Perlbinder v. Frangos, 66 N.Y.2d 698 (1985)

A primary lease can be deemed illusory when a landlord’s agent or partner sublets an apartment without intending to return, effectively circumventing rent stabilization protections for the subtenant.

Summary

Perlbinder, a partner in a residential building, sublet his apartments to Frangos after vacating them with no intention of returning. When Perlbinder refused to renew the sublease, Frangos complained to the Conciliation and Appeals Board (CAB). The CAB determined Perlbinder was an illusory prime tenant, and Frangos was entitled to a renewal lease with rent stabilization protections. The Supreme Court annulled the CAB’s determination, and the Appellate Division affirmed. The Court of Appeals reversed, holding that the CAB’s findings were supported by substantial evidence and its interpretation of the rent stabilization code was rational.

Facts

Perlbinder was one of 15 partners in a 442-unit residential building. He occupied two adjoining apartments for six years with his family. In 1974, he moved out permanently and sublet the furnished apartments to Frangos. When Perlbinder refused to renew Frangos’ sublease, Frangos filed a complaint with the CAB.

Procedural History

The CAB ruled in favor of Frangos. Perlbinder then initiated an Article 78 proceeding in Supreme Court, which annulled the CAB’s decision. The Appellate Division affirmed the Supreme Court’s ruling. The New York Court of Appeals granted leave to appeal.

Issue(s)

Whether the CAB’s determination that Perlbinder was an illusory prime tenant, thereby entitling Frangos to rent stabilization protections, was supported by substantial evidence and a rational interpretation of the Rent Stabilization Code.

Holding

Yes, because the CAB’s factual findings were supported by substantial evidence, and its interpretation of the Rent Stabilization Code to confer protection on