EH 410038 RO
                                  STATE OF NEW YORK
                            OFFICE OF RENT ADMINISTRATION
                                     GERTZ PLAZA
                               92-31 UNION HALL STREET
                               JAMAICA, NEW YORK 11433

          APPEAL OF                              DOCKET NO.: EH 410038 RO 
                                                 DOCKET NO.: BK 410223-RV 

          The   above-named   petitioner-owner   filed   a   Petition    for
          Administrative Review (PAR) appealing an order issued on July  20,
          1991, by the Rent Administrator of the Gertz Plaza,  Jamaica,  New
          York Rent Office, concerning the housing  accommodation  known  as
          433 West 21 Street, New York, New  York,  Penthouse,  wherein  the
          Administrator determined the tenant's complaint that the owner had 
          failed to offer the tenant a lease renewal, found  the  tenant  to
          have all the rights of a rent stabilized tenant, and directed  the
          owner to offer the tenant a written renewal  lease  based  on  the
          rental contained in the renewal lease  expiring  on  December  31,
          1989 plus guidelines increases then in effect.

          The  Administrator's  order  further  provided  that  said  rental
          increase was not collectible by the owner until a rent restoration 
          order was issued restoring rent previously  reduced  under  Docket
          No. BK 410658-S.  The  order  was  also  without  prejudice  to  a
          determination of the owner's PAR under Docket  No.  CC  410363-RO.
          The tenant's rent overcharge  complaints  under  Docket  Nos.  DJ-
          410120-R and BK 410618-R were denied on the grounds that issues in 
          the case would be decided under PAR Docket No. CC 410363-RO, which 
          remains open and pending.

          On appeal, the  petitioner-owner  argues  that  the  Administrator
          failed to consider that  the  tenancy  was  not  subject  to  rent
          regulation.  The petitioner points to a stipulation of  agreement,
          prepared by the tenant herein in his capacity as attorney for  the
          former  rent-controlled  tenant  in  Housing  Court   proceedings,
          setting forth, in pertinent part, the following:

               1.  Respondents submit to the jurisdiction of the court; 
               waive any and all defenses that they might have to the 
               proceeding; admit all of the allegations contained in 
               the petition, in particular the allegations that the 
               premises are not the primary residence of the 
               respondent, [former tenant], and that the premises are 
               being occupied by another person, without the consent or 
               approval of the petitioner-landlord and do hereby 
               consent to the entry of a final judgment of possession 
               in favor of the petitioner-landlord with provision for 
               the issuance and execution of the warrant of eviction to 
               be forthwith.

          EH 410038 RO

                                     *  *  *  *

               3.  As a consideration for the execution of this 
               stipulation and the settlement of this proceeding, 
               petitioner shall give to [former tenant] and [tenant] a 
               new three (3) year lease for the subject premises, as 
               co-tenants, beginning on November 1, 1985 and running 
               through October 31, 1988, which apartment shall be 
               decontrolled, at an agreed and negotiated rental.

               4.  Respondent, [former tenant] warrants, represents and 
               acknowledges that she is not using the subject premises 
               as her primary residence and that she has no intention 
               of using the same as her primary residence in the future 
               and that her primary residence is at 540 Second Avenue 
               South, St. Petersburg, Florida.

          In a lease entered into subsequent to the Housing Court 
          settlement, the parties set forth that:

               32.  Tenants, [former and current] warrant, represent 
               and acknowledge that the subject premises are NOT and 
               will NOT become their primary residency and that their 
               respective primary residences are as follows:

               [Former Tenant], 540 Second Avenue South, St. 
               Petersburg, Florida

               [Tenant], 51 West 69th Street, New York, N.Y.

                                     *  *  *  *

               36.  Tenants understand and acknowledge that the within 
               lease is being offered and executed by landlord upon 
               landlord's reliance of all of the Tenants' foregoing 
               warranties and representations and that the truthfulness 
               and validity of the foregoing warranties and 
               representations are the material consideration for the 
               within lease.

          The  petitioner  concedes  that  rent  stabilization   forms   and
          guidelines increase were utilized, as they were convenient for the 
          owner and that the owner registered  that  apartment,  but  argues
          that the registrations were filed in  error,  and  have  no  legal
          significance as to the question of whether the tenancy is  subject
          to rent stabilization.

          EH 410038 RO

          The petitioner concludes  that  the  complainant  "should  not  be
          allowed to obtain stabilization status by this  fraudulent  scheme
          to take over the apartment," as a rent stabilized tenant.

          The tenant responded that the fact that the owner accepted monthly 
          rent since 1985, that two renewal leases were  entered  into,  and
          that the owner  registered  the  apartment  show  that  the  owner
          treated the apartment  as  rent-stabilized.   The  tenant  further
          pointed out that the  owner  served  a  Notice  of  Initial  Legal
          Regulated Rent (Form DC-2) on November 5, 1987, on the former  and
          current tenant as co-tenants.

          The tenant also asserts that the owner refused to enter  into  the
          1985 lease with the tenant unless the current tenant agreed to the 
          owner's non-primary residence language for both  co-tenants.   The
          tenant stated that his former West 69th  Street  address  was  put
          into  the  rider  after  the  tenant  listed  it  on  the  owner's
          application.  The tenant continues that it was also misleading for 
          the owner to represent that the tenant prepared  the  lease  rider
          document and to present it in the PAR as an exhibit in combination 
          with the first page of the Housing Court stipulation.

          The tenant further points out that the Housing  Court  stipulation
          was accurate insofar as it referred to the former tenant as a non 
          primary resident, who had in fact moved out of state and lived  in
          Florida (and who has since died), and  that  it  was  the  owner's
          scheme to list the former tenant as co-tenant in  order  to  avoid
          the rent laws.  It is also noted by the tenant that  none  of  the
          renewal leases referred to the  former  tenant,  that  the  former
          tenant did not pay any of the rent, that the registrations did not 
          list  the  former  tenant,  and  that  none  of   the   subsequent
          proceedings concern the former tenant.

          The applicable law is Section 2522.5(a)(1) and 2525.3 of the  Rent
          Stabilization Code.

          After careful consideration, the Commissioner is  of  the  opinion
          that the petition should be denied.

          The record reflects that the tenant  and  owner  entered  into  an
          initial lease with a co-tenant, but that the renewal  leases  list
          only the tenant as the prime tenant, and  that  the  registrations
          list only the tenant.  If the former tenant retained an  interest,
          none of these documents, prepared  by  the  owner,  reflected  the
          former  tenant's  interest.   While  the  facts  that  the   owner
          registered the premises and granted the tenant lease  renewals  in
          conformity with rent stabilization provisions do not  conclusively
          establish the legal stabilized status of the tenancy, they clearly 
          show that the owner treated the apartment as rent stabilized.

          The record also  reflects  that  the  Housing  Court  stipulation,
          signed by the owner, the former tenant, and the current tenant  as


          EH 410038 RO

          the then attorney for the former tenant, states that the  premises
          were not the primary residence of the former tenant.   There  were
          no representations therein, other than that unnamed  tenants  were
          occupying the premises without the owner's  consent  or  approval.
          The  Housing  Court  stipulation  relates  only  to  the   primary
          residence  of  the  former  tenant.   It  contains  no   provision
          relating to the primary residence of the present tenant.  In  fact
          the petitioner has submitted no evidence below or on appeal, other 
          than the copy of the  rider  to  the  initial  lease  listing  the
          tenant's residence at the  West  69th  Street  address,  that  the
          tenant had any other residence than the  subject  apartment  after
          the parties entered into  the  initial  lease.   Furthermore,  the
          owner, contrary to  the  terms  of  said  stipulation,  thereafter
          registered the apartment for the current tenant.

          The  owner's  contention  that  the   Division   does   not   have
          jurisdiction over  the  subject  apartment  also  ignores  Section
          2525.3 of the Code which states that:

                    (b) No owner or other person shall require a 
               tenant, prospective tenant or a prospective permanent 
               tenant to represent or agree as a condition of renting a 
               housing accommodation that the housing accommodation 
               shall not be used as the tenant's or prospective 
               tenant's primary residence, or the prospective permanent 
               tenant's principal residence.

          The stipulation and the initial lease clause upon which the  owner
          relies clearly violates Section 2525.3 as to the present tenant as 
          neither the Courts nor the  parties  can  make  an  agreement,  by
          stipulation or otherwise, deregulating  an  apartment  subject  to
          statutory protection.

          Insofar as the former tenant was represented in Housing  Court  by
          counsel,  i.e.,  the  tenant  herein,  the  Commissioner  declines
          further consideration as to any right the former tenant  may  have
          in the apartment notwithstanding the  Housing  Court  stipulation.
          The petitioner has not established the allegation that the current 
          tenant acted in bad faith and contrary to professional  ethics  in
          his then capacity as attorney for the former tenant, sufficient to 
          estop the tenant from claiming  rights  under  rent  stabilization

          The Commissioner concurs with the tenant that the  case  cited  by
          the petitioner to support its  claim  is  not  pertinent  to  this
          proceeding.  In Zupnick  v. CAB, N.Y.L.J.,  May  31,  1983,  p.12,
          col.3, Sup Ct., N.Y. Co., (Schwartz, J.),  the  Court  upheld  the
          determination of the Conciliation  and  Appeals  Board  that  rent
          controlled premises did not become subject  to  the  stabilization
          law where the subject apartment became  decontrolled  because  the
          apartment was not being utilized by the tenant's primary 

          EH 410038 RO

          residence, until the occupying tenant vacated the premises, and  a
          new  residential  tenant  took   occupancy.    In   Zupnick,   the
          complainant was the subtenant, never had a lease with  the  owner,
          occupied the apartment as a subtenant,  paid  rent  to  the  prime
          tenant, and had no  legal  relationship  to  the  owner.   In  the
          present case, the tenant  entered  into  an  initial  and  several
          renewal leases with the  owner,  is  a  prime  tenant  and  not  a
          subtenant, was registered by the owner, was named by the owner  in
          the DC-2 notice, and paid rent directly to the owner who  accepted

          In light of the evidence in the record, and in the  absence  of  a
          determination by a Court of competent jurisdiction that the tenant 
          does not occupy subject apartment  as  a  primary  residence,  the
          Commissioner finds that Administrator's determination  was  proper
          and should be affirmed.

          The  Commissioner  further  notes  that  the  owner  attempted  to
          collaterally  attack  the  Administrator's  order  by  seeking   a
          declaratory judgment in the Supreme Court that the  apartment  was
          not subject to the Rent Stabilization Code.  The Supreme Court  in
          Urban Associates v. Hettinger & Hoy, Index No. 13786/90,  February
          7, 1991 (Blaikie, J.), granted the  tenant's  motion  for  summary
          judgment and  dismissed  the  owner's  complaint.   The  Appellate
          Division unanimously affirmed the  lower  court  decision  on  all
          grounds.   The  Appellate  Court  agreed  that  an  action  for  a
          declaratory judgment  was  an  improper  attempt  to  collaterally
          attack the  Administrator's  determination,  and  that  the  owner
          should have exhausted his administrative remedies after which  the
          appropriate proceeding would  be  an  Article  78  petition.   The
          Appellate Court also noted that if it were to review  the  owner's
          contentions or the merits, it would have  agreed  with  the  Court
          below that the stipulation on  which  the  owner  relies  violates
          Section 2525.3 of the Code, and  is  unforceable.   The  Appellate
          Division  further  noted  that  a  representation  of  non-primary
          residence in a stipulation, so ordered, is not to be equated  with
          a judicial finding  of  non-primary  residence.   The  Court  also
          states it did not perceive any basis for a theory  upon  which  an
          estoppel argument  could  be  predicated.   Urban  Associates   v.
          Hettinger & Hoy, Index No. 44498, App Div.,  1st  Dept.  (November
          21, 1991).

          THEREFORE,  in  accordance  with  the  provisions  of   the   Rent
          Stabilization Law and Code, Chapter 403 of the Laws of  1984,  and
          Chapter 102 of the Laws of 1984, it is

          ORDERED, that the owner's petition be  and  the  same  hereby  is,
          denied, and the Administrator's order be, and the same  hereby  is
          affirmed, as provided above.


                                          JOSEPH A. D'AGOSTA
                                          Deputy Commissioner

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