Riverside Syndicate, Inc. v. Munroe

Summary

The New York Court of Appeals held that an agreement allowing tenants to pay an illegal rent for a rent-stabilized apartment in exchange for the landlord's waiver of primary-residence requirements was void and unenforceable by either party. The court rejected the tenants' arguments that the agreement was a valid settlement or barred by the statute of limitations, and affirmed the declaratory judgment invalidating it.

Holdings

1. An agreement by tenants to pay an illegal rent for a rent-stabilized apartment in exchange for the landlord's agreement to permit use as a second home and not enforce the primary-residence requirement is void and cannot be enforced by either party.
2. The negotiated-settlement exception in Rent Stabilization Code § 2520.13 does not apply where the agreement is not a bona fide compromise of a dispute concerning what the law permits and instead seeks to achieve conduct the law undisputedly prohibits.
3. The six-year statute of limitations for an action upon a contractual obligation does not make an agreement that was void at inception valid by the passage of time, and it did not bar this declaratory-judgment action on the facts presented.
4. The agreement is void as to both parties, and neither party may rely on it.

Questions Presented

1. Whether an agreement permitting tenants to pay an illegal rent for rent-stabilized apartments in exchange for the landlord's agreement not to enforce the primary-residence requirement is void and unenforceable.
2. Whether the negotiated-settlement exception in Rent Stabilization Code § 2520.13 validated the agreement.
3. Whether the six-year limitations period for contractual obligations barred the landlord's declaratory-judgment action.
4. Whether the agreement could be relied upon by either party after being declared void.

Disposition

affirmed