EC 210422 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.:  EC 210422-RT

                    STUART SMITH,              DRO DOCKET NO.: ZDB 210062-R
                                               TENANT: RAYMOND BUNCE
                                               OWNER:  HALLDALE BUILDING CORP.

                                       IN PART

          On March 23, 1990 the above named petitioner-prime tenant filed a 
          Petition for Administrative Review against  an  order  issued  on
          February 23, 1990 by the Rent  Administrator,  92-31  Union  Hall
          Street,  Jamaica,  New  York  concerning  housing  accommodations
          known as Apartment 3W  at  3211  Avenue  I,  Brooklyn,  New  York
          wherein the Rent Administrator determined that the  prime  tenant
          and the owner had overcharged the tenant.

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

          The applicable sections of the Law are Section 26-516 of the Rent 
          Stabilization Law and Section 2526.1(a) of the Rent Stabilization 

          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
          February, 1989 of a rent overcharge complaint by the  tenant,  in
          which he stated that he had commenced occupancy on May 1, 1987 at 
          a rent of $410.16 per month.  He stated that he had  been  paying
          his rent directly to the prime tenant, and that he  had  recently
          found out that the owner had not been informed of his  subtenancy
          although the prime tenant had assured him  on  several  occasions
          that the owner had been so informed.  He  also  stated  that  the
          apartment was subleased  as  furnished,  and  that  he  therefore
          believed there should have been a  surcharge  of  10%  above  the
          legal rent of $410.16 in the prime tenant's  lease,  rather  than
          the rent  being  $550.00.   In  a  later  submission  the  tenant
          enclosed a copy of a June 1, 1987 note by the prime tenant giving 

          EC 210422 RT
          the tenant permission to sublet and live at the subject apartment 
          until April, 1989 with the rent of $550.00  to  be  paid  to  the
          prime tenant.  He also stated that he had been a roommate of  the
          prime tenant's sister for 1 1/2 to 2 years before being asked  to
          pay a rent of $410.16 for April, 1987 and $550.00  starting  May,

          In answer, the owner stated that  it  had  been  unaware  of  the
          sublet, and that rent had been received  from  the  prime  tenant
          until he vacated as of February 28, 1989.  No answer was received 
          from the prime tenant.

          In an order issued on February 23, 1990  the  Rent  Administrator
          determined that the tenant had been overcharged $8,974.92 by  the
          prime tenant and $84.56 by the owner as of July  30,  1989,  both
          amounts including treble damages.

          In this petition, the prime tenant contends in substance that his 
          sister took in the tenant as an act of kindness, paying his share 
          of the rent and other bills; when she went into the hospital with 
          a terminal illness her father paid all the bills; that the tenant 
          used all the household furnishings and appliances; that this, and 
          the debt of approximately $6,000.00 owned to the  prime  tenant's
          sister and father for their payment of the tenant's  bills,  were
          taken into account when the rent of $550.00 was agreed upon; that 
          the rent therefore represented the lawful rent  of  $410.16  plus
          10% for a furnished apartment plus the tenant's  indebtedness  to
          the prime tenant's family; and that the tenant  willingly  agreed
          to this amount.

          The Commissioner is of the opinion that this petition  should  be
          granted in part.

          On June 1, 1987 the prime tenant wrote:

               I Stuart Smith give Raymond permission  to  sublet  live
               at 3211 Ave. I Apt. 3W until April 1989  with  the  rent
               to be paid  to  me  (Stuart  Smith)  in  the  amount  of
               $550.00 (five hundred fifty dollars).  The  rent  is  to
               be mailed to me by the 30th of each month.

          By its terms this provides for the payment of $550.00 in rent, an 
          amount in excess of the lawful rent for the  furnished  subleased
          apartment.  While the prime  tenant  contends  that  the  $550.00
          included debt repayment, side agreements  for  payment  of  other
          obligations cannot be part of the rent, since the rent laws could 
          easily be evaded by claiming that what appeared to be an unlawful 
          rent  actually  included  various  other  payments.   The   prime
          tenant's subleasing of the apartment, without the owner's consent 
          or even knowledge, for $550.00 when he was paying the owner  only
          $410.16  evinces   a   profiteering   intent   that   cannot   be

          Because the prime tenant states that the apartment was furnished, 
          and the tenant in his complaint  stated  his  belief  that  there
          should have been a 10% surcharge for the subleased apartment, the 
          Commissioner  has  recalculated  the  lawful  rents  during   the
          sublease by  including  the  10%  increase  applicable  during  a
          sublease for furniture which is not part of the rent in the prime 

          EC 210422 RT
          lease.  The lawful rents and the amount  of  overcharge  are  set
          forth on the amended rent calculation chart attached  hereto  and
          made a part hereof.

          Regarding the contention that the tenant "willingly agreed" to  a
          rent of $550.00, the Commissioner notes that Section  2520.13  of
          the Rent Stabilization Code voids any  attempt  by  a  tenant  to
          waive any benefit of the Rent Stabilization  Law  or  Code.   The
          unlawfully high rent therefore did not become lawful just because 
          the tenant agreed to it.

          This order may, upon the expiration of the period  in  which  the
          owner may institute a proceedi g  pursuant  to  Article  seventy-
          eight of the civil practice law and rules, be filed and  enforced
          by the tenant against the prime tenant in the same  manner  as  a

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

          ORDERED, that this petition be, and the same hereby  is,  granted
          in part and that the  Administrator's  order  be,  and  the  same
          hereby is, modified in accordance with this  Order  and  Opinion.
          The overcharge, including excess security of  $3.02,  collectible
          from the owner is $84.56 for  the  period  through  November  30,
          1989.  The overcharge collectible from the  prime  tenant  Stuart
          Smith  is  $6,398.91.   The  lawful   stabilization   rents   are
          established on the attached chart, which is fully made a part  of
          this order.

                                                  ELLIOT SANDER
                                                  Deputy Commissioner


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