378 Realty Corp. v. New York City Rent & Rehabilitation Administration

39 Misc. 2d 30, 240 N.Y.S.2d 58, 1963 N.Y. Misc. LEXIS 2073
CourtNew York Supreme Court
DecidedMay 3, 1963
StatusPublished

This text of 39 Misc. 2d 30 (378 Realty Corp. v. New York City Rent & Rehabilitation Administration) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
378 Realty Corp. v. New York City Rent & Rehabilitation Administration, 39 Misc. 2d 30, 240 N.Y.S.2d 58, 1963 N.Y. Misc. LEXIS 2073 (N.Y. Super. Ct. 1963).

Opinion

Thomas A. Aurelio, J.

Defendants move pursuant to rule 112 of the Rules of Civil Practice for judgment on the pleadings or in the alternative granting declaratory judgment in favor of the defendants pursuant to rule 113. Plaintiffs cross-move for summary judgment in their favor. The action is brought for a declaration that so much of section 2 (subd. 2, par. [b]) of the Emergency Housing Rent Control Law (L. 1946, ch. 274, as amd. by L. 1950, ch. 250) and subdivision 7 of section 3 of the State Rent and Eviction Regulations of the Temporary State Housing Rent Commission as adopted and in effect on April 30, 1962 were and are arbitrary and confiscatory and as such are unconstitutional and violative of the Fourteenth Amendment of [31]*31the United States Constitution and section 6 of article I of the New York State Constitution; for a further declaration that section Y41-3.0 (subd. e, par. 2, el. [c]) of Local Law No. 20 of the Local Laws of the City of New York for 1962 and subdivision d of section 3 of the City Rent, Eviction and Rehabilitation Regulations were enacted without basis in fact in that there was adoption without question of pre-existing provisions of the State Rent Control Act of 1961 and the relevant State Rent and Eviction Regulations promulgated by the Temporary Housing Rent Commission; and for further declaration that so much of section Y41-3.0 (subd. e, par. 2, cl. [c]) of Local Law No. 20 and subdivision d of section 3 of the Rent, Eviction and Rehabilitation Regulations are unconstitutional in that they violate the provisions of the Fourteenth Amendment of the United States Constitution and section 6 of article I of the New York State Constitution; and finally for a judgment of permanent injunction. It is conceded that insofar as pertinent the local law and regulations adopted pursuant thereto are substantially the same as those which existed under the State jurisdiction and now under attack. Except for the constitutional question raised, plaintiffs’ sole remedy is by article 78 review.

The issue has been heretofore fully considered and adjudicated although the plaintiffs suspect that the prior adjudications are erroneous.

In Hotel Armstrong v. Temporary State Housing Rent Comm. (11 A D 2d 395) plaintiffs sought a declaratory judgment that the commission was without power to regulate rents charged by it, asserting that the 1959 amendments to the rent statute (L. 1959, ch. 695) were not applicable and that in any event the amendments were unconstitutional for lack of legislative standards to guide the exercise of administrative discretion. In 1949 the owner had been granted a certificate of occupancy as a hotel. The premises had not been subject to rent control under the Federal rent control statutes and it was conceded that its rents had never been under the regulation of the State Rent Commission. Plaintiffs ’ purchase was made in February, 1959 believing the premises to be exempt from rent control. Despite prior status the Rent Commission initiated proceedings to fix and enforce maximum rents in accordance with the 1959 amendments. It was concluded that the State Rent Control Act as amended in 1959 was applicable to housing accommodations such as those owned by the plaintiff despite the fact that it had been never theretofore under control at any time. The court stated (p. 398): “ In short, the amendments are applicable to housing accommodations styled as hotels which do not satisfy the definí[32]*32tion of hotels in the statute, even though such housing accommodations have not been subject to rent control since 1950, and even though such accommodations were once properly classified as hotels but have since deteriorated into something less

The State rent law (§ 2, subd. 2, par. [b]) at that time provided that a hotel to win exclusion must qualify as a housing accommodation which on March first, nineteen hundred fifty, was and still is commonly regarded as a hotel in the community in which it is located and which customarily provides hotel services such as maid service, furnishing and laundering of linen, telephone and secretarial or desk service, use and upkeep of furniture and fixtures, and bellboy service ’ ’.

In that connection the court observed (p. 398): “ In order to qualify a hotel must have been a hotel on two dates: on March 1, 1950, and now. Plaintiff’s premises, therefore, are not excluded from the statutory language unless they constitute a hotel now.”

Subdivision 2-b of section 4 of the State Emergency Housing Bent Control Law also provided as follows: “ Provision shall be made pursuant to regulations prescribed by the commission for the establishment, adjustment and modification of maximum rents in rooming houses, which shall include those housing accommodations subject to control pursuant to the provisions of paragraph (b) of subdivision two of section two of this act, having regard for any factors bearing on the equities involved, consistent with the purposes of this act to correct speculative, abnormal and unwarranted increases in rent.” Concerning those provisions the court concluded (p. 400) that it expressly confers upon the commission the power to fix maximum rents for hotels,1 pseudo ’ or ‘ decayed ’, which it is empowered to regulate under the 1959 amendment to section 2 of the emergency law.”

That provision the court stated (pp. 400-401) was placed in section 4 which also contains, immediately following subdivision 2-b, subdivision 3 which provides as follows: 1 ‘ Whenever the foregoing standard is not susceptible of application to a housing accommodation to which this act applies, and for which no maximum rent was established on March first, nineteen hundred fifty, or where no registration statement had been filed as had been required by the federal act, the maximum rent thereof shall be fixed by the commission, having regard to the maximum rents for comparable housing accommodations or any other factors bearing on the equities involved, consistent with the purposes of this act.” The “ foregoing standard ” was held to be the maximum rents fixed under the Federal laws as of March 1, 1950 and it was held (p. 401) that “ Consequently, if subdivisions 2-b and 3 are read together, there are sufficient legislative stand[33]*33ards to guide the Rent Commission. Moreover, statutes are entitled to a presumption of validity and to a construction, if alternatively available, which will support constitutionality (Kauffman & Sons Saddlery Co. v. Miller, 298 N. Y. 38, 44; Matthews v. Matthews, 240 N. Y. 28, 34-35). Hence, the statute, if thus construed, may and should be sustained. Of course better draftsmanship would have avoided even the semblance of a question on this point. * * * True, the provision contains the disjunctive 1 or ’ between the reference to the maximum rents for comparable accommodations and the equitable factors. Nevertheless, the subdivision is invulnerable to attack if it is read to require, as it should be, that the Rent Commission is required to consider maximum rents for comparable housing accommodations in the first instance and that such comparable rents are only subject to adjustment by the other factors bearing on the equities involved.”

The court also ruled with respect to the constitutionality of section 36 of the regulations applicable to the fixing of maximum rents for the housing accommodations there involved. Section 36 of the regulations read in part as follows:

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H. Kauffman & Sons Saddlery Co. v. Miller
80 N.E.2d 322 (New York Court of Appeals, 1948)
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Bluebook (online)
39 Misc. 2d 30, 240 N.Y.S.2d 58, 1963 N.Y. Misc. LEXIS 2073, Counsel Stack Legal Research, https://law.counselstack.com/opinion/378-realty-corp-v-new-york-city-rent-rehabilitation-administration-nysupct-1963.