Civil Court of the City of New York, New York County, October 9, 2018

Heiberger & Associates, P.C. (Robert Ehrlich of counsel) for petitioner.

Manhattan Legal Services (Erica Braudy of counsel) for respondent.

ABJ Milano LLC, the petitioner in this proceeding, commenced this summary proceeding against Stanley Howell, the respondent in this proceeding, seeking possession of 165 West 122nd Street apartment 4A, New York, New York (the subject premises) on the basis that respondent is a licensee whose license has expired. Respondent interposed an answer containing a number of defenses and a counterclaim for harassment. The court held a trial of this matter on August 8, 2018, and August 28, 2018, and then adjourned the matter to September 28, 2018, for submissions of posttrial memoranda.

While the record shows some fact disputes between the parties, neither party disputes a number of pertinent facts at trial. Petitioner is the proper party to commence this proceeding. Petitioner effectuated service of a notice to quit pursuant to RPAPL 713 before commencing this proceeding. Respondent has, at least at some point in the past, been a tenant of the subject premises subject to the Rent Stabilization Law, most recently according to a two-year lease commencing October 1, 2016, with a rent of $659.79 a month.{**61 Misc 3d at 1039}

Respondent and petitioner executed an agreement on December 23, 2016 (the agreement), not in court, providing that respondent would surrender possession of the subject premises on or before March 15, 2017, in exchange for which petitioner would give respondent $20,000; that the agreement is irrevocable and unconditional; that respondent's default in vacating would subject respondent to immediate eviction for holding over and to liability for use and occupancy at a rate of $1,500 per day; that petitioner does not have to repair any conditions; and that respondent would withdraw claims at the New York State Division of Housing and Community Renewal with prejudice. The agreement also contains a general release. Petitioner paid respondent $3,000 as an initial payment pursuant to the agreement. Petitioner drafted the agreement. Petitioner tried to find another apartment for respondent.

Respondent testified that he is 72 years old; that he has lived in the subject premises for eight years; that he has lived in the neighborhood for 20 years; that he is retired; that he is unemployed; that he lives alone; that he is in receipt of a federal housing subsidy pursuant to 42 USC § 1437f, commonly known as "Section 8"; that his source of income is Social Security disability; that one of his disabilities is a psychiatric disability, relating to stress and depression, for which he takes medication; that his last family member died in November of 2016; that the death had a psychological effect on him; and that he was suffering from depression when he signed the agreement. Respondent introduced into evidence documentation of a prescription he received for an antidepressant dated January 17, 2017, and a letter from a doctor dated February 23, 2017, stating that respondent has been a patient since February 1, 2017, and is being treated for depression. Petitioner did not rebut or dispute this evidence presented by respondent.

Respondent testified that someone who works for petitioner initiated the communication about surrendering the subject premises; that this person called respondent twice a week and visited respondent three times a week in the three weeks before the execution of the agreement; that this person said that petitioner would not renew respondent's lease, thus putting his Section 8 subsidy in jeopardy; and that respondent initially declined petitioner's entreaties to surrender the subject premises.

The parties disputed whether petitioner advised respondent to seek counsel before signing the agreement.{**61 Misc 3d at 1040}

Respondent had offered to send the $3,000 petitioner initially paid him back to petitioner.

[1] The court may enforce an out-of-court agreement of a rent-regulated tenant to surrender an apartment for consideration, although public policy and equitable concerns inform the court's evaluation of such an agreement (686 W. 204th St. LLC v Athanasios, 44 Misc 3d 143[A], 2014 NY Slip Op 51402[U] [App Term, 1st Dept 2014]; see BJW LLC v Chung, NYLJ, Mar. 21, 2018 at 40, 2018 NYLJ LEXIS 832, *8-10 [Civ Ct, Kings County 2018] [an evaluation of the bargaining power of the parties affects the enforceability of an out-of-court surrender]). Accordingly, the court will enforce an out-of-court surrender when a landlord otherwise had cause to commence an eviction proceeding against a tenant, when it was the tenant who initiated the negotiation, and when the tenant obtained the advice of counsel (Merwest Realty Corp. v Prager, 264 AD2d 313, 313-314 [1st Dept 1999]).

In this proceeding, petitioner did not show that it otherwise had any cause to seek respondent's eviction, a factor distinct from Merwest Realty Corp. (264 AD2d at 313-314), and a factor militating against enforceability of an out-of-court surrender (Bravo Realty Corp. v Lewis, NYLJ, July 7, 2004 at 5, 2004 NYLJ LEXIS 2966, *7-9 [Civ Ct, NY County 2004]). Petitioner did not dispute respondent's testimony that petitioner's employees stated that petitioner would not renew respondent's lease if respondent did not surrender the subject premises, an empty threat against a rent-stabilized tenant who is entitled to a lease renewal by operation of law (Administrative Code of City of NY § 26-511 [c] [4]; 9 NYCRR 2523.5 [a]). Misleading a tenant into believing that the tenant has no other option but to vacate a rent-stabilized apartment voids an out-of-court surrender (Reid v DDEH 103 E. 102 LLC, 20 Misc 3d 1139[A], 2008 NY Slip Op 51798[U] [Sup Ct, NY County 2008]).

Even though petitioner demonstrated no cause to seek respondent's eviction, petitioner, and not respondent, initiated the negotiation with respondent to surrender respondent's tenancy. The New York City Housing Maintenance Code, amended on December 2, 2015, before petitioner initiated contact with respondent, defines as harassment an owner's initiation of contact with a tenant to induce a tenant to vacate the tenant's apartment in the absence of detailed written disclosures including, inter alia, that the tenant may reject an offer and that the tenant may seek guidance of counsel{**61 Misc 3d at 1041} (Administrative Code of City of NY § 27-2004 [a] [48] [f-2]). Thus, petitioner's initiation of negotiation of a surrender of respondent's tenancy constitutes another factor distinguishing this matter from Merwest Realty Corp. (264 AD2d at 313-314), contravenes policy as expressed by the New York City Housing Maintenance Code, and weighs against enforcement of the agreement (Bravo Realty Corp., NYLJ, July 7, 2004 at 5, 2004 NYLJ LEXIS 2966; compare Oshy v Koufa Realty Corp., 35 Misc 3d 1207[A], 2012 NY Slip Op 50603[U] [Sup Ct, Queens County 2012] [a tenant's initiation of a negotiation of a surrender is a significant factor militating in favor of enforcing the resulting surrender agreement]).

Yet another factor distinguishing this matter from Merwest Realty Corp. (264 AD2d at 313) concerns the availability of counsel. The tenant in Merwest Realty Corp. (264 AD2d 313) executed a surrender in consultation with an attorney, while respondent did not, a ground upon which to decline to enforce an out-of-court surrender (Dzaferovic LLC I v Hernandez, 2018 NY Slip Op 32795[U] [Civ Ct, Queens County 2018]; Paniccioli v Division of Hous. & Community Renewal, 15 Misc 3d 1107[A], 2007 NY Slip Op 50528[U] [Sup Ct, Kings County 2007]; Bravo Realty Corp., NYLJ, July 7, 2004 at 5, 2004 NYLJ LEXIS 2966).

Respondent also receives Section 8 benefits, compelling the conclusion that respondent's income is low (see 24 CFR 982.1 [a] [1] [the purpose of Section 8 is to provide affordable housing for its beneficiaries]). Respondent receives Social Security disability, compelling the conclusion that respondent is disabled. A tenant's vulnerabilities, resulting from poverty and disabilities, factor against enforcement of an out-of-court settlement as well (Bravo Realty Corp., NYLJ, July 7, 2004 at 5, 2004 NYLJ LEXIS 2966).

Petitioner argues that respondent's acceptance of the $3,000 that petitioner tendered respondent nullifies any argument respondent may have against enforcement of the agreement. However, petitioner does not rebut that respondent attempted to return the money, another factor weighing against enforcement of the agreement (id.; cf. Grasso v Matarazzo, 180 Misc 2d 686, 689 [App Term, 2d Dept 1999] [the court restored a tenant to possession of an apartment a tenant had agreed to surrender without making the tenant return $2,500 that the landlord had given the tenant upon a finding that the agreement was the product of coercion]).{**61 Misc 3d at 1042}

As petitioner showed no cause to evict respondent before negotiating the agreement, as petitioner, and not respondent, initiated the negotiation, as petitioner communicated to respondent that petitioner would not renew respondent's lease if he did not surrender, as respondent did not have an attorney to consult, and as respondent has demonstrated poverty and a disability, the agreement is not enforceable. Respondent therefore is a rent-stabilized tenant of the subject premises and not a licensee. The court therefore dismisses this proceeding with prejudice to petitioner's cause of action sounding in possession, although without prejudice to any non-possessory cause of action relating to the $3,000 petitioner had given respondent, and without prejudice to any defense respondent may have to such a cause of action of petitioner.

[2] Respondent counterclaims for relief sounding in harassment. Petitioner's initiation of the negotiation of the agreement squarely fits into the definition of harassment as defined by Administrative Code of City of NY § 27-2004 (a) (48) (f-2). The Housing Maintenance Code entitles tenants to seek to have housing maintenance code violations placed on the subject premises, to seek an order from a court restraining an owner from engaging in such conduct, and to impose civil penalties payable to the New York City Commissioner of Finance (Administrative Code of City of NY § 27-2115 [m] [2]; 226-228 E. 26th St. LLC v Rhodes, 2008 NY Misc LEXIS 7516 [Civ Ct, NY County 2008]). Administrative Code of City of NY § 27-2115 (m) (2) provides that, upon a finding of harassment, the court shall impose a civil penalty of not less than $2,000 and not more than $10,000.

The court therefore directs petitioner to restrain from engaging in any conduct in violation of Administrative Code of City of NY § 27-2004 (a) (48) (f-2). In light of petitioner's undisputed attempts to relocate respondent to an elevator building, the court at this time imposes the minimum penalty of $2,000 on petitioner, payable to the New York City Commissioner of Finance.