CB 410029 RT

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

          APPEAL OF                            ADMINISTRATIVE REVIEW
                                               DOCKET NO.:  CB 410029-RT

                                               DRO DOCKET NOS.: L-3112918-R
                                                                CDR  32456
                     ROBERT HALASZ,
                                               OWNER:  JACOB WEINREB

                                               PRIME TENANT:
                                               ANATOLE TENNENBAUM


          On February 4, 1988 the above named petitioner-tenant filed a 
          Petition for Administrative Review against an order issued on 
          January 26, 1988 by the District Rent Administrator,  10 Columbus 
          Circle, New York, New York concerning housing accommodations known 
          as Apartment  10A at 276 Riverside Drive, New York, New York 
          wherein the District Rent Administrator dismissed the tenant's 
          overcharge complaint.  The order incorrectly gave the apartment 
          number as 3C.

          The Commissioner notes that this proceeding was filed 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 
          provision 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, 

          The issue in this appeal is whether the District Rent 
          Administrator's order was warranted.

          CB 410029 RT

          The applicable sections of the Law are Section 26-516 of the Rent 
          Stabilization Law, Section 11 of the former Rent Stabilization 
          Code, and Section 2526.1(a) of the current Rent Stabilization Code.

          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.

          This proceeding was originally commenced by the filing in March, 
          1984 of a rent overcharge complaint by the tenant, in which he 
          stated that he had commenced occupancy in September, 1980 at a rent 
          of $750.00 per month as a subtenant of an illusory prime tenant, 
          when renting the vacant apartment through the owner's office; that 
          he paid the rent to the "prime tenant"; that the rent increased to 
          $800.00 on September 1, 1982; that the prime tenant asked him to 
          vacate at the end of the 3-year sublease; that he then filed a 
          complaint demanding a lease; that the owner gave him his own lease 
          in December, 1983 at a rent of $487.57; that the owner did not give 
          him a rental history; and that he is seeking to regain the excess 
          rent that he paid during the sublease.

          Both the owner and the prime tenant were served with a copy of the 
          complaint.  In reply the owner enclosed a lease between Weinreb 
          Management and the prime tenant at a rent of $750.00, commencing 
          August 1, 1980, extending for three years and one month, and 
          including an additional clause that "tenant has the right to sublet 
          with landlord approval and he has the right to buy the apartment at 
          the inside price when the building will go co-op"; a lease between 
          Weinreb Management and the complainant at a rent of $487.57, 
          commencing December 1, 1983 and stating that the last tenant was 
          John Greenhut at a rent of $399.65; and a General Release dated 
          December 6, 1983 whereby the tenant, in consideration of ten 
          dollars received from Weinreb Management and the prime tenant, 
          released them from any claims "by virtue of a C.A.B. proceeding 
          Docket Number TC 074760-G."  Several times during the course of the 
          proceeding the owner or the prime tenant contended that the General 
          Release relieved them of any claim regarding overcharges, and that 
          the tenant was collaterally estopped from attacking the previously- 
          settled issue.  The tenant asserted that he dropped his complaint 
          about being denied a prime lease when a prime lease  was extended 
          to him; that the current complaint concerned overcharges for the 
          three years prior to his receiving a prime lease; and that he did 
          not wish to withdraw his complaint.  The tenant submitted a copy of 
          the sublease, which included a rider dated August 28, 1980 in which 
          the prime tenant assigned his rights to purchase the apartment at 
          an insider price to the complainant, in return for $10,000.00 to be 
          placed in escrow at the time of the assignment and to be paid to 
          the prime tenant when the complainant received the shares of the 
          co-op corporation.  The complainant had the right to terminate the 
          agreement if the conversion plan was declared inoperative.  The 
          tenant noted on the rider that "[t]his was never put into effect."

          CB 410029 RT

          In an order issued on January 26, 1988 the Administrator dismissed 
          the tenant's complaint on the grounds that the parties had 
          negotiated a settlement and that the tenant had not in doing so 
          waived any rights.

          In this petition the tenant contends in substance that Docket 
          Number TC 074760-G was simply a complaint about the owner's failure 
          to offer him a lease, and that the apartment was in the name of an 
          illusory tenant; that the owner, who is an attorney, stated that he 
          had to sign a General Release to get his own lease; that his 
          complaint in the present proceeding dealt solely with the rent 
          overcharge; that the General Release pertained solely to the first 
          complaint; and that he could not waive his rights to file an 
          overcharge complaint.

          In answer, the owner asserts in substance that "[a] settlement was 
          made in good faith in connection with Docket Number 6334, Docket 
          Number TC 074760-G and finally under Docket Number L-3112918.  
          Consequently the tenant must be precluded from again reopening and 
          renegotiating this exact issue."

          The Commissioner is of the opinion that this proceeding should be 
          remanded to the Rent Administrator.

          Section 11 of the former Rent Stabilization Code provides that 
          "[a]n agreement by the tenant to waive the benefit of any provision 
          of the Rent Stabilization Law or this Code shall be void."  In 
          addition, the Commissioner does not find that the December 6, 1980 
          General Release, by which the tenant gave up his [at that point 
          moot] non-lease-offer claim in Docket Number TC-074760-G in 
          consideration of a token payment of ten dollars, was meant, or 
          should be allowed, to be a bar to his filing of an overcharge 
          complaint several months later.  On remand the owner should be 
          given an opportunity to provide a full rental history, and the 
          complaint should be processed on the merits.

          The prime tenant should also be allowed to participate in the 
          proceeding.  A prime tenant receiving rent from a subtenant for the 
          use and occupancy of a dwelling unit is an "owner" as defined in 
          Section 2(f) of the former Rent Stabilization Code, and is obliged 
          to collect only lawful rents.

          The Rent Administrator should determine whether the prime tenancy 
          in this case was an illusory prime tenancy and whether the owner 
          had knowledge of same.  A hearing should be held if necessary.
          THEREFORE, in accordance with the Rent Stabilization Law and Code, 
          it is

          ORDERED, that this petition be, and the same hereby is, granted to 
          the extent of remanding this proceeding to the Rent Administrator 
          for further processing in accordance with this order and opinion.

          CB 410029 RT


                                                  JOSEPH A. D'AGOSTA
                                                  Acting Deputy Commissioner

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