Matter of Avon Furniture Leasing v. Popolizio

In Matter of Avon Furniture Leasing v. Popolizio (116 A.D.2d 280 [1st Dept 1986]), which concerned the right to subscribe to a plan of cooperative ownership, the Court discussed the rationale behind the development of the law of illusory tenancy. The Court described the term "illusory tenant" as one who while assuming the guise of a prime tenant enters into a sublease arrangement which has the effect, directly or indirectly, of evading the requirements of the Rent Stabilization Law. The Court found an illusory tenancy is indicated where the prime tenant rents an apartment, which it never intends to occupy but rather rents it for the purpose of subleasing for profit or otherwise depriving the subtenant of rights under the RSL. It determined that a finding of collusion between the owner of the property and the prime tenant is not an essential prerequisite to finding an illusory tenancy. The reason being that the stated purpose of the RSL to prevent unjust, unreasonable and oppressive rents is no less objectionable when it is done by someone other than the landlord without the collusion of the landlord.