150 F.2d 411 | Emer. Ct. App. | 1945
This case involves a complaint against an order of the Regional Administrator of the Office of Price Administration reducing the rent of complainant’s apartment building in San Francisco, California. The building was not rented on March 1, 1942, the maximum rent date for the Area, nor during the two months ending on that date. Subsequent to the maximum rent date it was first rented on November 14, 1942, the agreed rental being $250 per month. Under Section 4(e) of the Regulation,
On June 11, 1943, the Area Rent Director notified complainant that it was proposed, under the provisions of Section 5 (c) (1) of the Regulation,
Throughout the proceedings before the Administrator and this Court complainant has attacxed the Administrator’s finding that $150 represented the rent prevailing on the maximum rent date for comparable accommodations. Complainant contends the Administrator considered buildings which were not fairly comparable to its building and failed to consider others which were. The Administrator considered evidence comparing the various properties with regard to location, condition, age, size and facilities available. He also considered the rents of the allegedly comparable accomodations which were in effect on the maximum rent date. However, the Administrator refused to consider evidence offered by complainant to the effect that on or about
For reasons more fully stated later in this opinion, we agree with the position of the Administrator that his obligation under the Emergency Price Control Act of 1942, 50 U.S.C.A.Appendix § 901 et seq., is not to fix for individual properties a rental which will yield a reasonable return on the value of the properties. Therefore, the facts offered by complainant to establish the reduced rent as unreasonable were properly rejected in the consideration by the Administrator.
As to the second point to which complainant maintains its evidence is relevant, it will be noted that the reduction of complainant’s rent was ordered pursuant to a provision of the Regulation which designates as the basis of adjustment the rent found by the Administrator to be generally prevailing in the Area for comparable housing accommodations on the maximum rent date. Seldom will two or more properties ever be found to be precisely the same in all respects. Therefore the prevailing rent for comparable accommodations can be ascertained only by consideration of innumerable differences which exist between properties, some tangible and some intangible. The Administrator’s task is to select accommodations most similar to the subject property and to evaluate the differences between those properties and between them and the subject property. In making his determination he should consider, as he did in the case before us, the physical characteristics of the buildings, their age, the kind and quality of building materials used, the sizes of rooms, the condition of repair, the locations and neighborhoods, and other such factors which experienced realtors are accustomed to considering in appraising real estate. Reputation, social attractiveness, exclusiveness of clientele and prestige are other considerations which may be strongly indicative of the rental values of properties.
Under these circumstances this case must be remanded to the Administrator with directions to consider the evidence which he rejected as immaterial. In such
Complainant claims it was injured by the refusal of the Regional Administrator to grant an oral hearing of its case. This Court will only interfere with a decision of the Administrator in the matter of granting or refusing an oral hearing where it plainly appears there has been an abuse of discretion. We find no such abuse in this case. Apparently all relevant facts in support of complainant’s case may be fully submitted in written form.
It is obvious that the views we have expressed, relating as they do solely to the consideration of evidence, do not finally dispose of this case on its merits. Therefore it is necessary that we consider in this opinion other arguments made by complainant which if adopted by the Court would require a decision in its favor.
Complainant contends that the Regulation does not apply to its building, because Section 1 (b) (4) makes it inapplicable to structures or premises wherein more than twenty-five rooms are rented by a lessee or sublessee.
The validity of the Regulation is questioned by complainant’s claim that because of the current lease on the property the effect of the Regulation and the order reducing its rent is to require complainant to let its property at a rental yielding less than a fair return on the value of the building, in violation of Section 4(d) of the Act
Complainant argues, finally, that it has been unable to accept payment of any rental since August 31, 1943, because the lessee has tendered the amount of $150 as payment in full for each month’s rent and acceptance thereof would, under California law, constitute a waiver by the landlord of its right to collect the original rent in the event the Administrator’s reduction was found improper. Complainant maintains the Regulation is invalid because of its failure to contain a provision protecting the landlord’s right to recover the original rent under these circumstances. But complainant’s right to recover the rent which it seeks is controlled by State law and the Administrator is not charged with a study of the laws of the several States to determine the effect upon individual contracting parties which may result from his control of rents or prices. If there is any defect in this regard in State laws, and as to this we make no intimation, the remedy is not by way of an administrative regulation, but rather by recourse to the State authorities.
This case will be remanded to the Administrator for further consideration of evidence along the lines set forth in the opinion.
Rent Regulation for Housing. 8 FR 7322. § 4 provides in part as follows:
“Maximum Rents. Maximum rents (unless and until changed by the Administrator as provided in section 5)’ shall be: * * *
“(e) First rent after effective date. For * * * (3) housing accommodations not rented at any time during the two months ending on the maximum rent date nor between that date and the effective date, the first rent for such accommodations after * * * the effective date * * *. The Administrator may order a decrease in the maximum rent as provided in section 5(c).”
§5: “Adjustments and other determinations. In the circumstances enumerated in this section, the Administrator may issue an order changing the maximum rents otherwise allowable * * * the adjustment [of rents established under Section 4(e)] shall be on the basis of the rent which the Administrator finds was generally prevailing in the defense-rental area for comparable housing accommodations on the maximum rent date * *
“(c) Grounds for decrease of maximum rent. The Administrator at any time, on his own initiative or on application of the tenant, may order a decrease of the maximum rent otherwise allowable, only on the grounds that:
“(1) Rent higher than rents generally prevailing. The maximum rent for housing accommodations under paragraph * * * (e) * * * of Section 4 is higher than the rent generally prevailing in the Defense-Rental Area for comparable housing accommodations on the maximum rent date.”
These elements have been recognized by the Administrator as pertinent to a determination of the rent prevailing for comparable accommodations. In the Matter of Madison, Inc., 2 Pike & Fischer Opin. & Dec. 3189 (1945).
§ 1(b) “Housing to which this regulation does not apply. This regulation does not apply to the following: * * * (4) Structures in which more than 25 rooms are rented or offered for rent. Entire structures or premises wherein more than 25 rooms are rented or offered for rent by any lessee, sublessee or other tenant of such entire structure or premises: Provided, that this regulation does apply to entire structures or premises wherein 25 or less rooms are rented or offered for rent by any lessee, sublessee or other tenant of such entire structure or premises, whether or not used by the lessee, sublessee or other tenant as a hotel or rooming house * *
Official Rent Interpretation 1 (b) (4) —II, Pike and Fischer O. P. A. Service 200:933.
§ 4(d) “Nothing in this Act shall be construed to require any person to sell any commodity or to offer any accommodations for rent.”
Chatlos v. Brown, Em.App., 1943, 136 F.2d 490.
Wilson v. Brown, Em.App., 1943, 137 F.2d 348.