ADM. REVIEW DOCKET NOS.: DL 510182 RO & EA 410071 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
APPEALS OF DOCKET NOS.:
DL 510182 RO
: EA 410071 RO
DRO ORDER NOS.:
AH 510116 R
AH 410309 RV
Z. KEN DARIAN - OWNER
Tenant - Laurie Newman
PETITIONER :
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ORDER AND OPINION DENYING PETITIONS FOR ADMINISTRATIVE REVIEW
On December 20, 1989 and on December 2 , 1989, the above-
named petitioner-owner timely filed Petitions for Administrative
Review against two related orders issued by the Rent
Administrator, 92-31 Union Hall Street, Jamaica, New York, on
November 17, 1989 and December 12, 1989, respectively, concerning
the housing accommodation known as 209 E. 81st Street, New York,
New York, Apartment 4A wherein the Administrator directed a
refund of $1266.72 inclusive of treble damages on the overcharge
and conditionally directed the owner to offer the tenant a
renewal lease.
Pursuant to applicable provisions of the Rent Stabilization
Code, the Petitions for Administrative Review were deemed denied
and on May 31, 1991 the petitioner herein instituted an Article
78 proceeding pursuant to the Civil Practice Law and Rules,
requesting that the Administrator's orders be vacated and set
aside as arbitrary and capricious.
In its Article 78 Petition, the owner asserts, among other
things, that the orders here at issue improperly set aside an
arms-length negotiated agreement between the tenant and the
owner.
On August 14, 1986, the tenant commenced these proceedings
by filing two complaints: one alleging that the rent being
collected was an overcharge; and the other alleging that the
owner had failed to offer the tenant a renewal lease. The tenant
asserted that she had commenced occupancy of the subject premises
pursuant to a sublease commencing March 1, 1984 and terminating
September 30, 1985 at a monthly rent of $465.30, the prime
tenant's rent $423.00 plus a sublet allowance equal to a 10%
vacancy increase.
In answer to the complaints, the owner asserted that the
ADM. REVIEW DOCKET NOS.: DL 510182 RO & EA 410071 RO
complainant had illegally remained in the subject apartment after
the expiration of both the prime lease and the sublease and was
not a tenant but only an occupant or licensee, not entitled to
the rights of a Rent Stabilization tenant. In support thereof,
the owner submitted a copy of an agreement (called a surrender
agreement by the owner) whereby the tenant agreed to pay for use
and occupancy only and to vacate the subject apartment by a
specific date. Thereafter, the owner initiated a hold-over
proceeding in the New York City Civil Court which was voluntarily
discontinued by the petitioner in October 1987.
In rebuttal, the tenant asserted that the owner had accepted
rent payments directly from her during the term of the sublease
and after the expiration of both the sublease and prime lease.
The tenant submitted copies of rent checks made payable to the
owner and subscribed by the tenant. The tenant further asserted
that she had signed the so-called surrender agreement in fear
that she would be evicted.
In the order issued on November 17, 1989, the Administrator
determined that an overcharge had occurred and directed the owner
to roll back the rent and to refund overcharges of $1266.72
inclusive of treble damages on the overcharges.
In the order issued on December 12, 1989, the Administrator
determined that the owner had recognized the claimant as a prime
tenant with all the rights of a Rent Stabilization tenant and
directed the owner to offer the tenant a renewal lease
conditioned upon the tenant paying all rent arrears.
In the appeals, the petitioner contends that the orders here
under review should be reversed because 1) as a subtenant the
claimant had no succession rights to the subject premises; 2) the
claimant had agreed to surrender all rights, title and interest
in the subject premises; and 3) any money paid by the tenant was
only for use and occupancy and not for rent. With respect to the
overcharge complaint, the owner contends that the Administrator
neglected to take into account money which had been spent on
improvements to the subject apartment.
In reply, the tenant contends that the owner accepted rent
from her at the same rate even after the expiration of the sublet
term. The tenant disputes the owner's claimed improvements as
unsupported and without merit. The tenant challenges the
validity of the agreement dated February 11, 1986. The tenant
asserts she was not represented by counsel when she signed the
agreement which she contends is improperly characterized as a
surrender agreement by the owner.
After careful consideration, the Commissioner is of the
opinion that these petitions should be denied.
Although pursuant to the Rent Stabilization Code, an owner
is not required to offer a lease to a subtenant, in the instant
case, an independent landlord-tenant relationship arose.
Examination of the available record discloses that the owner
accepted rent payments directly from the tenant both during the
ADM. REVIEW DOCKET NOS.: DL 510182 RO & EA 410071 RO
sublet term and on a month to month basis after the expiration of
the lease, thereby establishing the landlord-tenant relationship.
Moreover, Section 2520.6(d) of the Code defines tenant as
"(A)ny person ... who is or are a party or parties to a rental
agreement and obligated to pay rent for the use or occupancy of a
housing accommodation." The agreement dated February 11, 1986
established the conditions of occupancy, including the length of
term and the amount of payment for use and occupancy. Pursuant
to Code Section 2520.6(c) rent may be defined as consideration
for use and occupancy. Although the owner calls the agreement a
surrender agreement, it could also accurately be called a rental
agreement. Code Section 2520.12 provides, in pertinent part,
that "the provisions of any lease or other rental agreement shall
remain in force pursuant to the terms thereof, except insofar as
those provisions are inconsistent..., and in such event such
provisions shall be void and unenforceable." With respect to the
tenant's alleged surrender of all right, title, and interest in
the subject accommodation, it is noted that pursuant to Code
Section 2520.13, an agreement by a tenant to waive the benefit of
any provision of the Rent Stabilization Law or Code is void.
Accordingly, the provisions of the agreement which required the
tenant to vacate the premises are void.
The issue of the cost of improvements was not presented for
consideration to the Administrator and thus is beyond the scope
of review of this order.
Pursuant to the relevant sections of the Rent Stabilization
Code, the Commissioner finds that the Administrator correctly
determined that the claimant was a tenant entitled to all rights
of the Rent Stabilization Law and Code, including a lease, and
correctly determined that an overcharge had occurred.
The Commissioner notes that the tenant has vacated the
subject apartment.
Upon the expiration of the period in which the owner may
institute a proceeding pursuant to Article 78 of the Civil
Practice Law and Rules, this order may be filed and enforced as
judgment.
THEREFORE, in accordance with the Rent Stabilization Law and
Code, it is
ORDERED, that these petitions be, and the same hereby are,
denied, and the Rent Administrator's orders be, and the same
hereby are, affirmed.
ISSUED:
ADM. REVIEW DOCKET NOS.: DL 510182 RO & EA 410071 RO
ELLIOT SANDER
Deputy Commissioner
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