Charles H. Greenthal Co. v. State Division of Housing & Community Renewal

126 Misc. 2d 795, 484 N.Y.S.2d 445, 1984 N.Y. Misc. LEXIS 3706
CourtNew York Supreme Court
DecidedDecember 26, 1984
StatusPublished
Cited by6 cases

This text of 126 Misc. 2d 795 (Charles H. Greenthal Co. v. State Division of Housing & Community Renewal) 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
Charles H. Greenthal Co. v. State Division of Housing & Community Renewal, 126 Misc. 2d 795, 484 N.Y.S.2d 445, 1984 N.Y. Misc. LEXIS 3706 (N.Y. Super. Ct. 1984).

Opinion

OPINION OF THE COURT

Richard L. Price, J.

In this CPLR article 78 proceeding, petitioner Charles H. Greenthal Co., Inc., managing agent of the subject building, seeks to set aside amended order and opinion No. 17,467 issued by the New York City Conciliation and Appeals Board (CAB) establishing a tenant’s stabilized rent, on the grounds that it fails to comply with" the instructions and order issued by this [796]*796court when granting petitioner’s prior article 78 petition. Petitioner challenges the procedures upon which the CAB opinion is based and seeks an order from this court directing respondent New York State Division of Housing and Community Renewal, successor to the CAB, to recompute a lawful stabilized rent. For the reasons which follow, this article 78 petition is denied.

PRIOR PROCEEDINGS

Petitioner has been the managing agent of premises 61 Jane Street, New York, N. Y., since May 1979, two months after the current owner, Jane Street Associates, acquired title to the building. At the time, tenant Garcia was occupying apartment 18-M pursuant to a second renewal lease. In January 1980 tenant Garcia filed a complaint with the CAB alleging that his rent was excessive. (The lease in effect at that time showed a monthly rental of $492.87.) The CAB served upon petitioner a copy of the complaint of rent overcharge together with a demand for a complete rental history of the subject apartment as required by the Rent Stabilization Law of 1969 (RSL; Administrative Code of City of New York § YY51-1.0 et seq.) and the Code of the Rent Stabilization Association of New York City, Inc. § 42 (A) (Code), in order to determine whether the rent charged Garcia was a lawful stabilized rent. Petitioner’s response to the demand for rent data was that the owner had acquired the premises in 1979 and did not have rent records of the previous owner dating back to the base date. The CAB issued a conditional expulsion order expelling the subject apartment from the Rent Stabilization Association. Petitioner brought an article 78 petition seeking judicial review of CAB’s conditional expulsion order. In a judgment dated March 17, 1982, this court granted petitioner’s article 78 petition which annulled the order and remanded the matter to the CAB for further proceedings. This court directed the Board to give the petitioner every opportunity to comply with Code § 42 (A) or “demonstrate the impossibility of compliance”. (Matter of Greenthal & Co. v New York City Conciliation & Appeals Bd., Sup Ct, NY County, Mar. 17,1982, index No. 21894/81, Price, J.) The court noted the severity of the sanction imposed, namely, expulsion of the subject apartment from rent stabilization, and the good-faith showing of petitioner that it did not “intentionally default” in supplying prior leases. (Matter of Greenthal & Co. v New York City Conciliation & Appeals Bd., supra.)

The CAB appealed the court’s decision to the Appellate Division, First Department. (Matter of Greenthal & Co. v New York City Conciliation & Appeals Bd., 97 AD2d 681.) While the [797]*797appeal was pending, the CAB, on August 12, 1982, adopted the new procedure challenged herein, whereby a current rent roll rather than full rental records could be used as an alternative method to establish an initial stabilized rent. The alternative method permitted an owner of rent-stabilized apartments who could not supply rent history data to avoid expulsion.

When, on October 4, 1983, the Appellate Division unanimously affirmed the judgment of this court remanding the case back to the Board for further processing, the new CAB procedure was in place. The CAB used the alternative procedure to amend its original order and issued opinion No. 17,467, as amended, adjusting Garcia’s stabilized rent to $344.98.

Petitioner now brings this second article 78 petition seeking to set aside the amended CAB opinion or to have it redrafted so that it avoids the “same draconian result previously rejected by Justice Price.”

CONTENTIONS OF THE PARTIES

Petitioner contends that it is still improperly penalized for its inability to produce prior leases, and that the amended opinion does nothing to ameliorate the harsh results rejected by this court.

Petitioner alleges that the new procedure is arbitrary, capricious, and constitutes a taking of property without due process, specifically because it employs a three-prong test that uses the lowest of three calculation methods rather than, as petitioner would prefer, computing an average thereof.

Petitioner argues that the Statute of Limitations bars recovery of the alleged rent overcharge for the period accruing more than three years prior to the commencement of tenants’ complaint. It is further contended by petitioner that the CAB failed to recognize the installation of new windows in the apartment so that the cost could be reflected in an increased rent.

The respondent contends that the Board’s order based on the new procedure is supported by a rational basis and is therefore entitled to judicial affirmance. Respondent also argues that there is no Statute of Limitations for rent overcharge, relying for this proposition on RSL § YY51-6.0 (c) (3) and case law. In addition respondent alleges that the installation of new windows does not entitle the owner to an increase in rent since the owner failed to obtain the written consent of the tenant as required by Code § 20 (C) (1).

[798]*798ISSUE

The issues before this court are twofold:

(1) whether the CAB amended opinion carried out the intent of this court’s order; and

(2) whether the procedure used to establish tenant’s stabilized rent effectuates the intent of the Rent Stabilization Law and Code on its face and as applied to the facts of this case.

DISCUSSION

Petitioner’s first contention, that the CAB’s amended order did not reflect the intent of this court, is based upon petitioner’s incorrect reading of this court’s opinion as prohibiting the imposition of severe .penalties for the owner’s “innocent inability to produce prior leases”.

It is clear from the opinion that it was the penalty of expulsion, “the sanction imposed on petitioner” (Matter of Greenthal & Co. v New York City Conciliation & Appeals Bd., supra, at p 3) that this court rejected as not having “a reasonable basis in the record”. This court implicitly recognized the dilemma faced by the CAB, namely, how to induce compliance with Code § 42 (A) and still avoid the sanction of expulsion, which did not further the intent of rent stabilization. Thus, while this court “laud(ed) the respondents motives and appreciat(ed) the difficulties of its mission”, this court also noted the good-faith efforts of petitioner to obtain the rental data. It was stated moreover that petitioner should be given a hearing on remand to either “comply or demonstrate the impossibility of compliance” with Code § 42 (A) in order that petitioner may avoid default and expulsion from the Rent Stabilization Association. (Supra.)

The CAB itself resolved the dilemma by establishing an alternative method for determining a base rent, thereby avoiding the default of members who found that it was impossible to obtain rent history, either because of innocent loss or destruction, or the willful withholding of such records by prior owners.

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Bluebook (online)
126 Misc. 2d 795, 484 N.Y.S.2d 445, 1984 N.Y. Misc. LEXIS 3706, Counsel Stack Legal Research, https://law.counselstack.com/opinion/charles-h-greenthal-co-v-state-division-of-housing-community-renewal-nysupct-1984.