The following papers numbered 1-24 read on this Order to Show Cause:

Order to Show Cause and Affirmation/affidavit in Support1-3

Affirmation in Opposition16

Exhibits4-15, 19-23

Reply Affirmation18

Memorandum24

Petitioner moved for an order restoring this case to the calendar and for entry of a final judgment based on respondent's default on the stipulation. Respondent now seeks an order vacating the stipulations dated February 9, 2009 and November 12, 2009; vacating the default judgment entered on August 22, 2008 and dismissing the proceeding.

Petitioner commenced this non payment proceeding on or about June 27, 2008 seeking rent from April 2008 through June 2008. The petition states that the apartment is subject to rent stabilization, and the monthly rent as $555.94. A default judgment was entered on August 22, 2008 based on respondent's failure to answer. On November 2008, respondent moved to vacate the default judgment. On the return date of December 1, 2008, the court appointed a Guardian ad Litem( GAL) and the matter was adjourned. Subsequently, respondent's GAL signed the stipulation dated February 9, 2009 agreeing that the arrears in the amount of $1111.88 would be paid by March 30, 2009. On November 12, 2009, respondent's GAL entered into another stipulation agreeing to pay arrears in the amount of $6620.34.

Respondent contends that the stipulations and default judgment should be vacated because the amounts sought by petitioner were incorrect. Respondent asserts that according to NYCHA Section 8 records, her subsidy was terminated on September 30, 2007. At that time, respondent's monthly rent was $450.78, and her share of the rent was $190.00. Respondent maintains that she did not owe any portion of her share when the proceeding was commenced, and claims that rent sought by petitioner was attributable to Section 8. [*2]

In reply, petitioner alleges that respondent's Section 8 subsidy was terminated on May 31, 2006 based on respondent's failure to recertify pursuant to the correspondence dated March 15, 2006 which petitioner received from Section 8. Petitioner also submitted a copy of a lease renewal signed by respondent on May 1, 2009 for a two-year term beginning on June 1, 2009 with a monthly rent of $640.94. In addition, petitioner contends that in a prior proceeding respondent agreed to pay the sum of $8490.50. This amount represented all rent due through March 2008, and the full amount of the stabilized rent after Section 8 terminated the subsidy. This sum was paid in full.

However, petitioner signed the stipulation dated March 25, 2010, which recites that the NYCHA representative appeared in court and stated that respondent's termination resulted from a suspension based on a failed inspection. Petitioner did not dispute NYCHA's representation. The default judgment was also vacated in this stipulation.

According to petitioner's rental history ^[FN1] petitioner continued to receive Section 8 payments through March 2007.This rental history also indicated that petitioner deemed the lease renewed for the period prior to June 2009.

There is no dispute that respondent's Section 8 subsidy was terminated. It is well established that upon termination of the subsidy, a tenant will not be liable for the subsidy portion of the rent unless there is a new agreement in which the tenant agrees to pay the full rent, Licht v. Moses,11 Misc 3d 76 [App. Term 2nd Dept. 2006], Rainbow Associates v. Culkin, WL 2003 2004427 [App. Term 2nd Dept. 2003].

Petitioner presented no evidence of any agreement in which respondent knowingly agrees to pay more than her share. The petition in this proceeding seeks the full monthly rent which includes respondent's share, as well as the subsidy formerly paid by Section 8. Respondent's GAL, who was not represented by counsel at the time, signed both stipulations in this case agreeing to pay more than respondent's share. It is evident that respondent and her GAL were not aware of respondent's substantial defense to this proceeding pursuant to RPAPL§711(2) that petitioner could only seek rent based on an agreement to pay the rent demanded, Licht v. Moses, supra. The rent sought in this petition is based on a deemed renewal lease which was not signed by respondent, and in any event, renewal of the rent stabilized lease renews the lease on the same terms and conditions as the prior lease, 9 NYCRR 2522.5[b][1], Rosario v. Diagonal Realty,LLC, 8 NY3d 755 (2007). In this case, the terms and conditions include the HAP contract for the Section 8 subsidy.

It is well settled that stipulations of settlement are favored by the courts, Hallock v. State of New York, 64 NY2d 224, (1984). However, the court may vacate a stipulation upon a showing of good cause, Matter of Frutiger, 29 NY2d 143, (1971). The discretion of the court to vacate a stipulation is not confined to instances of collusion, mistake, accident, fraud and surprise, Solack Estates v. Goodman, 102 Misc 2d 504, aff'd 78 AD2d 512 (1980). " [T]he court has the power [*3]to relieve a party from a stipulation in a situation which is unjust or harsh even when fully understood and authorized " Bond v. Bond, 260 A.D. 781, (1940), and the court should vacate the stipulation when the parties can be restored to their former status, ( 2 Carmody -Wait 2d, NY Prac 7:20).

Petitioner cannot maintain this non payment proceeding seeking rent that respondent never agreed to pay. Accordingly, petitioner's motion for a final judgment is denied. Respondent's motion is granted. The stipulations dated February 9, 2009 and November 12, 2009 are hereby vacated, and the proceeding is dismissed.

This constitutes the decision and order of this court.

Dated: January 25, 2011

_________________________

Cheryl J. Gonzales, JHC