FG 410258-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

          -----------------------------------X
          IN THE MATTER OF THE ADMINISTRATIVE  ADMINISTRATIVE REVIEW
          APPEAL OF                            DOCKET NOS.: FG 410258-RO,
                                                           FG 410356-RT

               Polsim Consultants, Inc.,       DISTRICT RENT ADMINISTRATOR
               (Fredric Kupersmith,            DOCKET NO.: ZCL-410010-RP;
               President), owner, and                      ZL-3115145-RT;
               David Neiger, tenant,                        L-3115146-RT;
                                                               CDR   18097;
                                               Prime Tenant of Apt. 2C: 
                                               Amy Kupersmith
                                                            
                                   PETITIONER               
          -----------------------------------X

           ORDER AND OPINION GRANTING PETITIONS FOR ADMINISTRATIVE REVIEW
                                       IN PART

          On July 15, 1991 the above named petitioners filed Petitions  for
          Administrative Review against an order issued on June 12, 1991 by 
          the Rent Administrator, 92-31 Union Hall Street, Jamaica, 
          New York concerning housing accommodations known as Apartment  2C
          and Apartment 3A at 239 East 81st  Street,  New  York,  New  York
          wherein the Rent Administrator determined that the owner and  the
          prime tenant of Apartment 2C had overcharged the tenant.

          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, 1987.

          The issue in these appeals 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 Sections 2526.1(a)  and  2526.1(d)  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 rent overcharge complaints by the  tenant,  in  which  he
          stated  (in  Docket  No.  L-3115145-R)  that  he  had   commenced
          occupancy of Apartment 2C as a purported subtenant of one of  the
          owner's daughters, Amy Kupersmith, at a rent of $600.00 per month 






          FG 410258-RO
          pursuant to a lease commencing July 23, 1982,  and  in  which  he
          stated  (in  Docket  No.  L-3115146-R)  that  he  had   commenced
          occupancy of Apartment 3A at a rent of $420.00 per month pursuant 
          to a lease commencing January 16, 1983.  He  contended  that  the
          owner had informed him that the former prime tenant of  Apartment
          2C, Linda Naslanic, had assigned her lease to Amy Kupersmith with 
          the understanding that Ms. Naslanic had the option  of  returning
          on June 30, 1983; that if she did not exercise  her  option  then
          the tenant would have the first option to become the prime tenant 
          at a rent of "under $500.00"; and  that  a  security  deposit  of
          $900.00 would be necessary because he was subleasing a  furnished
          apartment.  He contended that Amy  Kupersmith  never  resided  in
          Apartment 2C; that he was told by Linda Naslanic  that  when  she
          left in July of 1982 she had a rent of $422.00 in  a  lease  that
          ran until June 30, 1983 [he later amended this to $322.40];  that
          on January 15, 1983 he moved from Apartment 2C to  Apartment  3A;
          that Mr. Kupersmith would not let him swap apartments  unless  he
          bought the furniture in Apartment 3A (some of which, he was told, 
          belonged to Linda Naslanic and  some  to  Ronni  Kupersmith,  the
          owner's  other  daughter  and  allegedly  the  prime  tenant   of
          Apartment 3A) for  $1,800.00;  that  Mr.  Kupersmith  refused  to
          bargain for either additional items  or  a  lower  price,  saying
          "[y]ou are buying an apartment.  The $1,800 represents the amount 
          of rent you will save  over  the  next  10  months  between  your
          current rent of $600.00 and the new rent of  $420.00";  that  Mr.
          Kupersmith agreed to  accept  the  $900.00  security  deposit  on
          Apartment 2C as a down payment and to have  the  tenant  pay  six
          further installments to Ronni Kupersmith c/o Polsim  Consultants;
          that several of the items were never  delivered  to  the  tenant,
          including the sofa and the cot bed; that others were discarded as 
          useless; and that the owner has  practiced  similar  "key  money"
          arrangements on other tenants.

          In  Docket  No.  L-3115146-RT  (Apartment  3A)  the   owner   was
          requested to submit a complete rental history from the base  date
          and was informed of the possibility of treble damages.  The  only
          reply from him was four letters stating that he had not  received
          the tenant's complete complaint.  Based on  an  answer  from  the
          tenant that the owner had made an adjustment, and that the tenant 
          had cashed the check as being an incomplete  settlement,  without
          prejudice  to  his  rights,  the  Administrator  terminated   the
          proceeding on June 13, 1986 on the grounds that the  parties  had
          negotiated a settlement and requested that the  case  be  closed.
          The tenant appealed this in ART 11245-L.  On November 22, 1988 an 
          order was issued remanding the proceeding for a determination  on
          the  merits  of  the  tenant's  overcharge  complaint.   The  new
          proceeding was assigned Docket No. L-410010-RP, and also included 
          a reconsideration of Docket No. L-3115145-RT (Apartment 2C).

          In Docket No. L-3115145-RT the owner stated that  he  bought  the
          building in 1977 to move his family into; that he was  forced  to
          incorporate to obtain bank financing; that the  Conciliation  and
          Appeals Board would not allow him to refuse to  renew  leases  in
          order to take possession of apartments for his family,  since  he
          owned the building as a corporation and not an  individual;  that
          he has therefore waited for apartments to become vacant  for  his
          family; that Apartment 2C became available in July  of  1982  and
          was rented to his daughter Amy Kupersmith, who shortly thereafter 
          sublet it to the tenant and returned to college in  Albany;  that






          FG 410258-RO
          it was their expressed intent to sublet such apartment until  his
          daughter completed her studies  and  returned;  that  the  tenant
          paid his rent checks to Amy Kupersmith  c/o  Polsim  Consultants,
          Inc.; that he sent them to  Amy  Kupersmith  c/o  Kupersmith  who
          maintain a mail drop at 239 East  81st  Street;  that  they  were
          forwarded to Amy Kupersmith in Albany; that there is no "illusory 
          prime tenancy" scheme; and that the Courts have found in  similar
          circumstances that subleases to an owner's children were  not  an
          attempt to evade the rent stabilization laws.

          During the course of the proceeding the owner maintained that  he
          did not have to submit rental records for Apartment  2C  for  the
          period prior to the sublease to  his  daughter.   Amy  Kupersmith
          contended that her prime rent of $545.00 per month  entitled  her
          to sublease the furnished apartment to the  tenant  for  $600.00;
          that she collected $900.00 in security, which was returned to the 
          tenant when he departed, although she did not  keep  a  cancelled
          check or get a receipt to prove that it  was  refunded  by  being
          applied to the purchase of her furniture; and that  she  received
          employment from  a  New  York  City  firm  after  graduation  and
          continued to live in Apartment 2C as a full time resident.

          On October 20, 1989 the Administrator issued an order finding  no
          overcharge in the subtenant's rent, but directing the  refund  of
          $900.00 excess security from Amy Kupersmith.  Copies of the order 
          were sent only to the tenant's attorney, and  to  the  tenant  in
          care of his attorney.  Both were returned by the Postal  Service.
          On January 17, 1991 the Administrator issued a notice  of  intent
          to reopen the proceeding, and to consolidate it with  Docket  No.
          L-3115146-RT in Docket No. CL-410010-RP.

          In the new proceeding the tenant  contended  among  other  things
          that Amy Kupersmith's rent for Apartment  2C  clearly  could  not
          have lawfully been $545.00, since Linda Naslanic had  a  rent  of
          $322.40; that even Ms. Kupersmith's assertion of her  entitlement
          to a 10% furnishings allowance  was  patently  false,  since  the
          December 21, 1982 [5 months after the tenant commenced  occupancy
          and less than 1 month before he moved  to  Apartment  3A]  letter
          from the owner to  Linda  Naslanic  about  the  purchase  of  her
          furniture indicates that the furniture did not even belong to Ms. 
          Kupersmith; that her assertion that the security deposit was  not
          returned because of an arrangement  to  purchase  furnishings  is
          another indication of  the  fraudulent  nature  of  her  tenancy,
          because there never  was  such  a  purchase  arrangement  between
          himself  and  Amy  Kupersmith;  that  the  $900.00  was  in  fact
          confiscated by Mr. Kupersmith as part  of  an  illegal  $1,800.00
          "key money" payment he required as  a  condition  of  giving  the
          tenant a lease on his present  apartment,  number  3A;  that  the
          "Bill of Sale", ambiguously phrased as to the actual  furnishings
          to be delivered [and signed on December 22, 1982, one  day  after
          Mr. Kupersmith wrote Linda Naslanic to confirm  the  purchase  of
          some of  her  furnishings  in  Apartment  2C  for  $675.00],  was
          executed by the tenant with Ronni Kupersmith, the  owner's  other
          daughter, allegedly for furnishings contained  in  Apartment  3A;
          that  the  remaining  $900.00  of  "key  money"  was  paid  in  6
          installments to Ronni, not Amy,  Kupersmith;  that  most  of  the
          "furnishings" were never actually delivered; and that it is clear 
          that these two apartments were controlled not by  distinct,  bona
          fide tenancies of  Amy  and  Ronni  Kupersmith,  but  by  "shams"






          FG 410258-RO
          arranged by Fredric Kupersmith, President and Managing Agent  for
          Polsim Consultants, Inc.

          In reply, the owner asserted among other things that Apartment 3A 
          was rented to  Ronni  Kupersmith  when  it  became  available  in
          September,  1982;  that  she  vacated  only  when  another,  more
          attractive apartment became available in the building;  that  she
          took residence in Apartment A until 1986; that the tenant did not 
          pay the rent for Apartment 3A  to  Ronni  Kupersmith  c/o  Polsim
          Consultants,  Inc.,  but  rather  to  Ronni  Kupersmith  c/o  Amy
          Kupersmith in Apartment 2C; that the checks were  then  forwarded
          to Ronni Kupersmith at her University [all but one of the $150.00 
          checks made out to Ronni Kupersmith and endorsed by her were then 
          endorsed by Fredric Kupersmith]; that the tenant was happy to  be
          able to purchase the furnishings from Ronni Kupersmith; that  the
          owner understood that the tenant was able to  bargain  the  price
          down from  $2,500.00  to  $1,800.00,  and  to  stretch  half  the
          payments out over six  months  [the  tenant  contended  that  his
          dealings  concerning  the  furnishings  were  directly  with  the
          owner]; that a father has an obligation to  assist  his  children
          when they are out-of-town students  nearing  college  graduation;
          and that  the  tenant  was  advised  several  times  and  clearly
          understood that he was  dealing  with  Ronni  Kupersmith  at  all
          times.  [Elsewhere the tenant had contended that he had never had 
          dealings of any kind with Ronni Kupersmith, and that all  of  the
          arrangements regarding his two tenancies were conducted with  Mr.
          Kupersmith.]

          In an order issued in Docket No. CL-410010-RP on June  12,  1991,
          the Administrator found an  overcharge  of  $1,983.50,  including
          "excess security" of $900.00, by Amy Kupersmith for Apartment  2C
          based on no increase in a lease assignment rather than a sublease 
          from July 1,  1982  to  June  30,  1983,  and  an  overcharge  of
          $17,919.40, including a  "fixture  fee"  of  $900.00,  by  Polsim
          Consultants for Apartment 3A as of June 30, 1991 as a  result  of
          using the DHCR default formula to establish the tenant's  initial
          rent, and imposing interest on overcharges occurring on and after 
          April 1, 1984.

          In his  petition  against  the  order,  the  tenant  contends  in
          substance that  the  Administrator  should  have  awarded  treble
          damages and legal fees, and should find Amy Kupersmith to  be  an
          illusory tenant so that he can enforce the order  against  Polsim
          Consultants for that portion of the overcharge.

          The owner did not submit an  answer  to  the  tenant's  petition,
          although given an opportunity to do so.

          In his petition, the owner asserts in substance that the tenant's 
          sublease from July 23, 1982 to June 30, 1983 did  not  cover  the
          July 15, 1982 to August 31, 1984 term of  the  prime  lease  [the
          owner cites the June 17, 1982  non-stabilized  Standard  Form  of
          Apartment lease between Amy Kupersmith and  Polsim  Consultants];
          that  the  tenant  therefore  received  a  sublease  and  not  an
          assignment;  that  Amy  Kupersmith's  history  of   moving   into
          Apartment 2C after graduation and maintaining  her  proven  prime
          residence there for many years is proof that she had a true lease 
          and not an assignment; that the tenant was correctly charged  10%
          over Amy Kupersmith's rent of $545.00 for a furnished  apartment;






          FG 410258-RO
          that the tenant has admitted that the  $900.00  security  deposit
          for Apartment 2C was returned when he requested Amy Kupersmith to 
          turn the $900.00 over to Ronni Kupersmith to assist in paying for 
          furniture  in  Apartment  3A;  that  the  agreement   for   Ronni
          Kupersmith's furniture was a tenant/subtenant  sale  and  not  an
          owner/tenant exchange of  goods  and  services;  that  the  owner
          should therefore not have to furnish proof of value or to  refund
          the $900.00 collected for furnishings; and that a rental  history
          for Apartment 3A was submitted on February  6,  1991.   With  his
          petition the owner has enclosed leases from 1973 and invoices for 
          $1,273.20 for a new refrigerator, bath cabinet, custom blinds and 
          air conditioner.

          In answer,  the  tenant  generally  repeats  previous  assertions
          regarding the owner's submission of  inconsistent  documents  and
          his failure to submit evidence that his daughters  actually  paid
          rent.  He also contends in substance that the leases and invoices 
          now submitted by the owner were not submitted  below  and  should
          not be considered; that Apartment 3A  contained  an  ancient  air
          conditioner, which soon had to be replaced,  when  he   commenced
          occupancy in January, 1983, even though the owner was  granted  a
          rent increase for supposedly having installed a new unit in 1979; 
          that bath cabinets and venetian blinds may not form the basis for 
          a rent increase; that the refrigerator, if new in 1979, certainly 
          aged quickly; and that there is no proof of payment regarding any 
          of the alleged improvements.

          The Commissioner is of the opinion that  these  petitions  should
          be granted in part.

          The  state  legislature  has  acted   to   encourage   legitimate
          subletting to protect the primary residence of a person who  must
          perchance be away from hom (i.e. on business) for a brief  period
          of time (Section 223-b Real Property Law).  Where,  however,  the
          so-called "prime tenant" rents dwelling unit(s) not  for  his  or
          her own use and occupancy but as a middleman for re-rental to  an
          actual occupant at amounts and  under  terms  of  tenancy  wholly
          inconsistent with the  law,  the  true  tenant  in  occupancy  is
          deprived of his or her right to pay no more than the lawful  rent
          due the owner, his or her choice of  renewal  lease  terms,  base
          date services, and/or protection from  stabilization  system  and
          Section  62  of  the  former  Rent  Stabilization  and   Sections
          2525.3(d) and (e) of the  current  Code  bar  a  "prime  tenancy"
          rental pattern as an evasion.  The DHCR will not countenance such 
          an evasion and  shall  void  illusory  prime  tenancies.   To  do
          otherwise  could  render  the  Rent  Stabilization   Law   wholly
          ineffectual: that which cannot be done direcly  would  simply  be
          done in the name of a third person were the DHCr to  ignore  this
          practice.

          Courts have defined an illusory prime tenant  as  "a  party  who,
          while assuming the  guise  of  a  prime  tenant,  enters  into  a
          sublease arrangement which has the effect, directly or indirectly 
          of  evading  the  requirements  of  the  Rent  Stabilization  Law
          (emphasis added)."  Avon Furniture Leasing,  Inc.  v.  Popolizio,
          500 N.Y.S.2d 1019, appeal denied 508 N.Y.S.2d 1028.  One  typical
          type of illusory prime tenancy occurs where the prime tenant  has
          an identity of interest with the owner, where  the  prime  tenant
          never takes possession, where the subtenant pays rent directly to 






          FG 410258-RO
          the owner, and where the owner evades the Rent Stabilization  Law
          by being able to overcharge the subtenant and/or deny  the  right
          to a renewal lease.   Another  typical  type  of  illusory  prime
          tenancy occurs where the prime tenant is not an alter ego of  the
          owner, but where such prime tenant evades the Rent  Stabilization
          Law, while failing to take possession, by charging an  unlawfully
          high rent to a subtenant who pays rent  directly  to  such  prime
          tenant.

          The Commissioner is of the opinion, based on the evidence in  the
          record,  that  the  tenancies  of  the  owner's   daughters   Amy
          Kupersmith (Apt. 2C) and Ronnie Kupersmith (Apt.  3A),  prior  to
          occupancy of these apartments by the  tenant  herein,  were  sham
          tenancies; that the Kupersmith daughters  were  illusory  tenants
          or prime tenants, the  the  "prime  tenancy"  of  Amy  Kupersmith
          attempted to be  a  combination  of  the  two  types  of  typical
          illusory prime tenancies mentioned above, allowing Amy Kupersmith 
          to receive a rent in excess of the lawful rent for  an  apartment
          which she did not actually occupy pursuant to her  own  lease  or
          sublease,  and  by  allowing  her  father  (whether  or  not  Amy
          Kupersmith actually gave the excess rent to him) to  have  leases
          to justify rents for the complainant  and  future  tenants  which
          would actually be unlawfully high; and that the  "subleasing"  of
          Apartment 2C was in fact an assignment by  which  Amy  Kupersmith
          gave the  complainant  all  of  the  rights  which  she  actually
          possessed to that apartment.

          To aid in understanding the  sham  tenancies  and  misrepresented
          transactions involving the owner and his daughters, a  chronology
          of  some  events  and  documents  is  set   forth   below,   with
          parenthetical remarks.


          2C-1      June 17, 1982: Date of sublease from Linda Naslanic  to
                    Amy Kupersmith from July 1, 1982 to June  30,  1983  at
                    rent of $322.40.  [In a March 14, 1984 affidavit  Linda
                    Naslanic states that she was paying  $322.40  in  June,
                    1982, that she was refused permission  to  sublet,  and
                    that she was required to sublet to Amy Kupersmith.  She 
                    enclosed cancelled  rent  checks  for  $322.40,  and  a
                    December 21, 1984 letter from  the  owner  agreeing  to
                    terminate her lease expiring January  31,  1984  as  of
                    December 31, 1982.  (The earliest  lease  submitted  by
                    either the owner or Amy Kupersmi h  in  Docket  No.  L-
                    3115145 was  her  "prime  lease"  commencing  July  15,
                    1982).  See also documents in 2C-2 and 2C-9 conflicting 
                    with this sublease]

          2C-2     June 17, 1982: Date of non-stabilized lease between  the
                    owner and Amy Kupersmith from July 15, 1982  to  August
                    31, 1984 at rent of $545.00.  The owner also supposedly 
                    collected a $545.00 security deposit from his daughter. 
                    [See also documents in 2C-1 and 2C-9  conflicting  with
                    this lease.] This  lease  did  not  mention  the  prior
                    tenant's rent.

          2C-3     June 25, 1982: Date of letter from the  owner  to  Linda
                    Naslanic stating that he will not hold her  responsible
                    for the rent if the subtenant Amy Kupersmith  does  not






          FG 410258-RO
          pay it, but in such event the lease will  terminate  30
                    days later.

          2C-4     July 23, 1982: Date of sublease between  Amy  Kupersmith
                    and the tenant from July 23, 1982 to June 30, 1983 at a 
                    rent  of  $600.00.   Security  is  $900.00,   and   the
                    overlease is stated to end on June 30, 1983.  [See 2C-2 
                    and 2C-9 for leases  conflicting  with  this  overlease
                    expiration date].

          2C-5     July 26, 1982: Date of letter  from  the  owner  to  the
                    tenant stating that the tenant will have  first  option
                    on the apartment if it becomes available, that "I  must
                    add that there  will  probably  be  some  sale  of  the
                    Apartment's furnishing connected with the  new  lease,"
                    and that the rent would probably be under $500.00.

          2C-6     December 21, 1982: Date of  letter  from  the  owner  to
                    Linda Naslanic  confirming  an  agreement  that  he  is
                    buying her furniture (except for the sofa) for  $675.00
                    and that her lease due to expire January 31, 1984  will
                    terminate December 31, 1982.

          2C-7     December 22, 1982: Date  of  Bill  of  Sale  with  Ronni
                    Kupersmith for the tenant to buy some of the  furniture
                    in Apartment 3A.  (But Amy Kupersmith  claimed  in  one
                    submission that she kept the $900.00 security  for  the
                    purchase of her furniture  in  Apartment  2C  and  that
                    "[h]e gave me an additional $900.00  to  complete  this
                    transaction.")

          2C-8     January 15,  1983:  Date  that  the  tenant  moves  from
                    Apartment  2C  (subleased  from  Amy   Kupersmith)   to
                    Apartment 3A (allegedly the former primary residence of 
                    Ronni Kupersmith).

          2C-9     March 14, 1984: Date of  stabilized  lease  between  the
                    owner and Amy Kupersmith from July 15, 1982  to  August
                    31, 1984 at a rent of $545.00.  A rider states that the 
                    prior tenant Linda Naslanic had a rent of $425.78. (See 
                    also documents in 2C-1 and 2C-2 conflicting  with  this
                    lease.)  This is the lease originally submitted by  the
                    tenant on March 1, 1984 and by the owner on October 24, 
                    1984.  After the tenant submitted evidence on September 
                    24, 1986  that  Linda  Naslanic  last  had  a  rent  of
                    $322.40, the owner on February 26, 1991  submitted  the
                    non-stabilized lease (mentioned in  2C-2),  dated  June
                    17, 1982, which did not state the prior  tenant's  name
                    or rent.

          2C-10     June 1, 1986: Date that Amy Kupersmith supposedly moves 
                    from Apartment 2C to Apartment 1D after getting  a  job
                    in New York City.

          2C-11     October 28, 1986: Date of answer  from  Amy  Kupersmith
                    claiming that the $900.00 was returned when the  tenant
                    left, although she did not keep a  cancelled  check  or
                    get a receipt [the tenant contends that it was retained 
                    by the owner as half of the "key  money"  demanded  for






          FG 410258-RO
          him to be given a lease for Apartment 3A.  See also 2C 
                    12 for Amy Kupersmith's later change of position]; that 
                    the July 23, 1982 sublease incorrectly gave  the  prime
                    lease date as July 1, 1982 rather than July 15, 1982 [a 
                    mistake probably  made  because  the  sublease  between
                    Linda Naslanic and Amy Kupersmith (not mentioned by Amy 
                    Kupersmith or her father) began July 1, while  the  two
                    "prime leases" between Amy Kupersmith  and  her  father
                    began July 15]; that her driver's  license  since  1982
                    lists her primary and only residence as 239  East  81st
                    Street [with  no  apartment  number  claimed,  in  this
                    building owned by her family and which  the  owner  has
                    stated has  a  'mail  drop'  used  for  forwarding  the
                    tenant's checks to both Amy and Ronni Kupersmith];  and
                    that she has witnesses and  documents  to  confirm  her
                    residence since 1982 [although this  claim  proves  too
                    much,  if  it  is  an  assertion  about   the   subject
                    apartment,  as  opposed  to  living  in  or  at   least
                    receiving mail elsewhere in the building: both  of  the
                    leases between her and her father at a rent of  $545.00
                    state that  they  begin  on  July  15,  1982,  and  the
                    sublease with the tenant began only 8 days after  that.
                    The complainant contends that she used the building  as
                    a mail drop, and that she lived in Apartments 1C or  1D
                    during summer vacations].

          2C-12     October 11, 1989: Amy Kupersmith states in a submission 
                    that "[t]he return of $900.00 was applied as  a  Credit
                    towards the $1,800.00 he paid me for the purchase of my 
                    furniture which he then  moved  from  Apartment  2C  to
                    Apartment 3A.  In other words, Mr.  Neiger  accepted  a
                    Credit of $900.00 (his Security Deposit) and gave me an 
                    additional $900.00 to complete this transaction."  [See
                    also 2C-11 for a conflicting claim].

          2C-13     February 26, 1991: The owner submits  Amy  Kupersmith's
                    1983  tax  return  (dated  April  14,  1984)   with   a
                    handwritten address of Apartment 2C, as  well  as  1984
                    and 1985 tax returns with pre-printed  address  labels.
                    The owner also submits affidavits  from  three  of  Amy
                    Kupersmith's  friends.   Kathryn  B.  stated  that  Amy
                    Kupersmith "began residency in Apartment 2C...in  July,
                    1982.   She  moved  in  approximately  June,  1986   to
                    Apartment 1D..."  [But the tenant began  his  occupancy
                    July  23,  1982;  Amy  Kupersmith  could  have   "begun
                    residing" for 8 days at most].  Lesley B.  stated  that
                    "Amy Kupersmith established her  primary  residence  at
                    Apartment 2C at 239 East 81 Street.  She lived  in  the
                    building until sometime in  1989.   She  switched  from
                    Apartment 2C to 1D sometime in 1986."  [This  does  not
                    state when she began living in Apartment 2C].  Jodi  L.
                    stated that Amy Kupersmith "rented an apartment at  239
                    East  81st  Street  (apt.  2C)  in  July,  1982.    She
                    maintained this  apartment  as  her  primary  residence
                    until the summer of 1986 when she  moved  to  apartment
                    1D..."  [She  indeed  "rented"  Apartment  2C,  with  3
                    different leases or subleases, all  starting  in  July,
                    1982 at a rent of $322.40 or of $545.00.  She certainly 
                    did not occupy the unit from July 23, 1982  to  January






          FG 410258-RO
          15, 1983.  She apparently was living in  the  apartment
                    at least as of 1986 when she moved to Apartment 1D].

          Mr. Kupersmith has had some difficulty in maintaining consistency 
          in his submissions and in the documents which he prepared for the 
          tenant and his daughters to sign.  The March 14, 1984  stabilized
          lease with his daughter for Apartment 2C through August 31,  1984
          at a rent of $545.00 and stating a previous rent of $425.78,  and
          possibly prepared to  help  furnish  a  basis  for  a  continuous
          stabilized rental history, is only moderately different from  the
          June 17, 1982  lease,  (non-stabilized  and  not  mentioning  the
          prior tenant's rent)  with  her  for  the  same  rent  and  term.
          However, the owner, who did not submit any prior tenants'  leases
          for  the  apartment,  apparently  did  not   foresee   that   the
          complainant would be able to obtain a copy of the  sublease  from
          Linda Naslanic to Amy Kupersmith  to  June  30,  1983,  of  Linda
          Naslanic's rent checks for $322.40, or of the December  21,  1982
          letter from the owner to Linda Naslanic which agreed to terminate 
          her lease on December 31, 1982  rather  than  January  31,  1984.
          Absent these documents, the leases submitted by the owner for Amy 
          Kupersmith would give the impression that she had a normal  lease
          expiring August 31, 1984, and that  she  was  subleasing  to  the
          tenant for  the first half of her lease term.  In reality, at the 
          time that the tenant's sublease was signed [and indeed  up  until
          two weeks before the tenant vacated], Amy  Kupersmith  had  legal
          rights to Apartment 2C,  obtained  by  her  sublease  form  Linda
          Naslanic, only until June 30, 1983.  She gave away all  of  those
          rights when she subleased to the tenant  to  that  date,  so  the
          purported sublease was actually an assignment.

          The file for Docket No. CL-410010-RP contains a February 6,  1991
          submission by the owner which includes a rental history chart for 
          Apartment 3A from 1973.  The owner contends in this  appeal  that
          he had also submitted leases and other documents to support  that
          chart.  The only February  6,  1991  submission  from  the  owner
          contained in the file of the proceeding before the  Administrator
          is a photocopy of  a  4-page  answer,  which  includes  a  rental
          history chart listing leases and rents from the base date,  which
          mentions that the  owner  is  enlosing  Attachments  [plural]  to
          answer the tenant's complaint, and which notes that it  is  being
          mailed by  Certified  Mail  receipt  #P  281-400-942.   With  his
          petition the owner  has  enclosed  a  February  6,  1991  mailing
          receipt for #P 281-400-942, with a basic postage of $2.90.   This
          postage is consistent with the 1 pound, 12 ounce weight of the 28 
          Attachments which the owner claims to have submitted on  February
          6, 1991.  This postage is not  consistent  with  the  four  pages
          actually contained in the  record.   It  appears  that  the  DHCR
          photocopied the text of the answer  when  it  was  received,  and
          subsequently lost  the  originals,  including  approximately  135
          pages of attachments.  The Commissioner  therefore  considers  it
          appropriate to accept  those  attachments  which  the  owner  has
          submitted.  The Commissioner has made use  of  those  leases  and
          documents to calculate the lawful  stabilization  rents  and  the
          amount of overcharge.  They are set forth on a  an  amended  rent
          calculation chart attached hereto and made  a  part  hereof.   No
          increase has been allowed for Ronni Kupersmith's lease commencing 
          September 11, 1982 as the owner has submitted no  evidence,  such
          as rent checks, or a check for the  security  deposit  which  her
          lease claims she paid, to show that hers was a legitimate tenancy 






          FG 410258-RO
          warranting  a  rent  increase.   Indeed,  unlike  the  case  with
          Apartment  2C,  where  there  is  at  least  evidence  that   Amy
          Kupersmith lived in the apartment beginning at some  point  after
          the tenant vacated it, it appears likely  that  Ronni  Kupersmith
          has never resided in  Apartment  3A.   The  tenant  submitted  an
          affidavit from the long-time occupant of Apartment 3C, across the 
          hall from Apartment 3A, that she told the tenant of a vacancy  in
          Apartment 3A after Joanne Wilhelm  vacated,  that  she  does  not
          remember anyone occupying the apartment  between  Joanne  Wilhelm
          and the tenant,  and  that  she  does  not  recall  seeing  Ronni
          Kupersmith in the building or listed on any mailboxes.  Since the 
          owner stated that Ronni Kupersmith was  a  college  student,  and
          since the tenant occupied  Apartment  3A  beginning  in  January,
          1983, it seems most likely that she  was  away  for  the  1982-83
          academic year and did not live in the apartment at or  after  the
          time that she signed a non-stabilized lease with  her  father  on
          September 11, 1982.

          While the tenant contended in an answer that a prior tenant  Mary
          Donia visited Apartment 3A in 1984 and noticed  no  improvements,
          this assertion is not sufficient to negate the invoices  for  new
          equipment submitted by the owner.  Regarding the increase for the 
          air conditioner, the tenant's contention that it was  an  ancient
          one which was soon replaced would at most indicate  that  another
          unit was put in  for  which  no  further  increase  was  charged.
          (Indeed, no increase would generally be allowed for  a  new  unit
          installed during the useful life  of  a  unit  for  which  a  new
          equipment increase was previously allowed).


          Regarding the $1,800.00 which  the  owner  alleges  was  for  the
          purchase of furniture from Ronni Kupersmith, as  evidenced  by  a
          December 22, 1982 Bill of Sale, and which the tenant alleges  was
          largely mandatory "key money": The Bill of Sale was for  a  chest
          on chest, bathroom carpet and  louvered  blinds,  which  were  in
          Apartment 3A, and a cot  and  convertible  sofa,  which  were  in
          Apartment 2C.  The value of the convertible sofa can be  seen  by
          the fact that Ronni Kupersmith had the option, if the sofa  could
          not be delivered, of substituting a bar  stool,  a  TV  stand,  3
          cardboard transfiles, a towel holder, a Vogue picture and  dishes
          for four people.  In fact, the confirmation letter that the owner 
          had written to Linda Naslanic, one day prior to the Bill of  Sale
          between  the  tenant  and  Ronni  Kupersmith,  had   specifically
          excluded  the  convertible  sofa  from   purchase.    Given   the
          apparently limited value of the furnishings that the  tenant  was
          receiving; the fact that the July 26, 1982 letter from the  owner
          to the tenant regarding the possibility of a "direct  lease"  for
          Apartment 2C stating that" I must add that there will probably he 
          some sale of the Apartment's furnishings connected with  the  new
          lease" could be read as an indication that the owner intended  to
          require the purchase of furniture as a condition for  the  tenant
          being given his own lease; the fact that  the  tenant  has  sworn
          that  all  arrangements  for  the  rental  of  both   apartments,
          including the demand that the tenant sign the "Bill of Sale"  for
          unwanted furnishings as a precondition for obtaining a lease  for
          Apartment 3A, were carried out between  himself  and  the  owner,
          with no conversations or correspondence with either Amy or  Ronni
          Kupersmith; and the fact that 5 of the 6 checks from  the  tenant
          to Ronni Kupersmith for the $900.00  balance  for  the  furniture






          FG 410258-RO
          were cashed by the owner, leads to a conclusion  that  the  owner
          was actually requiring "key  money"  under  the  pretext  of  the
          tenant's supposedly voluntary purchase of some furnishings, which 
          furnishings appear to have been worth nowhere near $1,800.00  and
          most of which the tenant contends were not  even  given  to  him.
          (The Commissioner notes that the new equipment installed in 1979, 
          for which the owner charged a rent increase, included $412.61 for 
          one 52" wide and two 31" wide  custom  blinds  in  this  one-room
          apartment.  The "Bill of Sale"  with  Ronni  Kupersmith  has  the
          tenant supposedly paying for blinds.  In addition,  as  mentioned
          above, it appears that the convertible sofa from Apartment 2C was 
          not available for delivery  to  the  tenant).   It  appears  that
          there was minimal involvement by the  owner's  daughters  in  his
          "key money" scheme.  Amy Kupersmith, who  might  be  expected  to
          remember whether or not, as she claimed on October  11,  1989  to
          have done, she sold her  furniture  for  $1,800.00  and  received
          $900.00  from  the  tenant  as  well  as  retaining  the  $900.00
          security deposit for herself, was apparently not aware  that  her
          father had set up  the  transaction  so  that  it  was  in  Ronni
          Kupersmith's name and so that  the  checks  were  sent  to  Ronni
          rather  than  to  Amy  Kupersmith.   [On  October  28,  1986  Amy
          Kupersmith  had  alleged  that  she  had  returned  the   $900.00
          deposit].  This order continues holding Amy Kupersmith liable for 
          the $900.00 security deposit  which  she  was  holding  in  trust
          pursuant to a binding contract, the  sublease  agreement.   While
          the tenant has stated that it was applied to the purchase of  the
          furniture  [a/k/a  "key  money"],  there  has  been  no  evidence
          submitted that Amy Kupersmith was directed or authorized  by  the
          tenant to pay the money over to Ronni Kupersmith or  her  father,
          nor is there any documentation that it was  actually  paid  over.
          In addition, Amy Kupersmi h  has  not  appealed  Order  No.  ZCL-
          410010-RP, which among other things held her  solely  liable  for
          the $900.00 security deposit.  This order is without prejudice to 
          any rights which Amy Kupersmith may have against  her  father  or
          her sister in a court of competent jurisdiction.

          Because of the limited value of whatever "furnishings" the tenant 
          actually received as a result of the owner's  key  money  scheme,
          this order also continues holding the owner liable for the return 
          of the $900.00 "fixture fee".

          Section 2526.1(a)(1)  of  the  current  Rent  Stabilization  Code
          provides in substance that treble damages  shall  be  imposed  on
          overcharges occurring on and after April 1, 1984 unless an  owner
          establishes  by  a  preponderance  of  the  evidence   that   the
          overcharge was not willful.  The Commissioner does  not  consider
          the owner to have rebutted the  presumption  of  willfulness,  so
          treble damages have been imposed.

          While Amy Kupersmith apparently resided in Apartment 2C  at  some
          point subsequent to the tenant, the  Commissioner  considers  her
          "prime  tenancy"  commencing  July  15,  1982  to  have  been  an
          illusory one perpetrated by the owner to unlawfully increase  the
          stabilized rent for legitimate tenants.  Because both  the  owner
          and  Amy  Kupersmith  participated  in  common  in  this  scheme,
          including the joint signing of both  a  non-stabilized  lease  to
          August 31, 1984 at a rent of $545.00 on the  same  day  that  Amy
          Kupersmith subleased from Linda Naslanic to June 30,  1983  at  a
          rent of $322.40, and of a stabilized lease 21 months later,  also






          FG 410258-RO
          to August 31, 1984, which falsely stated that Linda Naslanic  had
          a rent of $425.78, the Commissioner finds them to be jointly  and
          severally liable for the $1,132.75 overcharge  on  Apartment  2C,
          whether or not the owner was directly  paid  rent  money  by  the
          tenant.

          Section 2526.1(d) of the current Rent Stabilization Code provides 
          in pertinent part that an owner may be directed to pay a tenant's 
          reasonable costs and attorney's fees.  The tenant did not request 
          them  in  the  proceedings  before  the  Administrator,  so   the
          Administrator was warranted in not awarding them.

          Because this  order,  similarly  to  the  Administrator's  order,
          concerns overcharges only through June 30,  1991,  the  owner  is
          cautioned to adjust the rent,  in  leases  after  that  date,  to
          amounts no greater than that determined by this  order  plus  any
          lawful increases, and to register any adjusted  rent,  with  this
          order being given as the reason for the adjustment.

          This order may, upon the expiration of the period  in  which  the
          owner and Amy Kupersmith may institute a proceeding  pursuant  to
          Article seventy-eight of the civil practice  law  and  rules,  be
          filed and enforced  by  the  tenant  in  the  same  manner  as  a
          judgement or not in excess of twenty percent thereof per month of 
          the overcharge owed by the owner may be offset against  any  rent
          thereafter due the owner.

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

          ORDERED, that these  Petitions  be,  and  the  same  hereby  are,
          granted in part and that the Rent Administrator's Order N .  ZCL-
          410010-RP be, and the same hereby is, modified in accordance with 
          this Order and Opinion.  The lawful stabilization rents  and  the
          amount of overcharge are established on the attached chart, which 
          is fully made a part of this order.  The total overcharge  as  of
          June 30, 1991 is $900.00 solely attributable to  Amy  Kupersmith;
          $1,132.75 jointly and severally attributable  to  Amy  Kupersmith
          and Polsim Consultants, Inc.; and $30,111.55 solely  attributable
          to Polsim Consultants, Inc.

          ISSUED:

           
                                                       JOSEPH A. D'AGOSTA
                                                       Deputy Commissioner




    

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