so-ordered
In response to the petition, the tenant (Burton) contends, among
other things, that the prior tenant (Brooks) never withdrew his
complaint; that she was never authorized to withdraw said
complaint; that she signed the stipulation under duress (that of
eviction), knowing, as did all the parties, that the Brooks'
complaint was still pending; that since the current rent is
derived from Brooks' rent, she is entitled to a rent reduction;
and for all of the foregoing reasons, the Administrator's order
should be upheld.
In reply, the petitioner asserts two points which mandate
revocation of the Administrator's order: one, the lease
assignment from Brooks to Burton assigned all rights, interests
and claims pertinent to the lease and thereby extinguished any
and all claims of the prior tenant; and two, the Administrator
should have deferred to the so-ordered stipulation by which the
lawful rent was established in open court and the tenant withdrew
with prejudice her overcharge complaint.
The Commissioner is of the opinion that the petition should be
granted in part.
Based upon a review of the entire record, the Commissioner
rejects the petitioner's contention that the tenant should be
held to the terms of the agreement entered into. Section 11 of
the former Code and Section 2520.13 of the current Code provide
that an agreement to waive the benefit of any provision of the
Rent Stabilization Law or Code should be void. Under Section
2520.13 however, based upon a negotiated settlement between the
parties and with the approval of a court of competent
jurisdiction where a tenant is represented by counsel, a tenant
may withdraw, with prejudice, any complaint pending before the
Division of Housing and Community Renewal. In this case, t e so-
ordered stipulation shows that neither the parties nor the judge
calculated the rent from the base date in accordance with the
Rent Stabilization Law. The record also shows that the tenant
signed the stipulation wherein she agreed to withdraw her
overcharge complaint without the advice of counsel.
Therefore, the Commissioner finds that the stipulation entered
into by the tenant does not bar the Division from determining the
merits of the tenant's complaint.
With regard to the alleged assignment of a lease, the Commissioner
notes that the parties herein have ignored the difference between an
assignment of a lease and a sublease, i.e. in the former, there is a
transfer of the whole of the assignor's interest in the lease, in
DOCKET NO. AI 410208-RO
the latter, the transferor retains a reversionary interest. The
parties use the terms interchangeably. The owner expressly
disapproved of the subtenancy and characterizes the tenant as an
illegal subtenant. Both the tenant and the prior tenant have
disavowed any intention to have the overcharge complaint arising out
of the prior tenant's initial lease assigned to Burton.
Accordingly, the Commissioner finds that the original complaint
filed by the prior tenant (Brooks) survived.
Pursuant to Section 2526.1(f) of the current Code, for complaints
filed prior to April 1, 1984, the owner will be held responsible
only for his or her portion of the overcharges collected prior to
April 1, 1984, in the absence of collusion or any relationship
between the owner and any prior owners. For overcharges collected
on or after April 1, 1984, a current owner shall be responsible
regardless of the date the complaint was filed. If the complaint
was filed on or after April 1, 1984, the current owner will be
responsible for all overcharges, even those collected before April
The Commissioner notes there is no evidence of collusion or any
relationship between the current and prior owners. Accordingly,
since the complaint was filed before April 1, 1984, the
Commissioner finds that of the total refund owed to the prior
tenant (Brooks) $2,480.08 the prior owner (Franklin Mark) is
responsible for overcharges collected from February 11, 1981
through December 1981 or $1,881.44 and the petitioner-owner (Jack
Minc) is responsible for overcharges collected from January through
April 1982 or $598.64. For overcharges to be refunded to
the tenant (Burton), the petitioner-owner is responsible for the
amounts collected through October 1983 or $3,229.07. The current
owner is responsible for the remaining overcharges collected from
November 1983 through December 1985 or $4,352.04.
This order may, upon the expiration of the period in which the
owner may institute a proceeding pursuant to Article Seventy-Eight
of the Civil Practice Law and Rules, be filed and enforced by the
tenant in the same manner as a judgment or not in excess of twenty
percent thereof per month may be offset against any rent thereafter
due the owner.
THEREFORE, in accordance with the Rent Stabilization Law and Code,
ORDERED, that this petition be, and the same hereby is, granted in
part and that the order of the Rent Administrator be, and the same
hereby is, modified as above set forth but is otherwise affirmed.
DOCKET NO. AI 410208-RO