Preview
FILED: QUEENS COUNTY CLERK 03/18/2024 01:44 PM INDEX NO. 705839/2024
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/18/2024
"C"
EXHIBIT
FILED: QUEENS COUNTY CLERK 03/18/2024 01:44 PM INDEX NO. 705839/2024
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/18/2024
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
;EN THE MATTER OF ADMINISTRATIVE ADMINISTRATIVE REVIEW
APPEAL OF: DOCKET NO: GM110012RO
Fazlur Khan
RENT ADMINISTRATOR'S
DOCKET NO: EO110024AD
PETITIONER
____________________-_________Ç
ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW
The above-named Petitioner-owner. filed a Petition for
tiinely
Administrative Review (PAR) of an Order issued by the Rent Administrator
(RA) on November 2, 2017 ,. concerning the housing accommodations known
as 31-36 ·32nd ·Basement NY
Street, Apartment, Astoria, 11106. Said PAR
was rejected for procedural reasons by PAR Order FX110003RO, issued on
December 11, 2017, and said PAR Order gave the owner 35 days in which
to. timely and properly refile the PAR. The owner timely refiled the
PAR and the instant Order is the determination of said refiled PAR.
The RA's Order that is the subject of this PAR found that the subj"ect
apartment is subject to rent stabilization and established the legal
rent for such apartment at $400.00 per month.
On PAR the owner alleges that the -RA's Order must be reversed
because it is contrary to fiñal Agency Order AV110069R, issued on
2/27/15, which Order determined that Fredrick Nickell was an employee
of the owner and was not a rent stabilized tenant, and because it is
also contrary to Khan v. Nickell, Index No. 54295/16 (NYC Civil Court,
12/22/16) which found that there was no landlord-tenant relationship
between former superintendent Mr. Nickell and the owner; that neither
of these Orders were appealed by Mr. .Nickell, and both are therefore
final Orders that were issued prior to issuance of the RA's
determination at issue herein; that the owner's application initiating
this procee ing was a request for a determination of the legal rent of
the apartment, and not for a determination of Mr. Nickell's status,
which .status has been determined by this Agency and by the Courts, as
outlined above; that these determinations found that Mr. Nickell was an
FILED: QUEENS COUNTY CLERK 03/18/2024 01:44 PM INDEX NO. 705839/2024
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/18/2024
Administrative R.eview Docket No, GM110012RO
employee rather than a tenant, and that his right to the
occupy
apartment expired when he ended his employment in August of 2015.
The owner further alleges that no rent was collected from Mr.
Nickel.1 after his employment was terminated on August 31, 2015; that a
redetermination of the issue of Mr. Nickell's status is barred by res
judicata and by collateral estoppel, as this exact issue has been fully
litigated, between the exact same parties , and determined by both this
and by the Courts, as explained above- (citation that
Agency omitted);
res. judicath and collateral estoppel apply even if the original
determinations were incorrect (citations omitted); that, as Mr. Nickell
was an eniployee of the owner, the apartment was temporarily exempt
during his occupancy; that, because the apartment was temporarily exempt
for four or more years pursuant to Mr. Nickell's occupancy while
employed by the owner, the rent. should have been determined by using
the average rent of apartments with the same number of rooms in the
subject premises (citing Fact Sheet #5 (FS5)); and that the setting of
the rent at $400.00 per month was therefore erroneous and is also
grounds for reversing the RA's Order.
The tenant responded to the PAR alleging that the petitioner
lacks·standing to pursue the instant PAR, because the building has been
sold.to a subsequent owner; that the PAR is not necessary because the
current owner has admitted that Mr. Nickell is the tenant of the
apartment by billing him $400.00 for rent in February of 2018; that Mr.
Nickell worked as superintendent from 1982 until 2015 , and paid rent of
$250.00 per month which rent increased to .$400.00 per month, as proven
by copies of rent receipts from 2007 and from 2009--2011; that the
apartment was not, therefore, temporarily exempt from rent
stabilization; that Mr. Nickell filed an overcharge complaint on October
25, 2012, which complaint was. terminated by an order that was based on
a finding that, at that time, Mr. Nickell was an employee of the then
owner; that said Order stated that the apartment was temporarily exempt
from rent stabilization while he remained an employee of the owner;
that, contrary to the owner's assertion, said Order did hot find that
Mr. Nickell was not a rent stabilized tenant, finding only that there
is no owner-tenant relationship "as long as he [Mr. Nickell] remains an
employee of the owner while occupying the subject prernises"; and that ,
upon termination of Mr. Nickell's employment, his tenancy reverted to
a rent stabilized landlord-tenant relationship.
The tenant further alleges that the prior owner commenced the
above-referenced Housing Court proceeding by Petition and Verified
2
FILED: QUEENS COUNTY CLERK 03/18/2024 01:44 PM INDEX NO. 705839/2024
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/18/2024
Administrative Review Docket No. GM110012RO
Petition stating that Mr. Nickell is the rent stabilized tenant of the
apartment; that said proceeding was properly dismissed, although the
judge included non-binding dicta in his opinion statinc5 that Mr. Nickell
did.not sign a lease, did noti pay rent , and that there was no landlord-
tenant relationship or agreement. to pay rent; that, contrary to the
owner's contention, Mr. Nickell did in fact appeal the Housing Court
dismissal, which resulted in a new Order from the Court, which Order
affirmed the result but modified the dicta to state that there was no
landlord-tenant relationship while Mr. Nickell was superintendent, but
that when such employment terminated on August 31, 2015 the owner was
thereafter obligated to a holdov.er rather than a non-
bring proceeding
payment proceeding; that, although the Court did not finally rule on
Mr. Nickell's status, case law clearly holds that, upon termination of
a tenant's employment, the .relationship reverts back to a normal
landlord-tenant and the· formerly··employed occupant is
relationship,
deemed a rent st.abilized tenant. (citations omitted); that the RA's Order
at issue held that the legal rent is $400.00 per month because ehe owner
collected this rent from Mr.. Nickell, so FS5 does not apply and the
legal rent was properly based on the rent accepted by the owner; and
that previous owners have admitted that the legal rent for the apartment
is $400.00 per month through acceptance and retention of rental payments
in this amount.
The new owner, the owner who purchased the premises subsequent
to the filing of the original PAR herein by the prior and original
petitioner-owner Fazlur Khan, submitted a supplement .to the PAR,.
allegations made the original PAR and· further
repeating by alleging
that this action. was brought pursuant to RSC Sec.tion 2522.6 which
provides for a determination of the rent but does not provide for a
determination of the status of an occupant of an apartment; that the RA
therefore did not have authority to determine that the occupant was the
rent stabilized tenant of the basement apartment; that the RA's
determination of, the .legal rent of the apartment was also incorrect as
he did not use any of the methods provided by RSC Section 2522.6 for
making such a determination, rather setting the legal rent by using the
reduced amount of use and occupancy that the occupant was paying for
the apartment.while he was the superintendent of the building; and that
Mr. Nickell lived in the apartment incident. to his employment ·as
superintendent, and paid no rent for 20 years, after which he was
charged a nominal rent of $250.00 per month for his occupancy of the
apartment while still continuing his duties as superintendent, which
rent eventually increased to $400.00 per month.
3
FILED: QUEENS COUNTY CLERK 03/18/2024 01:44 PM INDEX NO. 705839/2024
NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/18/2024
Administrative Review Docket No. GM110012RO
The owner further alleges that Mr. Nickell filed an overcharge
complaint in October of 2012, which was dismissed in February of 2015
because it was found that there was no tenant-owner relationship; that
said dismissal was Iot appealed and was therefore a final Order; that
the occupant's employment was terminated in August ·of 2015, and the
owner at that time therefore offered Mr. Nickell a lease at a rate of
$1,260.00.pe month, which lease he did not sign; that Mr. Nickell also
stopped paying rent at that time; that the former owner therefore began
a non-payment proceeding against the occupant, and also commenced the
instant Administrative Determination proceeding to determine Mr.
Nickell's legal rent; that the Court hearing the
non-payment.proceeding
granted Mr. Nickell's motion to dismiss, finding that, as there was no
landlord-tenant relationship between him and the prior owner, said owner
could not bring a non-payment proceeding but could only bring a holdover
proceeding; that said Court specifically found that Mr. Nickell "failed
the .sent to him and did not rent,"
to sign lease that was pay any and
there was therefore "no agreement to pay rent"; that the tenant appealed
the Court's finding, which resulted in an amended Order; that said
amended Order .retained t-he language that "there was no landlord-
stating
tenant between the parties· while [Mr. was
relationship Nickell]
superintendent"; and that Mr. Nickell's argument that the instant PAR
should be dismissed because the prior owner.who initiated the PAR is no
longer owner is not persuasive , as the. current owner has the right to
pursue this PAR (citations omitted).
The owner also alleges that Mr. Nickell's argument that the prior
owner acknowledged that he is the rent stabilized tenant of the
apartment is unpersuasive, because, even though the prior owner
commenced a non-payment proceeding premised on the occupant's tenancy,
such premise was rejected by the Court hearing such proceeding, as
explained that, once- Mr. Nickell was terminated as
above;
superintendent, he did not become a tenant, as he insists, buti, rather,
he became a licensee, .as recognized by the above referenced Court and
as explained above; that said license is revocable by the o•ner
(citation omitted) ; that, contrary to Mr. Nickell's assertion, the owner
did not agree to rent the apartment to him for $400.00 per month; that,
although the agent for the new owner did send Mr. Nickell a. rent bill
for $400.00 in. of a few days after said owner took
February 2018,
possession of the subject building, such bill was clerical error caused
by the changeover in ownership; that erroneously sending out a single
rent bill is excusable under these circumstances, and is insufficient
to create a tenancy (citations omitted) ; that the RA should have used
4
FILED: QUEENS COUNTY CLERK 03/18/2024 01:44 PM INDEX NO. 705839/2024
NYSCEF DOC. NO.
h 5 RECEIVED NYSCEF: 03/18/2024
Administrative Review Docket No. GM110012RO
RSC Section 2522.6(iv) to set the rent in this case (citation omitted);
that it was and capricious· for the RA to have set the rent
arbitrary at
the reduced amount paid by Mr. Nickell at the time he was employed as
superintendent of the building; and that the matter must accordingly be
remanded for a proper determination of the legal rent using the correct
methodology for such determination.
The tenant made a further submission alleging that, contrary to
the owner's assertions, the RA has authority to determine Mr. Nickell's
status , and to determine his legal rent; that the new owner incorrectly
claims that the Agency's 11/2/17 Order (the RA's Order a.t issue herein).
is inconsistent with the Agency's 2/27/15 Order and with the Amended
Order issued by the
Preview
FILED: QUEENS COUNTY CLERK 03/18/2024 01:44 PM INDEX NO. 705839/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/18/2024 "C" EXHIBIT FILED: QUEENS COUNTY CLERK 03/18/2024 01:44 PM INDEX NO. 705839/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/18/2024 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 ;EN THE MATTER OF ADMINISTRATIVE ADMINISTRATIVE REVIEW APPEAL OF: DOCKET NO: GM110012RO Fazlur Khan RENT ADMINISTRATOR'S DOCKET NO: EO110024AD PETITIONER ____________________-_________Ç ORDER AND OPINION DENYING PETITION FOR ADMINISTRATIVE REVIEW The above-named Petitioner-owner. filed a Petition for tiinely Administrative Review (PAR) of an Order issued by the Rent Administrator (RA) on November 2, 2017 ,. concerning the housing accommodations known as 31-36 ·32nd ·Basement NY Street, Apartment, Astoria, 11106. Said PAR was rejected for procedural reasons by PAR Order FX110003RO, issued on December 11, 2017, and said PAR Order gave the owner 35 days in which to. timely and properly refile the PAR. The owner timely refiled the PAR and the instant Order is the determination of said refiled PAR. The RA's Order that is the subject of this PAR found that the subj"ect apartment is subject to rent stabilization and established the legal rent for such apartment at $400.00 per month. On PAR the owner alleges that the -RA's Order must be reversed because it is contrary to fiñal Agency Order AV110069R, issued on 2/27/15, which Order determined that Fredrick Nickell was an employee of the owner and was not a rent stabilized tenant, and because it is also contrary to Khan v. Nickell, Index No. 54295/16 (NYC Civil Court, 12/22/16) which found that there was no landlord-tenant relationship between former superintendent Mr. Nickell and the owner; that neither of these Orders were appealed by Mr. .Nickell, and both are therefore final Orders that were issued prior to issuance of the RA's determination at issue herein; that the owner's application initiating this procee ing was a request for a determination of the legal rent of the apartment, and not for a determination of Mr. Nickell's status, which .status has been determined by this Agency and by the Courts, as outlined above; that these determinations found that Mr. Nickell was an FILED: QUEENS COUNTY CLERK 03/18/2024 01:44 PM INDEX NO. 705839/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/18/2024 Administrative R.eview Docket No, GM110012RO employee rather than a tenant, and that his right to the occupy apartment expired when he ended his employment in August of 2015. The owner further alleges that no rent was collected from Mr. Nickel.1 after his employment was terminated on August 31, 2015; that a redetermination of the issue of Mr. Nickell's status is barred by res judicata and by collateral estoppel, as this exact issue has been fully litigated, between the exact same parties , and determined by both this and by the Courts, as explained above- (citation that Agency omitted); res. judicath and collateral estoppel apply even if the original determinations were incorrect (citations omitted); that, as Mr. Nickell was an eniployee of the owner, the apartment was temporarily exempt during his occupancy; that, because the apartment was temporarily exempt for four or more years pursuant to Mr. Nickell's occupancy while employed by the owner, the rent. should have been determined by using the average rent of apartments with the same number of rooms in the subject premises (citing Fact Sheet #5 (FS5)); and that the setting of the rent at $400.00 per month was therefore erroneous and is also grounds for reversing the RA's Order. The tenant responded to the PAR alleging that the petitioner lacks·standing to pursue the instant PAR, because the building has been sold.to a subsequent owner; that the PAR is not necessary because the current owner has admitted that Mr. Nickell is the tenant of the apartment by billing him $400.00 for rent in February of 2018; that Mr. Nickell worked as superintendent from 1982 until 2015 , and paid rent of $250.00 per month which rent increased to .$400.00 per month, as proven by copies of rent receipts from 2007 and from 2009--2011; that the apartment was not, therefore, temporarily exempt from rent stabilization; that Mr. Nickell filed an overcharge complaint on October 25, 2012, which complaint was. terminated by an order that was based on a finding that, at that time, Mr. Nickell was an employee of the then owner; that said Order stated that the apartment was temporarily exempt from rent stabilization while he remained an employee of the owner; that, contrary to the owner's assertion, said Order did hot find that Mr. Nickell was not a rent stabilized tenant, finding only that there is no owner-tenant relationship "as long as he [Mr. Nickell] remains an employee of the owner while occupying the subject prernises"; and that , upon termination of Mr. Nickell's employment, his tenancy reverted to a rent stabilized landlord-tenant relationship. The tenant further alleges that the prior owner commenced the above-referenced Housing Court proceeding by Petition and Verified 2 FILED: QUEENS COUNTY CLERK 03/18/2024 01:44 PM INDEX NO. 705839/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/18/2024 Administrative Review Docket No. GM110012RO Petition stating that Mr. Nickell is the rent stabilized tenant of the apartment; that said proceeding was properly dismissed, although the judge included non-binding dicta in his opinion statinc5 that Mr. Nickell did.not sign a lease, did noti pay rent , and that there was no landlord- tenant relationship or agreement. to pay rent; that, contrary to the owner's contention, Mr. Nickell did in fact appeal the Housing Court dismissal, which resulted in a new Order from the Court, which Order affirmed the result but modified the dicta to state that there was no landlord-tenant relationship while Mr. Nickell was superintendent, but that when such employment terminated on August 31, 2015 the owner was thereafter obligated to a holdov.er rather than a non- bring proceeding payment proceeding; that, although the Court did not finally rule on Mr. Nickell's status, case law clearly holds that, upon termination of a tenant's employment, the .relationship reverts back to a normal landlord-tenant and the· formerly··employed occupant is relationship, deemed a rent st.abilized tenant. (citations omitted); that the RA's Order at issue held that the legal rent is $400.00 per month because ehe owner collected this rent from Mr.. Nickell, so FS5 does not apply and the legal rent was properly based on the rent accepted by the owner; and that previous owners have admitted that the legal rent for the apartment is $400.00 per month through acceptance and retention of rental payments in this amount. The new owner, the owner who purchased the premises subsequent to the filing of the original PAR herein by the prior and original petitioner-owner Fazlur Khan, submitted a supplement .to the PAR,. allegations made the original PAR and· further repeating by alleging that this action. was brought pursuant to RSC Sec.tion 2522.6 which provides for a determination of the rent but does not provide for a determination of the status of an occupant of an apartment; that the RA therefore did not have authority to determine that the occupant was the rent stabilized tenant of the basement apartment; that the RA's determination of, the .legal rent of the apartment was also incorrect as he did not use any of the methods provided by RSC Section 2522.6 for making such a determination, rather setting the legal rent by using the reduced amount of use and occupancy that the occupant was paying for the apartment.while he was the superintendent of the building; and that Mr. Nickell lived in the apartment incident. to his employment ·as superintendent, and paid no rent for 20 years, after which he was charged a nominal rent of $250.00 per month for his occupancy of the apartment while still continuing his duties as superintendent, which rent eventually increased to $400.00 per month. 3 FILED: QUEENS COUNTY CLERK 03/18/2024 01:44 PM INDEX NO. 705839/2024 NYSCEF DOC. NO. 5 RECEIVED NYSCEF: 03/18/2024 Administrative Review Docket No. GM110012RO The owner further alleges that Mr. Nickell filed an overcharge complaint in October of 2012, which was dismissed in February of 2015 because it was found that there was no tenant-owner relationship; that said dismissal was Iot appealed and was therefore a final Order; that the occupant's employment was terminated in August ·of 2015, and the owner at that time therefore offered Mr. Nickell a lease at a rate of $1,260.00.pe month, which lease he did not sign; that Mr. Nickell also stopped paying rent at that time; that the former owner therefore began a non-payment proceeding against the occupant, and also commenced the instant Administrative Determination proceeding to determine Mr. Nickell's legal rent; that the Court hearing the non-payment.proceeding granted Mr. Nickell's motion to dismiss, finding that, as there was no landlord-tenant relationship between him and the prior owner, said owner could not bring a non-payment proceeding but could only bring a holdover proceeding; that said Court specifically found that Mr. Nickell "failed the .sent to him and did not rent," to sign lease that was pay any and there was therefore "no agreement to pay rent"; that the tenant appealed the Court's finding, which resulted in an amended Order; that said amended Order .retained t-he language that "there was no landlord- stating tenant between the parties· while [Mr. was relationship Nickell] superintendent"; and that Mr. Nickell's argument that the instant PAR should be dismissed because the prior owner.who initiated the PAR is no longer owner is not persuasive , as the. current owner has the right to pursue this PAR (citations omitted). The owner also alleges that Mr. Nickell's argument that the prior owner acknowledged that he is the rent stabilized tenant of the apartment is unpersuasive, because, even though the prior owner commenced a non-payment proceeding premised on the occupant's tenancy, such premise was rejected by the Court hearing such proceeding, as explained that, once- Mr. Nickell was terminated as above; superintendent, he did not become a tenant, as he insists, buti, rather, he became a licensee, .as recognized by the above referenced Court and as explained above; that said license is revocable by the o•ner (citation omitted) ; that, contrary to Mr. Nickell's assertion, the owner did not agree to rent the apartment to him for $400.00 per month; that, although the agent for the new owner did send Mr. Nickell a. rent bill for $400.00 in. of a few days after said owner took February 2018, possession of the subject building, such bill was clerical error caused by the changeover in ownership; that erroneously sending out a single rent bill is excusable under these circumstances, and is insufficient to create a tenancy (citations omitted) ; that the RA should have used 4 FILED: QUEENS COUNTY CLERK 03/18/2024 01:44 PM INDEX NO. 705839/2024 NYSCEF DOC. NO. h 5 RECEIVED NYSCEF: 03/18/2024 Administrative Review Docket No. GM110012RO RSC Section 2522.6(iv) to set the rent in this case (citation omitted); that it was and capricious· for the RA to have set the rent arbitrary at the reduced amount paid by Mr. Nickell at the time he was employed as superintendent of the building; and that the matter must accordingly be remanded for a proper determination of the legal rent using the correct methodology for such determination. The tenant made a further submission alleging that, contrary to the owner's assertions, the RA has authority to determine Mr. Nickell's status , and to determine his legal rent; that the new owner incorrectly claims that the Agency's 11/2/17 Order (the RA's Order a.t issue herein). is inconsistent with the Agency's 2/27/15 Order and with the Amended Order issued by the