NEW YORK -- The landlord wanted to sell the seven-room, 4 1/2-bath apartment overlooking the East River, and Vincent Parco, private eye, agreed to take the case.

The target: a rent-controlled tenant, a.k.a. actress Ann Turkel, who was paying a mere $2,300 a month for an apartment worth at least $1 million on the cooperative market. The objective: To terminate Turkel's lease with extreme prejudice.

Enter the fast-talking Parco, one of a growing breed of housing detectives here. His sleuths found evidence that Turkel spent nine or 10 months a year in Beverly Hills, had a California driver's license and should not be considered a "primary tenant" under New York law.

A housing court judge ruled in Turkel's favor, saying she retained a New Yorker's "state of mind" because she never removed her furs, jewelry and artwork from the East 58th Street pied-a-terre. But an appeals court overturned the ruling last fall and sent Turkel packing.

Thousands of landlords and tenants are driven to deceptions large and small under New York City's 40-year-old rent control laws, which have so distorted the housing market here that both sides must engage in a constant form of guerrilla warfare.

"We've got plenty of low-income housing in New York," said veteran developer Seymour Durst. "But much of it is occupied by upper-income people."

Tenant advocates hotly dispute the industry's claim that rent control is largely welfare for the rich and a major cause of the city's housing shortage. In the tenant culture that reigns in New York, a cheap apartment is viewed as a right, not a privilege.

"Rent regulation is an absolutely essential municipal service, just like police and fire protection," said Michael McKee, director of the New York State Tenant and Neighborhood Coalition. "Housing should be treated as a public utility."

Whatever its excesses, rent control is politically untouchable in a city where 70 percent of all apartments fall under some form of rent regulation. The City Council recently voted to extend controls for three more years.

Even Gov. Mario M. Cuomo (D), who argues that federal programs like Social Security should be "means-tested" so that benefits are limited to the needy, has not dared challenge a system in which millionaires and welfare recipients are equally eligible.

New York's rent control, which began as an "emergency" law during World War II, covers all apartments built before 1947. Rent-controlled tenants need no leases; they have a statutory right to occupy their apartments. Landlords must ask state housing officials to approve case-by-case increases of up to 7.5 percent.

Rent stabilization was imposed retroactively on all apartments built between 1947 and 1974. Annual increases are determined by a Rent Guidelines Board, whose tumultuous meetings have been likened to "a Roman carnival" by developer Samuel LeFrak. The board granted a 3 percent rent increase last year.

Cuomo's attempt to manage the labyrinthine program has turned into one of his administration's biggest embarrassments. Since taking over the program in 1984, investigators say, the state's Office of Rent Administration has compiled a sordid record of unanswered phones, unopened mail, inaccurate instructions and interminable delays.

Cuomo declined to be interviewed for this article. But his housing commissioner, William Eimecke, asserted that he has greatly improved the antiquated system he inherited from city officials and a private landlords' group.

Nevertheless, Eimecke said, "it is very, very difficult to administer this kind of system, particularly in the contentious environment between landlords and tenants in New York . . . . It's as close to unadministrable as you can imagine."

Eimecke's 500-person rent control staff oversees 218,000 rent-controlled and 943,000 rent-stabilized apartments, including a handful at the Plaza Hotel that come complete with maid service. Each month, the agency receives 4,000 new complaints from landlords and tenants; another 12,000 cases a month are filed in housing court.

The rent control rolls are filled with prominent names like Mia Farrow, Darren McGavin and fashion designer Arnold Scaasi, who pays $985 for a six-room duplex overlooking Central Park. Sydney Biddle Barrows, the "Mayflower Madam," was paying $376 a month for her apartment while running a million-dollar escort service.

Many politicians benefit as well. Mayor Edward I. Koch (D), who earns $110,000 a year, has three rooms in Greenwich Village for $350 a month. Alexander B. Grannis, chairman of the state Assembly's housing committee, lives in a fashionable doorman building on East 87th Street for $870 a month. A similar two-bedroom apartment in a new high-rise three blocks to the north rents for $2,740 a month.

"It's a very, very tough political issue," Grannis said. "Half the tenants in the city are paying 40 or 50 percent of their income for rent, with controls. Otherwise they'd be homeless. But there are also very wealthy people we shouldn't be helping out with regulated apartments. It's a chance system."

John J. Gilbert III, president of the Rent Stabilization Association, the landlords' lobby, blames politicians such as Grannis and "tenant agitators" for designing an unworkable program.

"Do you think you could administer a system that allowed every single tenant in 1 million apartments to file as many complaints as they wanted to, in their wildest imagination, for free?" he asked. "If I'm a tenant and I don't want to pay rent . . . . I just get an inspector in there and find a few minor violations," which allows the tenant to withhold rent.

The Reagan administration recently proposed to cut off federal housing aid to the more than 200 cities with rent control, which include Washington, Boston, Hartford, Philadelphia, Newark, Los Angeles and San Francisco. But the plan is given little chance of passage. Opponents suffered another blow yesterday when the U.S. Supreme Court let stand a New York ruling upholding the constitutionality of rent control.

Despite their complaints, virtually all builders since 1974 have voluntarily agreed to stabilized rents -- albeit from a much higher starting point -- in exchange for lucrative tax breaks.

Still, the local housing market is so overheated that an empty rent-controlled apartment can be far more valuable to a landlord than an occupied one. This is particularly true when a building is being converted to a cooperative or condominium, as in the Turkel case.

As a rent-controlled tenant, Turkel had a permanent right to keep renting her 36th-floor apartment at bargain rates. But if the landlord could get her out, the apartment could be sold as a co-op for more than $1 million. Turkel's trial dragged on for nine months.

The major effect of such arcane rent control laws "is to line the pockets of attorneys," said Peter S. Herman, who represented Turkel in her four-year legal battle. "It gives my wife a charge card at Bloomingdale's."

It has also produced a boom for detectives like Parco, who charges $500 for a tenant investigation. He begins by checking public records to discover where a tenant votes, registers his car and pays utility bills. In more lucrative cases, he will install a surveillance camera in the building lobby for several months.

Typically, he says, illegal tenants "keep an apartment in the city and put their girlfriend, their mistress or their business associate in there. Meanwhile, they have three kids and live in a $500,000 home in Greenwich, Conn. . . . . Some of them are clever. They have all their mail going back to the apartment and have someone pick it up for them."

Many landlords also have run afoul of the law in their zeal to empty a building. Some have cut off heat and hot water, refused to make repairs or rented apartments to drug addicts. In a famous case several years ago, developer Donald J. Trump offered to shelter the homeless in a luxury building on Central Park South in an unsuccessful attempt to hasten the exit of paying tenants.

Justa via Fara, who lives in a $364-a-month Brooklyn apartment, says her landlord combined two apartments in an attempt to escape rent control, which applies only to buildings with six units or more. When the tenants were displaced for months of repairs, via Fara says, she moved back into the building -- sleeping without heat, water or electricity -- to ensure she did not lose her right to her apartment.

Jeff Bretl, an art director for an advertising agency, moved into his West 23rd Street apartment in 1984 after learning, through a friend, that the previous tenant had died. Although the deceased tenant's rent was about $200, the landlord charged Bretl $975.

Bretl filed an overcharge complaint with the state rent office. "The first form I sent in, they lost," he said. "They said they had moved 14 times and I should send another complaint. They gave me the wrong information time and time again. It's absolutely crazy; you can sit on hold for 45 minutes."

Bretl says he eventually lost his case on grounds that he hadn't done the proper paperwork.

A report by Grannis' Assembly committee found that one-third of all decisions by the state rent office were overturned or modified on appeal. One rent examiner testified that his supervisor told him "he didn't care if the cases were right or wrong, he just wanted them out."

"The system is run by people who have no training whatsoever," Grannis said. "You could call a dozen times and get a dozen different answers, if you could get them to answer the phone at all."

The landlords' lobby hopes that such criticism will fuel its latest drive to lift controls on the 72,000 rent-controlled apartments renting for $750 or more. A new study commissioned by the group found that the median household income in these apartments is $47,000, that 89 percent of the tenants are white and that most are young childless adults living in Manhattan. The vacancy rate in these units was said to be about triple the citywide average of 2.4 percent.

"The real estate industry spends millions of dollars on propaganda and suspect studies," responded tenant leader McKee. "Here's a rival statistic: 70 percent of all renters in New York City have household incomes under $25,000."

Housing Commissioner Eimecke says he has no way of knowing whether there are "legions of people benefiting from rent control who shouldn't be." Even if it were thought desirable to deny such benefits to the wealthy, he said, it would take a "massive" bureaucracy to check up on tenants' incomes, which would constitute an invasion of privacy.

Eimecke says he is not convinced that lifting controls would produce a surge of new construction and that other factors, such as high building costs, may be responsible for the city's housing squeeze. "You're asking people to take a very dangerous gamble," he said.

To that, Gilbert replies: "I don't believe the majority of politicians want to solve this problem. It's their drug. They have hooked the population of New York on a drug called rent control, and it's helped them get elected for the last four decades."