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Fiesta Realty Corp. v. McGoldrick

Supreme Court of New York, Appellate Division

May 25, 1954

In the Matter of FIESTA REALTY CORP., Respondent,
v.
JOSEPH D. MCGOLDRICK, as State Rent Administrator, Appellant, and EUSMELIS SANTIAGO et al., Interveners, Appellants.

Page 552

[Copyrighted Material Omitted]

Page 553

APPEAL from an order of the Supreme Court at Special Term (SCHREIBER, J.), entered February 15, 1954, in New York County, in a proceeding under article 78 of the Civil Practice Act. The order vacated an order of the State Rent Administrator which held that certain premises were subject to rent control and which remanded the matter to the local rent administrator to fix the maximum rents.

COUNSEL

Beatrice Shainswit of counsel (Robert H. Schaffer, attorney), for Joseph D. McGoldrick, appellant.

George B. Tepper of counsel (Whitestone, Tepper & Harrow, attorneys), for respondent.

BREITEL, J.

In 1950 the landlord purchased an abandoned, boarded-up old-law tenement, which had been vacant and unused, except for two stores on the street floor, since 1943. It made certain restorations, the extent of which is disputed, and rented the apartments on the upper floors to foreign language-speaking tenants for whatever rents could be obtained. The question is whether the premises are subject to rent controls under the emergency statute (State Residential Rent Law, L. 1946, ch. 274, as amd.); or whether this has been a conversion from a non-housing to a housing use which is exempt from controls and regulation by the State Rent Administrator (ยง 2, subd. 2, par. [g], cl. [1]).

Special Term annulled the determination of the State agency and held that the premises were exempt from controls. It is our view that this was error, and that the premises in question are and remain subject to control by the State agency.

The building, as an old-law tenement, is not subject to the higher standards established for buildings constructed during later periods. It is a slum building in a slum area. In 1943 the building, at the time it was vacated, was declared unfit for human habitation by the city department of housing and buildings. The present landlord, after it purchased the premises in 1950, made certain repairs and restorations to the building. It thereupon obtained permission from the city department to rent the eight apartments in the building, and it also made application to the State Housing Rent Commission to have the apartments declared free from controls. The landlord's application for 'decontrol' was made in the course of a proceeding instituted by the local rent administrator, at the request of tenants, to bring the premises under control. The landlord offered proof of the repairs and restorations, and stated the cost of remodeling

Page 554

to be $23,431. An inspector for the State agency examined the building and reported that the repairs had been made. Thereupon a purported order of decontrol was issued by the State agency. Such order was issued and made effective as of June 25, 1951. In connection with that order no protest was filed.

In July, 1952, at the request of the tenants, new proceedings were instituted, again seeking to bring the premises under regulatory control. In August, 1952, the local rent administrator again made a finding that the accommodations were exempt. No protest was filed.

In April of 1953, proceedings were again instituted by the tenants to reopen the proceedings. This time the application was based on the ground that the repairs and restorations by the landlord had not been as extensive as claimed; that there had been no substantial renovation of the building; and that, therefore, the premises had never become eligible for 'decontrol'; and ...


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