Merwest Realty Corp. v. Prager

173 Misc. 2d 868, 662 N.Y.S.2d 405, 1997 N.Y. Misc. LEXIS 393
CourtCivil Court of the City of New York
DecidedAugust 15, 1997
StatusPublished
Cited by2 cases

This text of 173 Misc. 2d 868 (Merwest Realty Corp. v. Prager) is published on Counsel Stack Legal Research, covering Civil Court of the City of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Merwest Realty Corp. v. Prager, 173 Misc. 2d 868, 662 N.Y.S.2d 405, 1997 N.Y. Misc. LEXIS 393 (N.Y. Super. Ct. 1997).

Opinion

OPINION OF THE COURT

Marcy Friedman, J.

This is a summary holdover proceeding brought on the ground that respondent entered into an agreement to surrender her apartment. It is undisputed that respondent signed an agreement, dated January 14, 1997, in which she agreed to terminate her tenancy and vacate the apartment. It is further undisputed that at the time of execution of the agreement, respondent’s apartment was subject to the Rent Control Law. Petitioner contends that the apartment was decontrolled by virtue of the agreement to vacate, and that this proceeding [869]*869may be brought to enforce the agreement.1 Respondent moves to dismiss the proceeding, claiming that the agreement is void as a matter of law, ineffective to decontrol the apartment, and not a basis on which an eviction proceeding may be maintained.

The New York City Rent and Rehabilitation Law (Administrative Code of City of NY, tit 26, ch 3), commonly known as the Rent Control Law, was enacted in 1962 and subsequently renewed based on the legislative finding that the regulation of residential rents and evictions is necessary, in light of an acute shortage of housing, "to prevent exactions of unjust, unreasonable and oppressive rents and rental agreements and to forestall profiteering, speculation and other disruptive practices tending to produce threats to the public health”. (Administrative Code § 26-401 [a]; Local Emergency Housing Rent Control Act § 2 [L 1962, ch 21, § 1, as amended].)

The Rent Control Law expressly precludes eviction proceedings based on out-of-court agreements to surrender. Like other forms of rent regulation, the Rent Control Law operates to prevent unwarranted evictions by two approaches used in tandem: restriction of the rents which may be charged for regulated premises; and limitation of the grounds for eviction.

The Rent Control Law permits eviction in court proceedings or in proceedings before the administrative agency which administers the law, only on the grounds enumerated in the statute. Administrative Code § 26-408 (a) provides that no tenant shall be evicted from a rent-controlled apartment "notwithstanding any contract, lease agreement, or obligation heretofore or hereafter entered into which provides for surrender of possession,” "except on one or more of the following grounds”.2 The grounds set forth for eviction in a court proceeding are: [870]*870violation of a substantial obligation of tenancy; commission of a nuisance; occupancy of the premises which violates requirements of law and subjects the landlord to civil or criminal penalties; use of the premises for an immoral or illegal purpose; refusal upon demand to execute a renewal of a written lease; unreasonable refusal of access to the landlord for the purpose of making repairs or for purposes of inspection; and expiration of rights of occupancy of a rent-controlled nonpurchasing tenant in a building converted to cooperative ownership, where the owner seeks the apartment for personal use and occupancy. (Administrative Code § 26-408 [a] [l]-[7].)3 Not only do these grounds for eviction not include an agreement to surrender, but the statute specifically prohibits use of an agreement to surrender as a ground for eviction.

Petitioner seeks to avoid this clear prohibition by arguing that the agreement to surrender had the effect of decontrolling the tenancy and that the Rent Control Law is therefore inapplicable. This argument is unavailing. Any agreement to waive the benefits of the Rent Control Law is expressly prohibited by the implementing regulations, which provide: "An agreement by the tenant to waive the benefit of any provision of the Rent Law or these regulations is void.” (New York City Rent and Eviction Regulations [9 NYCRR] § 2200.15.)

As a general matter, an agreement to deregulate a premises is precisely the type of agreement which violates the prohibition against agreements to waive the benefits of the rent laws. (Matter of Lieberman v City of N. Y. Dept. of Hous. Preservation & Dev., 125 Misc 2d 1017 [Sup Ct, Queens County 1984]; see also, Draper v Georgia Props., 230 AD2d 455 [agreement to deregulate stabilized unit held void under analogous provision of Rent Stabilization Code].)

Out-of-court agreements to surrender rent-controlled premises have, in particular, been held to violate the no-waiver [871]*871prohibition of the Rent Control Law. While there does not appear to be recent authority concerning the enforceability of out-of-court surrender agreements, an older line of cases consistently held such agreements unenforceable under the no-waiver provision. In the lead case, Morris v Flint & Bradley (99 NYS2d 126, 127 [Sup Ct, NY County 1950], affd 277 App Div 1025), the court reasoned that an out-of-court agreement to surrender a residential rent-controlled premises was a "waiver agreement”, and was unenforceable even where it was made for consideration and it was the tenant who sought its enforcement. Courts following Morris have repeatedly refused to enforce such agreements, whether at the instance of the landlord or of the tenant. (E.g., Markakis v Hubig, 68 Misc 2d 196 [App Term, 2d Dept 1970]; Matter of Colin v Weaver, 15 Misc 2d 542 [Sup Ct, NY County 1958]; Dixon v 410 Park Ave. Corp., 11 Misc 2d 767 [Sup Ct, NY County 1958].)

Interestingly, at the time the decision in Morris (supra) was rendered, the Rent Control Law (then a State statute) did not contain an express prohibition against eviction proceedings based on agreements to surrender. Morris was decided solely on the basis of the no-waiver prohibition of the statute. In 1951, the statute was amended to add the "notwithstanding clause” that prohibits eviction proceedings other than on statutorily enumerated grounds, "notwithstanding any contract, lease agreement or obligation heretofore or hereafter entered into which provides for surrender of possession.” (McKinney’s Uncons Laws of NY § 8585 [1] [Emergency Housing Rent Control Law § 5 (1); L 1946, ch 274, as amended by L 1951, ch 443, § 1].) With the addition of this clause, which has remained unchanged to date, the statute, consistent with Morris, prohibits eviction proceedings against rent-controlled tenants based on out-of-court agreements to surrender.

This statutory prohibition clearly bars this eviction proceeding based on the out-of-court agreement to surrender signed by respondent. The cases cited by petitioner, all of which concern the enforceability of in-court settlements, are not to the contrary. These cases hold that an agreement to surrender does not violate the prohibition against waiver of the benefits of the Rent Control Law provided that it is entered into in the context of a pending court proceeding, on the advice of counsel, and in order to settle a bona fide dispute as to whether, for example, the premises is in fact subject to rent control. (See, Matter of Matinzi v Joy, 60 NY2d 835 [1983]; Hill v Wek Capital Corp., 4 AD2d 615 [1st Dept 1957]; 437 Palisade Ave. Realty Corp. v [872]*872Boyd, 124 Misc 2d 759 [App Term, 2d Dept 1984]; see also, Matter of Ammon v New York State Div. of Hous. & Community Renewal, NYLJ, May 9, 1997, at 29, col 4 [Sup Ct, NY County].) In these cases, the issue is whether an in-court agreement to surrender is void as a matter of law under the no-waiver provision, and should therefore be set aside.

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Related

Merwest Realty Corp. v. Prager
264 A.D.2d 313 (Appellate Division of the Supreme Court of New York, 1999)
Merwest Realty Corp. v. Prager
177 Misc. 2d 956 (Appellate Terms of the Supreme Court of New York, 1998)

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Bluebook (online)
173 Misc. 2d 868, 662 N.Y.S.2d 405, 1997 N.Y. Misc. LEXIS 393, Counsel Stack Legal Research, https://law.counselstack.com/opinion/merwest-realty-corp-v-prager-nycivct-1997.