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In re 104 Bleecker Street Corp.

Supreme Court of New York, Appellate Division

June 8, 1954

In the Matter of 104 BLEECKER STREET CORPORATION, Appellant. FRED POTLOW, Doing Business as ACME HATTERS SUPPLY CO., et al., Respondents.

Page 258

APPEAL from an order of the Supreme Court at Special Term (BRISACH, J.), entered February 16, 1954, in New York County, fixing the fair and reasonable rent of commercial space occupied by tenants in premises known as 104-6 Bleecker Street in the city of New York.

COUNSEL

Lester W. Rubin for appellant.

Irving Seidman for respondents.

OPINION

DORE, J. P.

Landlord, petitioner, appeals from parts of a final order of Special Term after trial in a proceeding to fix the fair and reasonable rent of tenants-respondents in a six-story loft building owned by the landlord at 104-6 Bleecker Street, New York, New York, pursuant to section 4 of the Commercial Rent Law of the State of New York. Tenants-respondents did not appeal or file brief.

Page 259

The order granted a straight 10% increase in the rent of each of the tenants retroactive to the date of the petition, but in our opinion failed to grant the proper increases provided by law and supported by the landlord's evidence.

In the loft building in question there are ten tenants each occupying a single floor with the exception of the ground floor or street floor which is occupied by four tenants; one tenant rents the entire basement and subbasement. Of the six tenants-respondents, four occupy portions of the ground floor and two occupy respectively the fourth and fifth floors. The sixth floor is leased by the landlord under a lease that had not expired providing for a rent of $6,000 per annum and that tenant and floor is not involved in this proceeding. The landlord also settled with the second and third floor tenants and the basement tenant and they are not involved in the appeal.

Originally brought as an alternative proceeding under subdivision 2 of section 4, the landlord moved at trial to change this to a subdivision 1 proceeding. The court below decided the proceeding under the provisions of subdivision 1 and sufficient proof was presented to enable the decision to be made under that subdivision.

In our opinion the trial court committed serious pre-judicial errors, the corrections of which require substantial modification of the order appealed from under the Commercial Rent Law (L. 1945, ch. 3, § 4, subd. 1, as amd. by L. 1953, ch. 451, eff. April 2, 1953).

The assessed valuation of the property in effect at the time of the trial, for the year 1953-54 was $165,000, $43,000 of which was attributed to the land. Nevertheless, the trial court fixed the total valuation at $130,000, allowing $43,000 to the land and $87,000 to the building. That valuation was the assessment for the years 1949-50, three years prior to the date of this proceeding. The court should have adopted the current assessment of $165,000 as the presumption created by act was supported and not overcome by the proof. The court apparently took the lower figure because the building was over sixty years old. However, in such circumstance the court should not have reduced 'the latest completed assessment,' (§ 4) but rather should have reduced the rate of return from the presumptive 8% to 6%. ( Matter of Murphy [Blasio], 278 A.D. 814, 815.)

Finding that the rents received at the commencement of the proceeding were insufficient to provide a reasonable return, the trial court provided a ...


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