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
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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 :
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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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