Subtenant Can't Get Lease

Subtenant complained that landlord wouldn't give him a rent-stabilized lease in his own name. He claimed that tenant was an illusory tenant, who schemed with landlord to overcharge tenant. Since he was the actual tenant, subtenant claimed that he should get a lease. The DRA ruled against subtenant. The DRA found that since landlord didn't profit from tenant's overcharge of subtenant, there was no illusory tenancy. Subtenant appealed and lost. The DRA was incorrect about the law. To prove illusory tenancy, subtenant must prove only that landlord knew or should have known about the sublet, and that either landlord or tenant profited from it. In this case, subtenant didn't prove that landlord had any constructive or actual knowledge that tenant was subletting the apartment. He never told landlord about the sublet and never sought permission to do so.

Schweiger: DHCR Adm. Rev. Docket No. WE410001RP (7/16/08) [2-pg. doc.]