STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                              DOCKET NO.:              
                                                 BH 410290 RT                
                                                 RENT ADMINISTRATOR'S    
                                                 DOCKET NO.:                 
                                                 AJ 410483 S
                     DANIEL BERNSTEIN                        

                              PETITIONER      : 


               On August 21, 1987, the above-named petitioner-tenant filed a 
          petition for administrative review of an order issued on July 17, 
          1987, by the Rent Administrator, concerning the housing 
          accommodation known as Apartment 2-B, 18 Thompson Street, New York, 
          N.Y., wherein the Administrator denied the tenant's application for 
          a rent reduction based on a finding that the facts in the case did 
          not warrant the relief requested.

               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.  

               The record reveals that on October 17, 1986, the tenant filed 
          a complaint alleging that he was entitled to a rent reduction 
          because four years ago the owner had reduced the size of his 
          apartment by taking away the bedroom.  Attached to the complaint 
          was a document entitled "Amendment to Lease", dated September 28, 
          1982, expressing an agreement by the owner to pay the tenant $3,000 
          to be paid as a rent credit commencing October 1, 1982, in exchange 
          for surrender of possession of the bedroom portion of his 

          ADM. REVIEW DOCKET NO.: BH 410290 RT

               In answer to the complaint, the owner asserted that the 
          tenant's complaint is barred by laches and by agreements signed by 
          him.  The owner submitted a modified and executed copy of the same 
          agreement, which states that the tenant was paid $7,500, of which 
          $4,000 was cash and $3,500 was a rent abatement.  The $4,000 was 
          characterized for tax purposes at the tenant's insistence, 
          according to the owner, as reimbursement for renovations and 
          repairs but, the owner said, there actually were no such repairs or 
          renovations.  The owner added that the bedroom had to be sealed off 
          because it is actually in another building and a prior owner had 
          illegally broken through a fire wall to add the bedroom to the 
          tenant's apartment.   

               In response, the tenant claimed that the owner threatened to 
          evict him if he did not accept the offer of $7,500, that the $4,000 
          was money the tenant had spent for renovations and repairs, and 
          that the owner fraudulently misrepresented that the bedroom was 
          illegal when in fact it could have been made legal by the 
          installation of a steel fire door.

               A physical inspection of the apartment on March 17, 1987 
          revealed that unit consists of a bathroom, kitchen area, and 
          combination living room/bedroom.  There is no separate bedroom.

               The Rent Administrator's order issued on July 17, 1987 denied 
          the tenant's application on the ground that the facts in the case 
          do not warrant the relief requested under Sections 2520.6(r) and 
          2523.4 of the Rent Stabilization Code.

               In the petition for administrative review, the tenant asserts 
          that he was coerced into giving up the bedroom which resulted in a 
          reduction in his living space from 750 square feet to 375 square 
          feet.  He claims that the $4,000 cash payment he received was 
          reimbursement for work the tenant had put into the bedroom during 
          the seven years he had use of it as well as money to make the 
          remaining space livable for himself, his wife and their two pets.  
          The tenant contends that he is entitled either to a rent reduction 
          or to having the bedroom returned. 

               In answer to the petition, the owner states that the tenant 
          was paid $7,500 to voluntarily relinquish the use of one of his 
          bedrooms and if he regrets this decision five years later, it does 
          not constitute a decease in services within the meaning of the Rent 
          Stabilization Code. 

               After careful consideration of the entire evidence of record, 
          the Commissioner is of the opinion that the petition should be 

               The tenant's complaint is in the nature of an application for 
          a rent reduction based on the owner's alleged failure to maintain 

          ADM. REVIEW DOCKET NO.: BH 410290 RT

          services.  Section 2523.4 of the Rent Stabilization Code provides 
          for a reduction of the legal regulated rent to the level in effect 
          prior to the most recent guidelines adjustment where it is found 
          that the owner has failed to maintain required services. The 
          definition of required services contained in Section 2520.6(r) 
          includes the space the owner provided on the applicable base date.  
          Although these Code sections suggest that a guideline rent 
          reduction is warranted for the reduction in the size of the 
          tenant's apartment, the Commissioner is of the opinion that the 
          particular facts of this case require a different result.

               Although a rent regulated tenant may not waive rights granted 
          by the Rent Stabilization Law and Code, and any such waiver is 
          void, in this case, there was no waiver of a benefit, given the 
          bargained for consideration the tenant received in exchange for a 
          reduction in space. 

               It is undisputed that the alteration in the size of the 
          subject apartment occurred in 1982 at which time the tenant 
          voluntarily entered into an agreement with the owner providing for 
          a cash payment and a rent abatement in consideration for the loss 
          of space.  The tenant's attempt to repudiate this agreement four 
          years later by seeking a rent reduction is not to the tenant's 
          benefit and puts the owner at an unfair disadvantage.  A review of 
          the amount of rent the tenant has been paying reveals that a 
          guideline rent reduction, effective December 1, 1986, the month 
          following service of the complaint on the owner, would not result 
          in a refund to the tenant equal to the financial settlement the 
          tenant received in 1982, which amount the tenant would have to 
          refund to the owner with interest if the agreement is voided.  
          Although the benefit to the tenant of a rent reduction increases 
          with the duration of the tenancy, the owner is unfairly 
          disadvantaged by the impossibility of restoring the apartment to 
          its former size, resulting in a permanent rent freeze.  

               Had the tenant rejected the settlement when it was offered by 
          the owner, the owner might have pursued a different course of 
          action.  For example, the owner might have applied for a decrease 
          in space with a reduction in the rent as permitted by Section 
          2522.4(d) of the current Rent Stabilization Code and the equivalent 
          section of the Code then in effect.  Since such an application must 
          be filed prior to the reduction in space, the tenant's voluntary 
          acceptance of an agreement prevented the owner from later pursuing 
          this course. 

               Section 2522.7 of the Code permits and even requires a 
          consideration of all factors bearing on the equities involved when 
          any order adjusting a rent is issued.  In this case, given the 
          tenant's long delay in filing the instant complaint, his voluntary 

          ADM. REVIEW DOCKET NO.: BH 410290 RT

          agreement with the owner pursuant to which he was compensated for 
          the loss of space, and the severe and irrevocable detriment to the 
          owner if a rent reduction is ordered at this late date requires a 
          determination, after considering the equities involved, that the 
          tenant's application should be denied. 

               THEREFORE, in accordance with the Rent Stabilization Law and 
          Code, it is

               ORDERED, that this petition be and the same hereby is denied  
          and the Rent Administrator's order be and the same hereby is 


                                          JOSEPH A. D'AGOSTA
                                          Acting Deputy Commissioner



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