Recitation, as required by CPLR Rule 2219(a), of the papers considered in the review of the Respondent's Order to Show Cause to Vacate Stipulation of Settlement dated October 12, 2016 and judgment and warrant based thereon:

Upon the foregoing papers and for the following reasons, Respondent's Order to Show Cause is decided as follows.

Petitioner filed the Petition in this nonpayment proceeding on September 19, 2016, alleging that Respondent, a Rent Stabilized tenant, owed $4,303.23, comprised of rent at the monthly rate of $984.62 for the months of August and September 2016, rent of $586.80 for July 2016 and washing machine charges of $1747.19. Respondent pro se answered the Petition on [*2]September 27, 2016 using the court's form Answer and checking off, as her defense, a "General Denial". Under the "Counterclaims" section of the form, she added, "Resp. disputes amt. claimed. Repairs necc.". Petitioner by counsel and Respondent pro se settled the case by Stipulation on the first date the case was on this Court's calendar, October 12, 2016. A final judgment was entered in favor of Petitioner for $3519.87 as all rent due through October 2016, including "a MCI retrocharge $245.81", with issuance of the warrant of eviction forthwith, execution stayed to November 23, 2016 for Respondent to pay the judgment. The Stipulation included a list of conditions with access dates for Petitioner to inspect and make repairs.

Thereafter, Respondent retained counsel who now moves by Order to Show Cause for vacatur of the Stipulation of Settlement, and the judgment and warrant based thereon, pursuant to CPLR 5015 and RPAPL § 749(3). Respondent asserts that she unknowingly waived a rent overcharge defense that her newly-retained attorney brought to light. Respondent's counsel obtained a rent registration history from the New York State Division of Housing and Community Renewal ("DHCR") which shows that Respondent's apartment was last registered in 2005 with a monthly rent of $658.85; for the years 2006 through 2015 the DHCR's "Registration Apartment Information" statement indicates "Reg Not Found for Subject Premises", and nothing at all is reported for the year 2016. A copy of the DHCR's statement, certified on December 23, 2016, is attached to Respondent's moving papers as Exhibit D.

Respondent's attorney also argues that "the inclusion of MCI [major capital improvement] retro charges in the judgment amount was likely error", Attorney's Affirmation at ¶ 24, due to Petitioner's receipt of both MCI rent increases and J-51 real estate tax abatements. Three MCI Orders are attached to Respondent's moving papers (Exhibit E):

(1) Docket # PF 610116 OM — issued 10/31/2001 for a "Boiler/Burner" with an approved cost of $55,000, resulting in a monthly increase of $4.64/room; for Rent Stabilized apartments, the increase was effective 9/1/2001, resulting in a 2-month retroactive increase of $9.28/room;

(2) Docket # WK 610087 OM — issued 9/17/2009 for approved costs of $12,780 for "Concrete" and $5,200 for "Hallway Windows", resulting in a monthly increase of $1.49/room; for Rent Stabilized apartments, the increase was effective 3/1/2009, resulting in a 7-month retroactive increase of $10.43/room;

(3) Docket # XE 610057 OM — issued 12/24/2009 for approved costs of $72,225 for a "New Roof", $90,710 for "Façade" and $6,250 for "Sidewalk Shed", resulting in a monthly increase of $13.99/room; for Rent Stabilized apartments, the increase was effective 8/1/2009, resulting in a 5-month retroactive increase of $69.95/room.

These MCI Orders reflect that the building contains a total of either 141 or 144 rooms and that Respondent lives in a 4-room apartment.

Respondent's attorney also attaches J-51 Benefit History Summary printouts from the New York City Department of Finance's ("DOF") website for the tax years 2004-05 through 2016-17 (Exhibit F), which reflect that DOF has awarded Petitioner two 14-year J-51 abatements:

(1) Beginning in tax year 2004-05: based on an unspecified alteration cost of $39,400, an annual abatement of $1641.66 in the first year which increased to $3283.32 in 2005-06 and continued at that rate through tax year 2015-16 when the abatement ended;

(2) Beginning in tax year 2010-11: based on an unspecified alteration cost of $55,775, an annual abatement of $4647.88.

In the alternative, Respondent seeks a stay of execution of the warrant, and additional time to pay rent arrears, pursuant to CPLR Section 2201.

In opposition, Petitioner asserts that Respondent's claim of rent overcharge lacks merit and that her claim that Petitioner failed to file registration statements for the past 11 years "is simply untrue." Affidavit in Opposition at ¶ 11. Rather than examining the Apartment Registration Information statement for Respondent's apartment only, "[h]ad Respondent's counsel conducted a building-wide search for the registration statements, it would have found that Petitioner filed appropriately for the years in quest[ion] and is in fact current with filing its registration statements." Id. Petitioner provides no documentation to support this assertion in its opposition papers. Regarding the J-51 tax abatements and MCI retroactive charges, Petitioner points out that its rent ledgers for Respondent's apartment in fact do provide J-51 tax credits which reduce her rent. Petitioner provides a rent ledger dated March 8, 2017 dating back to February 2016 in support of this claim (Exhibit B), which lists a "J51 TAX ABT" credit of $5.28 in and for each month.

It is well-settled that stipulations of settlement "are favored by the courts and are not lightly case aside." Hallock v State of New York (64 NY2d 224, 230, 474 NE2d 1178, 485 NYS2d 510 [1984]). However, "where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident," id., "[t]he court 'possesses the discretionary power to relieve parties from the consequences of a stipulation effected during litigation upon such terms as it deems just and, if the circumstances warrant, it may exercise such power if it appears that the stipulation was entered into unadvisedly or that it would be inequitable to hold the parties to it.'" Genesis Holding, LLC v Watson (5 Misc 3d 127[A], 798 NYS2d 709 [App Term 1st Dep't 2004]), quoting 1420 Concourse Corp v Cruz (135 AD2d 371, 373, 521 NYS2d 429 [1987], app dism'd 73 NY2d 868, 534 NE2d 325, 537 NYS2d 487 [1989]), citing Matter of Frutiger (29 NY2d 143, 150, 272 NE2d 543, 324 NYS2d 36 [1971]).

Regarding Rent Stabilized apartments, under Section 2520.13 of the Rent Stabilization Code, "An agreement by the tenant to waive the benefit of any provision of the RSL [Rent Stabilization Law] or this Code is void ". Thus, for example, in Riverside Syndicate, Inc v Munroe (10 NY3d 18, 882 NE2d 875, 853 NYS2d 263 [2008]), the Court of Appeals found that a landlord's agreement not to enforce the "primary residence" requirement of the Rent Stabilization Law in exchange for an illegal rent was void and against public policy. And where a "[t]enant, now represented by counsel, has submitted documentary evidence which shows the existence of possible defenses to landlord's rent claim" which the tenant while unrepresented did not know to raise before settling the case, it may be reversible error for a Housing Court Judge to deny a motion to vacate the stipulation of settlement. 2722 8th LLC v Watson (10 Misc 3d 140[A], 814 NYS2d 565 [App Term 1st Dep't 2006]). See also, e.g., Jazilek v Abart Holdings LLC (10 NY3d 943, 893 NE2d 1323, 862 NYS2d 854 [2008])(so-ordered stipulation which provided for a lease fixing the rent at an amount in excess of the legal limit under the Rent Stabilization Code found to be void as against public policy); Drucker v Mauro (30 AD3d 37, 814 NYS2d 43 [1st Dep't 2006])(declaring unenforceable a lease rider which incorporated the terms of a settlement agreement that did not comply with certain provisions of the Rent Stabilization Law); 153rd St Apt LLC v Alveranga (30 Misc 3d 129[A], 958 NYS2d 647 [App Term 1st Dep't 2010])(rejecting landlord's argument that tenant's overcharge and habitability claims were precluded by stipulations in prior proceedings, as "It is well settled that any [*3]agreement by a tenant to pay a sum in excess of the legal rent is void"); Second Lenox Terrace Assoc v Cuevas (24 Misc 3d 1217[A], 897 NYS2d 672 [Civ Ct NY Co 2009])(vacating two-attorney stipulation under which tenant forfeited any succession rights she may have had to Rent Stabilized apartment, finding agreement to be void as against public policy).

Where documentary evidence shows the existence of a "possibly meritorious rent overcharge claim," the court has the discretion to grant a motion to vacate a stipulation entered into by a previously unrepresented, rent regulated tenant, and it may be reversible error not to do so. 2701 Grand Assn LLC v Morel (50 Misc 3d 139[A], 31 NYS3d 924 [App Term 1st Dep't 2016])(reversing lower court's order denying previously unrepresented tenant's motion to vacate a Stipulation based on tenant's showing that the landlord had increased the rent by 88% when the prior tenant vacated the apartment). See also, e.g., Tabak Associates LLC v Vargas (48 Misc 3d 143[A], 20 NYS3d 294 [App Term 1st Dep't 2015])(upholding lower court's order vacating a stipulation where "tenant, now represented by counsel, has demonstrated that she has a potentially meritorious rent overcharge claim, which should not be deemed forfeited by her uncounseled decision to consent to judgment"); Berco Realty LLC v Thiombiano (45 Misc 3d 129[A], 999 NYS2d 796 [App Term 1st Dep't 2014])(upholding lower court's order vacating a stipulation where "[t]enant, now represented by counsel, has submitted documentary evidence which shows the existence of an arguably meritorious rent overcharge claim"); Clermont York Assoc LLC v Zgodny (42 Misc 3d 143[A], 988 NYS2d 522 [App Term 1st Dep't 2014])(same); Striver 140 v Cruz (1 Misc 3d 29, 770 NYS2d 814 [App Term 1st Dep't 2003])(upholding lower court's order vacating stipulation executed by previously unrepresented tenants where they "have made a prima facie showing of defenses based upon breach of the warranty of habitability and rent overcharge").

Here, Respondent's newly-retained counsel has obtained a copy of the DHCR's rent registration history statement for Respondent's apartment. This statement shows that the last annual registration statement was filed in 2005, and no registrations have been filed since then. A fundamental tenet of Rent Stabilization is the requirement that owners register apartments subject to this law annually with the DHCR. Under Section 26-517 of the Rent Stabilization Law, "[t]he failure to file a proper and timely initial or annual rent registration statement shall, until such time as such registration is filed, bar an owner from applying for or collecting any rent in excess of the legal regulated rent in effect on the date of the last preceding registration statement ." RSL § 26-517(e). In addition to filing with the DHCR, owners must "provide each tenant then in occupancy with a copy of that portion of such annual statement as pertains to the tenant's unit." RSL § 26-517(f). See also Rent Stabilization Code § 2528.3 ("Annual registration requirements") and § 2528.4 ("Penalty for failure to register").

At the time of the last registration in 2005, Respondent's "Legal Regulated Rent" was $658.85 under a lease running from August 1, 2003 through July 31, 2005. However, the Petition and Petitioner's rent ledger reflect a current monthly rent of $984.62, which is almost 150% of that last registered rent. Accordingly, Respondent has shown "the existence of an arguably meritorious rent overcharge claim", Berco Realty LLC v Thiombiano, supra, that she did not know about prior to retaining counsel and that was not addressed in the agreement that she pro se and Petitioner by counsel came to on October 12, 2016. That Stipulation of Settlement thus was inadvisedly entered into by Respondent and it is hereby vacated, along with the judgment and warrant of eviction that followed. Matter of Frutiger, supra.

Petitioner's argument that Respondent's counsel should have "conducted a building-wide [*4]search for the registration statements" rather than relying on the statement the DHCR provided for Respondent's apartment is misplaced. Under Section 26-517(b) of the Rent Stabilization Law, the only registration information available to a tenant or her authorized representative is that pertaining to her own apartment, as other registration information "shall not be subject to the freedom of information law".

Based on the above, it is not necessary for the court to determine whether Respondent has also shown "the existence of an arguably meritorious rent overcharge claim" arising from the documentation of J-51 real estate tax abatements and MCI rent increases awarded to Petitioner by DOF and DHCR over the past fifteen years. However, the court notes that Petitioner's rent ledger does indeed apply a J-51 tax credit of $5.28 each month. Further, the requirement that MCI increases be reduced by one-half of a J-51 annual tax abatement only arises when that abatement is attributable to the same improvements or alterations that underlie the MCI increases. See Administrative Code of the City of NY § 11-243 [dd][2]; 28 RCNY § 5-03 [f][6][i]. A comparison of the J-51 and MCI documents for the subject premises, described in detail above, shows that they do not necessarily line up with each other as to the scope and cost of the specific items of improvements made to secure the two J-51 tax abatements on the one hand and the three MCI orders on the other. Thus, it remains to be seen whether either, both or neither of the two J-51 tax abatements are attributable to the same improvements that underlie the three MCI orders.

For the reasons stated above, Respondent's Order to Show Cause is granted to the extent of vacating the Stipulation of Settlement and the judgment and warrant based thereon and restoring the case to the court's calendar for settlement or trial on May 17, 2017. Copies of this Decision & Order will be provided to the parties' respective counsel in court.

This constitutes the Decision and Order of this Court.