27 Misc. 2d 319 | N.Y. Sup. Ct. | 1960
Petition to review the determination of the Administrator denying petitioner’s applications for rent increases based upon the statutory 6% formula incorporated in subdivision 5 of section 33 of the State Rent and Eviction Regulations.
It appears that under the “ cut off date ” procedure instituted by the Legislature, orders pursuant to applications such as those made herein, if not issued within two months after the filing of such application, become effective retroactively as of the date which is two months subsequent to the filing. (Emergency Housing Rent Control Law [L. 1946, ch. 274, as amd.], § 4, subd. 6.) Consequently, the commission’s Manual of Accounting Procedures and Practice was revised prohibiting landlords from supplying any information concerning increased expenses or changes in the rental income after the aforesaid two months’ period has elapsed. (Manual of Accounting Procedures and Practices, Operational Bulletin 20.)
Pursuant to legislative intent each owner of housing accommodations is entitled to a minimum net annual yield of 6% on the valuation of the property (Emergency Housing Rent Control Law, § 4, subd. 4, par. [a], cl. [1]). In order to facilitate processing of applications filed under this section, accounting practices were adopted by the Rent Commission with the purpose of obviating “ the necessity of making an increased number of minute calculations on the basis of facts occurring after the issuance of the order by the local rent office.” (Matter of 340 East 57th St. Corp. v. Weaver, 3 Misc 2d 356, 363, affd. 2 A D 2d 678.) However, where it appears that unusual circumstances are present whereby post cut-off date factors so substantial^ alter the outcome that they can no longer be characterized as ‘ ‘ minute calculations ’ ’, the failure of the Administrator to take them into account would be contrary to the purpose and spirit of the rent control laws.
In the case at bar, after it was determined that the absence from the market of the two rental units presented a distorted picture of the true financial position of the petitioner, it was entirely reasonable and proper for the commission to make allowances therefor. Based upon these allowances it was found that the minimum return to which by law the petitioner was entitled was exceeded. It cannot be said that under these circumstances such determination was arbitrary, capricious or had no basis in reason.
With respect to repairs, maintenance, replacements and improvements, thé Administrator’s findings are sufficiently supported, there being no showing that they are contrary to standard accounting procedures or unjust in the circumstances.
It is necessary also to take into consideration that although the return which the Administrator allowed to the petitioner is based upon an assessed value of $15,000, the petitioner recently purchased the property for $7,500 and expended in total repairs, including new fixtures, renovations, “ deferred maintenance and