ADM. REVIEW DOCKET NO.: BH 410290 RT
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.:
BH 410290 RT
:
RENT ADMINISTRATOR'S
DOCKET NO.:
AJ 410483 S
DANIEL BERNSTEIN
PETITIONER :
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
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
apartment.
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
denied.
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
affirmed.
ISSUED:
JOSEPH A. D'AGOSTA
Acting Deputy Commissioner
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