At trial the tenant testified that her father lived with her but no other adults, not a boyfriend (she said she is not married), not her mother, not her brothers, no one else. She testified that her mother sometimes helped her with the children but did not live there. The super lives on the same floor and testified that nine people live in the apartment including the tenant, three minor children, tenant's husband, her mother, her father and her two brothers. The super gave details about the alleged other residents, including that the brother is a landscaper and he sees the brother leave for work regularly. The super claimed he never told his employer, the landlord, about the overoccupancy because he was never asked and did not want to get the tenant in trouble. He testified in detail about the household composition, including where each family member slept based on his prior access to the apartment.

A building inspector testified that the Freeport Village Code, Section 128-20 was applicable. The inspector was not able to inspect the apartment but he was told of the number of rooms and testified that based on the configuration of the apartment and the law, this apartment can accommodate five persons living in it because it has 2 bedrooms and a living room. Adults and children are treated equally. The landlord sought access to determine the number of adults living in the premises, but the tenant did not grant access.

After hearing all the testimony the court concluded that the tenants had violated the Freeport Code against overcrowding. The court believed the testimony of the super as to the number of people living in the apartment. The court ruled that the statute against overcrowding is to protect the public from excessive water and garbage use and use of the local schools which costs the taxpayers unnecessarily. The court drew a negative inference that the two brothers did not testify despite tenant's claims that she intended to call her brothers to rebut the super's alleged false testimony that they reside in the apartment. The court awarded judgment in favor of landlord and against the tenant.

The Appellate Term remanded the case for a new trial. On remand the landlord then requested the trial judge dismiss the case based on a DHCR order issued five months after the Appellate Term's reversal. The DHCR order was a denial of the tenant's application for a rent reduction. The DHCR ruled that the tenants were not entitled to a reduction because they have a commercial lease (the same lease which was before the trial court and the Appellate Term). For some reason the trial court and the Appellate Term were not appraised that a DHCR proceeding was pending.

In this case there are two conflicting decisions, one from the DHCR and one from the Appellate Term. The landlord, of course, is now asking the judge to defer to the DHCR decision, not the Appellate Term decision. The tenants are appealing the DHCR order via an Article 78 where they will argue that they were deprived a full and fair hearing at the DHCR. The court refused to defer to the DHCR order which in legal terms is called collateral estoppel. The court ruled that "To give the DHCR order collateral estoppel effect would thwart the clear direction of the Appellate Term." The court opined that the landlord's remedy to stop the current trial is to move for a stay of the holdover proceeding in tenant's Article 78 proceeding in Supreme Court. There is, however, the possibility that the tenants will discontinue the Article 78 and proceed at trial since the trial judge is bound by the Appellate Term ruling.

In this case the court found that the landlord was aware of the tenant's living arrangement and had participated in the expansion of the tenant's residential space. The landlord treats the two units as separate since they are registered separately with the DHCR and two rent bills are sent. The units, however, are contiguous with a doorway between them separated by an archway. One can go from one unit through the doorway to another unit without exiting the apartments. Apartment 2Q no longer has a kitchen as it is used by the tenant as a work and storage area. The tenant paid for the creation of the internal doorway. Although she eats, cooks and sleeps mostly in 2P, she also uses 2Q as frequently for residential usage. Both apartments are billed under one ConEdison account. At trial the tenant went into detailed testimony as to the contents of each unit and the activities she engages in at each unit. Thus, the court found that by a preponderance of evidence the tenant demonstrated that she uses both units as a single primary residence.

The first question the judge addressed was whether the tenant's resurrection of the rent issue is timely. To reargue a decision, the losing party must do so within 30 days, unless there is newly discovered evidence. But in this case the evidence, the certificate of occupancy showing that the two family home is illegal, was available at the last trial date. Therefore tenant failed to show any procedural grounds why the prior decision should be overturned. But the court went on to query whether there are any public policy reasons to grant the request.

The certificate of occupancy clearly shows that the premises cannot be used as a two family home. If it were used as a three family home the landlord would not be able to collect rent because the multiple dwelling law forbids the collection of rent for three or more units if there is no certificate of occupancy reflecting three family usage. But this is not the case for two units since three or more units are needed to comprise a multiple dwelling. Nonetheless the court opined that the same logic should apply because the passage of the Multiple Dwelling Law was based on ensuring that tenants are living in safe housing. A certificate of occupancy is a means by which the safety of the premises is monitored by the government. The landlord should not have been permitted to collect a judgment for the rent based on using a one-family home for two-family purposes in violation of the certificate of occupancy.

The court however ruled that when an owner legalizes the premises, they should be entitled to collect the back rent. The mere fact that at one time the premises were illegal does not bar the landlord from collecting rent for the period before a lawful certificate of occupancy issues. The judge allowed the $1875 judgment to remain in effect but precluded the landlord from collecting it until the landlord legalized the premises. If the landlord cannot convert the premises into a legal two-family home, then the judge ruled that he would vacate the judgment.

The judge then went into a long inquiry and commentary involving the problem of illegal two and three family homes that were initially constructed as one family houses and the certificate of occupancy was never changed. Who is responsible for bearing the costs of legalization: the builder who constructed the premises with rooms readily convertible to illegal apartments, or the City which approved a code that allows a basement area to be built with a summer kitchen and bathroom and then is "surprised" when the owner converts it to a rental apartment? At this juncture the individual owners must undertake the legalization process.

The DHCR sent an inspector to the building whereupon it was determined that the building was not a part of a horizontal multiple dwelling and therefore tenant's apartment was not rent stabilized. The tenant filed a PAR which found in her favor on grounds that the landlord did not rebut the tenant's evidence that the building was part of a complex owned and operated as a horizontal multiple dwelling on the relevant date, May 6, 1969. Landlord then appealed via an Article 78 petition to the Supreme Court which resulted in the case going back to the DHCR for a full hearing.

At the hearing the tenant testified that six adjacent buildings were managed by the same company and shared the same boiler. A licensed architect testified for the landlord that the tenant's building is not part of a horizontal multiple dwelling because on the east side the building is separated by an alley and on the west side with separate sewer, gas, electric and water lines and with separate gas and water meters and that it does not tie in to any other building structurally or mechanically and does not share a foundation entrance or staircase with any other building. The building's backyard is fully enclosed with no openings to adjacent properties. There is no inside passageway from which a person could go from one building into another. There is no indication that there ever had been any connection between the buildings. The architect researched the building back to 1903 and found that, other than a shared heating system, there was no structural or mechanical commonality among the buildings.

The DHCR held for the landlord at the administrative level and the PAR level. The tenant appealed in an Article 78 and the Supreme Court judge ruled that the case should be remanded back to the DHCR because the agency considered evidence of the building's present condition and configuration (as opposed to when the tenant commenced occupancy). The court also ruled that the record was incomplete since there was no information on the rent regulatory status of the other buildings and the agency failed to clarify whether the owners of the buildings were separate entities.

The landlord appealed to the Appellate Division and won. The Appellate Division reversed on grounds that in determining a horizontal multiple dwelling case, the crucial factor is whether there are sufficient indicia of common facilities, common ownership, management, and operation to warrant treating the buildings as an integrated unit. Shared heating and common ownership alone are not insufficient to establish a horizontal multiple dwelling. Thus, the tenant will face eviction because she cannot show that her building (which has less than six units) is not connected to other buildings to raise the combined count above six apartments in order to obtain rent stabilization status.

On February 1, 1991 DHCR dismissed the tenant's complaint finding that since the complaint was filed after the expiration of the 90 day challenge period following service by the landlord to tenant of a Notice of Right to File a Fair Market Rent Appeal (known as a DC-2A form), the agency was limited to reviewing the rent increases made subsequent to the imposition of the initial $650 rent (i.e., the $172.44 rent would not be considered). With this limited review, no overcharges were found.

Tenant then filed a PAR in which he contended that he never received the DC-2A form until February 14, 1988 and repeated his earlier assertions that he had not received a copy of his lease until February, 1988. DHCR did not issue a decision on the PAR until ten years later (with no explanation) on January 15, 1999 at which time the Commissioner ruled that there was no proof of service of the DC-2A form on the tenant and therefore the 90-day period to challenge the rent had not begun to run (and therefore the agency could examine the rent prior to the initial rent, i.e., the $172.44). The Commissioner remanded the case to the Rent Administrator for further proceedings.

On February 10, 2000, the Rent Administrator issued an order which fixed the initial legal stabilized rent at $379.78 and ordered the (now new) landlord to roll back the rent and refund the tenant that portion of the excess rent that had been collected during its ownership. The landlord then filed its own PAR, arguing that the tenant's complaint was still untimely because the tenant himself conceded in his original complaint that he had been served with an RR-1 form in August, 1987 which advised him that he had 90 days from receipt of the form to file a Fair Market Rent Appeal. Tenant responded that he misunderstood the question on the overcharge form and that in answer "yes" to receiving an RR-1 Form in August, 1987, he actually thought the reference was to signing a lease. But the landlord pointed out that the tenant preciously claimed that he did not receive the lease until 1988 so the tenant's response was contradictory. (Actually tenant signed the lease in August, 1988 but didn't receive it until the following February, so he was not contradicting himself).

DHCR granted the landlord's PAR and found that the tenant's original complaint was untimely because he failed to file it within 90 days of his receipt of the RR-1 Form. The Commissioner found that the explanation offered by the tenant to negate his initial admission of receipt of the RR-1 Form in August, 1987 was not credible. Tenant then appealed to the Supreme Court in an Article 78 proceeding.

Tenant argued on appeal that it is the owner who bears the burden of establishing that the RR-1 Form was properly served upon the tenant by certified mail. Tenant argued that the DHCR impermissibly shifted the burden of proof to him by requiring that he provide an explanation for his admission of receipt of the RR-1 Form. In the absence of proof by the predecessor landlord of the receipt of mailing for a certified mailing of the RR-1 form, the DHCR should not have held for the landlord.

The Court held for the tenant pointing out that a landlord has a statutory duty to register premises which become subject to the rent stabilization law, as this one did when the prior rent controlled tenant vacated and this tenant became the first rent stabilized tenant. An owner is also obligated to serve the RR-1 form on the first rent stabilized tenant and the law explicitly requires that such mailing be done by certified mailing. Additionally, DHCR Policy Statement 92-3 required proof of service by certified mailing of the RR-1 for all mailings done after May 1, 1987. The court noted that these statutes and guidelines are unambiguous in requiring service by certified mailing, and that it is the owner's burden to prove such mailing. The court rejected the landlord's argument that tenant's initial admission of service constitutes sufficient proof of proper service. The court held that this position is completely opposite to the Appellate Division's ruling that service of the RR-1 must be by certified mailing and the only acceptable proof of this is the original return receipt form with the tenant's full signature or the date- stamped post office receipt.

Since the landlord failed to offer any proof of receipt of the certified mailing, the court remanded the matter to the DHCR to render a decision consistent with the law as the court recited it. The court noted that, the fact that the tenant contradicted himself when he believed he received a lease or a RR-1 form is not relevant to the issue of whether the owner submitted adequate proof that, as the statute requires, the tenant had been served by certified mail. "Indeed, [tenant's] apparent confusion underscores the importance of this requirement."

The landlord appealed the decision, but before perfecting the appeal the parties entered into a stipulation in 1989: the proceeding was discontinued with prejudice and the appeal withdrawn. The parties agreed to enter into a two-year rent stabilized lease form October 1988 to September, 1990, and the Province agreed to "provide Owner a list of the present occupants of each of the Subject Apartments." The Jesuits delivered a list of 21 occupants in 16 units and thereafter rent stabilized leases were executed, the last of which expired in September, 1988.

In 1998, the current landlord served a notice of non-renewal of lease based on Manocherian v. Lenox Hill Hospital, 229 AD2d 197, which held that a corporate tenant is not entitled to a renewal lease under the Rent Stabilization Law unless the lease specifies a particular individual as the occupant of a particular apartment. In the proceeding which ensued in Housing Court, both sides moved for summary judgment and formulated the key issue as whether the Province or alternatively the Jesuits was the tenant under the lease. The Housing Court ruled that Manocherian was not applicable because the landlord in word and deed treated the Jesuits as the primary tenant and not as a mere occupant or subtenant of the Province.

The Appellate Term rejected the Housing Court's analysis, but rather found that the 1989 Occupant List rendered the Manocherian case inapplicable insofar as it specified particular individuals as occupants of the apartment. The Appellate Term held if these same individuals are still occupying the units, the landlord should not relitigate these issues again. The Appellate Division agreed. The 1989 stipulation specifically identifies individuals which occupy the apartment and this would comport with the purpose of Manocherian which was to avoid the potential for a perpetual tenancy which would be an unconstitutional taking. The Appellate Division ruled that the Appellate Term properly remanded the case to the Housing Court for a determination of which units are no longer occupied by the individuals designated in the 1989 stipulation.

The landlord's son is 43 years old and has a long history of drug abuse and estrangement from his mother. She had obtained many orders of protection against him and had him arrested for violating those orders. Recently, he served time in jail and rehabilitation centers and since then has been living with his mother in her apartment. During the time he stayed with his mother, two other apartments became vacant in the building and were rented to new tenants. The landlord testified that these apartments were larger than 5F (a studio) and thus she could not afford to give one of those apartments to her son.

The court ruled that two nonadjacent apartments can indeed form one single residence, as past cases have ruled. The court found that for 18 years the tenant used 4F and 5F as a single residence and that the landlord was aware of this arrangement and did not object. The court relied on Brusco v. Armstrong to hold that since Apartment 4F is an ETPA apartment (rented between 1971 and 1974), the ETPA rules preclude an owner from recovering the apartment for owner occupancy purposes. Since the tenant occupied both apartments as a single unit, the first apartment's status "traveled with" the tenant which meant that 5F was bootstrapped to 4F's protected ETPA status. The court therefore dismissed the petition.

The Appellate Term reversed the lower court on grounds that the Civil Court misapprehended the governing regulatory framework. The Emergency Tenant Protection Act is an enabling act which empowered New York City and certain local governments to set up rent stabilization. The Court noted that in New York City, in 1974 when the ETPA was passed, stabilization had already been established. With the passage of the ETPA, the New York City Council extended stabilization coverage to tenants in qualifying buildings who had entered into possession during the period of vacancy decontrol (1971 to 1974).

The original Rent Stabilization Code contained no provision limiting the owner use remedy where the tenant has been in occupancy for twenty years or more. This limitation derives solely from chapter 234 of the Laws of 1984 which afforded such protection only to rent controlled tenants (tenancies in effect prior to 1971) and to tenants protected by the ETPA in cities having a population of less than one million. The Appellate Term held: "Notably, chapter 234 did not engraft the 20-year rule upon that part of the ETPA addressed to housing accommodations in cities having a population of one million or more," and quoted from the ETPA language that allegedly confined its coverage to cities with more than one million. The Court continued: "As we have seen, no regulation implementing the 20-year rule has in fact been adopted under New York City rent stabilization," and reiterated that the ETPA's Regulations apply to housing accommodations located in Nassau, Rockland and Westchester Counties.
Finally, the Court concluded: "When the Legislature has specified the cases to which its enactment shall apply and has failed to specify other particular cases, it is fair to conclude that the exclusion was intended. Thus, the absence from chapter 234 of any provision for rent stabilized or ETPA tenants within New York City provides a strong indication that this was not a matter of mere legislative oversight." The Court reinstated the petition which granted the owner a judgment of possession on personal use grounds.