ADM. REVIEW DOCKET NO.: BF 710289 RO 

                                  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.:  BF  710289-RO
                        
                                              :  D.R.O. DOCKET NO.:
                                                 N-LB-86-S-295-R 
               EXECUTIVE                                            TOWERS,
                                                 Tenant: Saul  Schneiderman
                   
                                                  

                              PETITIONER      : 
          ------------------------------------X 

            ORDER AND OPINION GRANTING PETITION FOR ADMINISTRATIVE REVIEW
            IN PART

               On July 1, 1987, the above-named  petitioner-owner  filed  a
          Petition for Administrative Review against an order issued on May 
          28,  1987,  by  the  Rent  Administrator,  50   Clinton   Street,
          Hempstead, New York, concerning housing accommodations  known  as
          Apartment 5R-E, 860 East Broadway, Long Beach, New York,  wherein
          the Rent Administrator determined that the November 3, 1986 order 
          under the same docket should be modified  so  as  to  reduce  the
          overcharge found therein from $20,406.88 plus $1870.00 in  excess
          security to $13,271.28 plus $1885.73 in excess security.

               The Commissioner has reviewed all of  the  evidence  in  the
          record and has carefully considered that portion  of  the  record
          relevant to the issues raised by the administrative appeal.  

               The tenant commenced this  proceeding  on  May  8,  1986  by
          filing an overcharge complaint stating that his graduated rent of 
          $1250.00-$1400.00 exceeded the lawful rent and that the owner had 
          required the tenant to sign a lease  rider  stating  the  subject
          apartment was not the primary residence of the tenant so that the 
          apartment was not covered by the Emergency Tenant Protection  Act
          (ETPA).  The rider also stated that if the  tenant  attempted  to
          seek ETPA  coverage  as  a  primary  resident,  the  owner  could
          terminate the tenancy. 

               In answer to  the  complaint,  the  owner  stated  that  the
          Division did not  have  jurisdiction  to  determine  the  primary
          residence status of a tenant, such jurisdiction being  restricted
          ADM. REVIEW DOCKET NO.: BF 710289 RO 

          solely to  the  courts.   The  owner  also  stated  that  it  had
          commenced a court proceeding to rescind the tenant's lease.

               In Order Number N-LB-86-S-295-R, herein under review, the 
          Rent Administrator determined that Section 2500.12 of the  Tenant
          Protection Regulations (TPR) provides that an  agreement  by  the






          ADM. REVIEW DOCKET NO.: BF 710289 RO 
          tenant to waive any benefit of  the  ETPA  is  void  and  Section
          2505.3(b) thereof specifically prohibits an owner from  requiring
          a tenant to agree as a condition of renting  that  the  apartment
          would  not  be  used   as   the   tenant's   primary   residence.
          Accordingly,  the  Administrator,  because  the  owner  had   not
          submitted a prior rental history, established the rent  based  on
          the  1984  Annual  Registration  Form  wherein  the   owner   had
          registered the apartment under the ETPA.

               In  this  petition,  the  owner  contends  that   the   Rent
          Administrator's Order is incorrect and should be modified because 
          the apartment is not subject to the  ETPA  due  to  the  tenant's
          written representation that the apartment would not be used as  a
          primary  residence.   Secondly,  the  owner  asserts   that   the
          Administrator should have deferred the matter  until  a  decision
          was reached in the pending court proceeding.  Thirdly, the  owner
          argues that pursuant to TPR Section 2504.4(d) only  a  court  can
          determine the issue of primary residence.  In addition, the owner 
          contends that Section 2505.3(b) of the TPR was not in  effect  on
          the  date  the  lease  was  entered  and  should  not  be   given
          retroactive effect.  Finally, the owner asserts the Administrator 
          made an arithmetical error, specifically that the $485.73 monthly 
          overcharge found by the Administrator should be $485.23, yielding 
          a total  overcharge  of  $13,267.28  and  a  security  refund  of
          $1885.23 rather than the $1941.06 set forth on page three of  the
          Administrator's order.    

               In answer to this petition, the  tenant  contends  that  the
          order should be upheld for the reasons stated therein and because 
          the issue of primary residence is illusory  since  an  owner  can
          only raise that  issue  in  an  nonrenewal  proceeding  upon  the
          expiration of the tenant's lease.  

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

               In a letter dated April 6, 1988 the attorney for  the  owner
          stated that the parties had reached a  settlement  and  requested
          that the owner's petition be withdrawn.   Since  such  withdrawal
          would leave the  Administrator's  order  standing,  the  attorney
          further requested that the Administrator's order be vacated "so 



          that the apartment will not be subject to the ETPA on the  ground
          of the non-primary residence of the tenant." 

               In responses dated December 7, 1988 and September  24,  1990
          the Division stated:  

                    "[S]ince the settlement was reached after the
                    issuance of the Administrator's order, that 
                    order cannot now be vacated merely on the 
                    strength of the attorneys' letters attached
                    to your letter.

                    "However, if you will submit the actual 
                    settlement agreement within 20 days of
                    the above date, it is possible for it to






          ADM. REVIEW DOCKET NO.: BF 710289 RO 
                    be affirmed in a PAR order.  Factors to
                    be considered include a) whether the 
                    agreement establishes an unlawful rent
                    and b) whether tenants of the subject
                    apartment will continue to have the 
                    protection of the ETPA.

                    "If the settlement is not affirmed in such
                    an order the petition will be decided on its
                    merits."

               In a letter dated October 11, 1990 the owner stated that the 
          settlement agreement did not establish a rent for  the  apartment
          but involved a lump sum  payment  and  vacature  by  the  tenant.
          Accordingly, the owner requested that the Division "determine the 
          PAR on its own merits."  Therefore, the petition will  herein  be
          decided on its merits and a copy of this Order will be served  on
          the present occupant of the subject apartment.    
               
               The owner is correct that the monthly overcharge  stated  in
          the order to be $485.73  should  be  $485.23,  yielding  a  total
          overcharge of $13,267.28 plus excess security of $1885.23.  The 
          Administrator's  order  is  hereby  modified  to  reflect   these
          changes.  (The  Commissioner  notes  that  on  page  one  of  the
          Administrator's  Order,  the  monthly  rent  was  stated  to   be
          established at $914.27, whereas on page three thereof the monthly 
          rent for the period August 1, 1986 to July 31, 1988 was correctly 
          computed to be $914.77.  This discrepancy led to the error raised 
          by the owner in its appeal.  All subsequent rent increases should 
          be computed from $914.77.) 





               In all other respects, the Administrator's Order  is  hereby
          affirmed.  The lease rider requiring the tenant not  to  use  the
          apartment as a primary residence, which  explicitly  stated  that
          the apartment would therefore not be subject  to  the  ETPA,  was
          void.  Section 2507.7 of the TPR states that if a  regulation  is
          amended  even  during  the  pendency   of   a   proceeding,   the
          determination shall be in accordance with the amended regulation. 
          Here, Section 2505.3(b), prohibiting an owner from conditioning a
          rental on  an  agreement  that  it  not  be  used  as  a  primary
          residence, is admitted by the owner to have been in effect at the 
          commencement of this proceeding in 1986.  Moreover, even  without
          Section 2505.3(b), the lease rider was clearly void under Section 
          2500.12 in that it explicitly constituted a waiver of all the 
          tenant's rights under  the  ETPA.   Furthermore,  the  tenant  is
          correct that Section 2504.4(d) bestows jurisdiction on the courts 
          to determine  primary  residence  in  the  context  of  an  owner
          refusing to renew a lease and maintaining an  action  to  recover
          possession.  Nothing in that Section prevents the  Division  from
          voiding the lease rider at issue  in  this  proceeding.   Without
          that rider there is no issue of primary residence.   Indeed,  the
          owner's court action was  predicated  on  the  tenant  using  the
          apartment as a primary residence in violation of the lease rider. 
            
               THEREFORE,  in  accordance   with   the   Emergency   Tenant






          ADM. REVIEW DOCKET NO.: BF 710289 RO 
          Protection Act and Regulations, it is

               ORDERED, that this petition for  administrative  review  be,
          and the same hereby is, granted in part, and, that the  order  of
          the Rent Administrator be, and the same hereby  is,  modified  in
          accordance with this order and opinion.

          ISSUED:






                                                                        
                                          ELLIOT SANDER
                                          Deputy Commissioner




                                                    

    

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