DOCKET NO.: GB 220001-RT
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 : SJR 6610
APPEAL OF ADMINISTRATIVE REVIEW
: DOCKET NO. GB 220001-RT
FRANK INCONIGLIOS, DISTRICT RENT ADMINISTRATOR'S
: DOCKET NOS. EI 220007-AD
PETITIONER
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ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
On January 31, 1992, the above-named tenant filed a petition for
administrative review of an order issued on December 27, 1991 by the Rent
Administrator, concerning the housing accommodation known as Apartment 3-F,
2023 Stillwell Avenue, Brooklyn, New York.
Subsequently, the subject owner filed a petition in the Supreme Court, in
the nature of an application for a writ of mandamus, requesting that a
determination of the tenant's administrative appeal be issued.
No order has been issued upon the aforementioned administrative appeal to
date.
The Commissioner has reviewed all of the evidence of the record and has
carefully considered that portion of the record relevant to the issues
raised by the petition for review.
This proceeding was initiated by the subject owner filing an affidavit,
sworn to an April 26, 1990 (The caption of the affidavit states "Application
to File Decontrol By Reason of Owner Occupancy"), which stated that the
subject owner purchased the subject building from Steve Tumminia, on
December 31, 1986, and that Steve Tumminia purchased the subject building
from the subject tenant on or about February 20, 1985. The affidavit also
stated that the subject apartment was owner-occupied prior to February 20,
1985.
To the affidavit the subject owner attached, among other things, a copy of
the deed, entered into on December 17, 1984, between Steve Tumminia and the
subject tenant, that indicated that the subject tenant sold the subject
building to Steve Tumminia for $125,000.00. Also attached to the affidavit
was a copy of a five-year lease for the subject apartment entered into
between the subject tenant and Steve Tumminia, commencing on March 1, 1985
and expiring on February 28, 1990, at a monthly rent of $300.00.
On December 4, 1990, the Division of Housing and Community Renewal (DHCR)
mailed to the parties in this proceeding a "Notice of Commencement of
Administrative Proceeding," that stated that the Administrator was proposing
to determine that the subject apartment was not subject to the Rent and
Eviction Regulations, as the rent agency's records noted that the subject
apartment was previously owner-occupied, pursuant to Section 2200.2(f)(11)
of the Rent and Eviction Regulations. The notice also stated that the
DOCKET NO.: GB 220001-RT
parties to the proceeding had twenty days from the above-mentioned date to
submit evidence to substantiate their respective claims.
The tenant's response, dated December 12, 1990, asserted, among other
things, that he has continuously resided in the subject apartment since
1946; that he purchased the subject building in October, 1982 while
continuing to live in the subject apartment, and that two years later he
sold the subject building to Steve Tumminia.
To his response the tenant attached a "Memorandum of Law" that asserted that
the subject apartment was rent controlled until the time that the subject
tenant purchased the building; that the subject tenant applied for and was
eligible for maximum base rent (MBR) increases for 1983 and 1984; that he
sold the building in December, 1984; that the subject tenant has continued
to reside in the subject building since selling the subject building; that
there must be a vacancy in the apartment in order for owner-occupancy
decontrol to apply; that the New York Court of Appeals has stated that the
purpose of owner-occupancy decontrol "was to assist owners of owner-occupied
apartments which became vacant after April 1, 1953 and, in addition, 'such
exemption was not to affect any tenant in possession' at the time that the
amendment went into effect"; that as the subject tenant was a tenant "at the
time that the law went into effect," then the owner-occupancy decontrol law
should not apply in this case; that only an owner-occupant can decontrol an
apartment, and not a later owner "when that owner did not himself occupy the
premises," and that the subject tenant did not lose his rent control status
by signing the aforementioned lease.
On January 28, 1991 the subject owner submitted his "Memorandum of Law,"
that asserted, among other things, that the tenant by occupying his
apartment as an owner automatically decontrolled his apartment; that there
is no requirement that a notice of decontrol be filed; that the tenant's
rent control status ended when he became an owner-occupant, and that the
court case that the subject tenant cited "described owners of fractional
interests, involuntary interests, and other unusual situations," and
therefore are not on point. The owner further asserts that:
Tenant was an owner in possession at the time of the
sale. He was not a protected Tenant and was not a
member of the class intended to be protected, which
includes involuntary and fractional owners, or
shareholders in corporate owners. Tenant was none of
the above. He was an owner and his tenancy and right to
possession merged in his ownership of the fee. He
cannot now have a resurrection of that status.
On June 6, 1991 the subject tenant filed a reply to the owner's "Memorandum
of Law," that alleged, among other things, that in order for owner-occupancy
decontrol to occur "there must be first, a vacating of the housing
accommodations, and secondly, a rerenting," and that the subject premises
continued to be treated as rent controlled, as the 1983, 1984 and 1985 MBR
increases went into effect while the subject tenant owned the subject
building.
In the order under review herein, the Administrator determined that the
subject apartment was not subject to the Rent and Eviction Regulations,
pursuant to Section 2200.2(f)(11) of the above-mentioned regulations, due to
owner-occupancy decontrol.
DOCKET NO.: GB 220001-RT
The subject tenant's petition reiterates the facts that were set forth in
the proceeding before the Administrator. The petition also asserts that the
subject tenant is elderly and is dependent on social security; that the
subject tenant cites various Court cases that allegedly hold that in order
to establish owner-occupancy decontrol there must be "in addition to owner
occupancy, a vacating of the space by the former owner occupant and a
rerenting" (See, Sanchez V. Yulke, 164 N.Y.S.2d 567); that the legislative
history of the owner-occupancy decontrol regulation provides that an actual
vacating would have to take place before the apartment would be
decontrolled; that "A later owner cannot invoke the privileges of owner-
occupancy when the owner did not himself occupy the premises," and that the
fact that the subject tenant signed a lease did not relinquish his status as
a rent controlled tenant, as any agreement by the tenant to waive the
benefit of any provisions of the rent law or regulations is void, pursuant
to Section 2200.15 of the Rent and Eviction Regulation.
On March 30, 1992, the subject owner submitted his answer to the petition,
which asserts that the subject building consists of a "five-family dwelling
with a store"; that, based upon the representation of Steve Tumminia (the
prior owner) and the fact that the subject tenant had been the owner of the
subject building for several years, the subject owner believed that when he
purchased the subject building that the subject apartment was decontrolled;
that the tenant's petition should be dismissed for untimeliness, as the
Administrator's order was issued on December 27, 1991, and that the tenant's
petition received by the subject owner bears a receipt stamp from DHCR for
February 3, 1992, and that the issues raised in the tenant's petition "are
beyond the scope of review as fixed by Regulation 2529.6 of this Agency."
To his answer the owner attaches, among other things, a copy of a
"Certificate of Occupancy Search," that notes that the subject building
contains five apartments, and a store, and a copy of the aforementioned deed
between the subject tenant and Steve Tumminia and a rider to the deed which
states: "Sellers represent that premises described herein are a legal five
family dwelling house...."
The owner also submits a "Memorandum of Law," that asserts, among other
things, that the subject apartment was decontrolled automatically "when the
tenant herein owner-occupied the apartment for the statutory period"; that
when the subject tenant sold the subject building to Steve Tumminia and
"executed a non-rent controlled form of lease... tenant became a free-market
tenant"; that Steven Tumminia and the subject owner relied upon the above-
mentioned lease in believing that the subject apartment was decontrolled;
that the owner states that "To permit the tenant who was an owner to claim
the benefits of the rent control law where his own action misrepresented his
status would be an abuse of the authority of this Agency," and that the
tenant's filing of maximum base rents "was of no consequence, but merely a
prudent self serving act by an owner in the event the apartment by statute
would again come under control or to increase the rent roll in the event of
sale or was merely an error."
DOCKET NO.: GB 220001-RT
After careful consider, the Commissioner is of the opinion that the tenant's
petition should be denied.
The Commissioner notes that the envelope in which the tenant's petition was
mailed in has a U.S. Postal Service postmark of January 31, 1992, which is
less than thirty-five days after the issuance date of the order under review
herein. Accordingly, the Commissioner finds that the tenant's petition was
filed timely.
The subject owner's assertion that the issues raised in the tenant's
petition are beyond the scope of the Commissioner's review is without merit,
as the Commissioner finds that the issues raised in the tenant's petition
were raised in the proceeding before the Administrator.
The Commissioner further notes that it is a long established policy followed
by the rent agency and the predecessor agency of the Division of Housing and
Community Renewal in administrating the various statutes providing for the
regulation of housing that, as in this proceeding, when an owner-occupant
sells their title in the building, while still continuing to occupy their
apartment, it is the functional equivalent of their vacating that apartment.
As it is undisputed by both parties to this proceeding that the subject
tenant was the owner of the subject building for two years, and that the
subject tenant sold his title in the subject building, the Commissioner
finds that the subject apartment has been decontrolled.
The Commissioner is of the opinion that the Court cases cited by the subject
tenant pertaining to owner-occupancy decontrol involved individuals who
while maintaining the status of owner were only fractional or part owners,
and who elected to remain in possession in their apartment as rent paying
tenants.
In this proceeding the record reflects that during the time that the subject
tenant was the owner of the subject building, the subject tenant and his
wife (who resided with the subject tenant) were the sole owners of the
building; that there were no exchanges of apartments between the subject
tenant and other tenants in the subject building; that there was no non-
resident owner in which the subject tenant could have paid rent to during
the subject tenant's ownership in the building; that the subject tenant's
ownership in the subject building was voluntary and did not derive from an
inheritance, and that the subject tenant voluntarily sold his title in the
subject building and entered into a five-year non-rent control lease with
the purchaser of the subject building.
Accordingly, the Commissioner is of the opinion that the facts in the Court
cases cited by the subject tenant are not consist with the above-mentioned
facts in this proceeding, and therefore those cases are not applicable to
this proceeding.
The Commissioner finds that the filing of a decontrol report is not a
condition precedent to the decontrol of the subject apartment, and the fact
that there has not been a decontrol report filed is a mere procedural defect
which does not prevent the subject apartment from being decontrolled.
DOCKET NO.: GB 220001-RT
The Commissioner further finds that the subject apartment automatically
became decontrolled when the subject tenant sold his title in the building,
as that was the functional equivalent of vacating the subject apartment.
The Commissioner is of the opinion that the age or income of the subject
tenant does not prevent the subject apartment from becoming decontrolled
where, as in this proceeding, the subject tenant occupied the subject
apartment as an owner for the prerequisite time period, pursuant to the Rent
and Eviction Regulations, and then sold the title in the building.
The Commissioner is also of the opinion that the subject tenant's assertion
that "a later owner cannot invoke the privileges of owner-occupancy when
that owner did not himself occupy the premises," is not the rent agency's
policy nor is it case law.
Accordingly, the Commissioner finds that the tenant's petition should be
denied.
The record reflects that the subject building contains fewer than six units.
Accordingly, the Commissioner finds that the subject apartment is not
subject to rent regulations pursuant to Section 2520.11(d) of the Rent
Stabilization Code, and that the rent agency does not have jurisdiction to
determine the rent of the subject apartment.
Accordingly, the Commissioner finds that the issue of the aforementioned
five-year lease is moot.
THEREFORE, in accordance with the provisions of the Rent and Eviction
Regulations for New York City, it is
ORDERED, that this petition be, and the same hereby is, denied, and that the
Administrator's order be, and the same hereby is affirmed.
ISSUED:
JOSEPH D'AGOSTA
Acting Deputy Commissioner
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