| Matter of 160 E. 84th St. Assoc. LLC v New York State Div. of Hous.& Community Renewal |
| 2018 NY Slip Op 02433 [160 AD3d 474] |
| April 10, 2018 |
| Appellate Division, First Department |
[*1]
| In the Matter of 160 East 84th Street Associates LLC,Appellant-Respondent, v New York State Division of Housing and CommunityRenewal, Respondent-Appellant, and Sherry Sado,Intervenor-Respondent. |
Horing Welikson & Rosen, P.C., Williston Park (Niles C. Welikson of counsel), forappellant-respondent.
Mark F. Palomino, New York (Martin B. Schneider of counsel), forrespondent-appellant.
Sherry Sado, respondent pro se.
Order and judgment (one paper), Supreme Court, New York County (Barbara Jaffe, J.),entered March 1, 2017, granting the petition to modify an order of respondent New York StateDivision of Housing and Community Renewal (DHCR), issued February 23, 2016, to the extentof vacating the order and remanding the matter to DHCR to determine the base date rentconsistent with the standard set forth in Thornton v Baron (5 NY3d 175 [2005]), and denying DHCR'scross motion to remand the matter for the correction of mathematical errors therein, unanimouslyreversed, on the law, without costs, the petition denied, and the cross motion granted.
DHCR's use of a sampling method to determine the legal regulated rent on intervenor tenant'sapartment based on the average stabilized rents for studio apartments in the 2006 registration ofthe subject building is rationally based in the record and not arbitrary and capricious (see Matter of Tockwotten Assoc. v NewYork State Div. of Hous. & Community Renewal, 7 AD3d 453, 454 [1st Dept2004]). DHCR providently exercised its broad equity discretion to fashion an equitable solutionto the question of the appropriate rent for an apartment that was improperly treated asderegulated for years (see Rent Stabilization Code [RSC] [9 NYCRR]§ 2522.7; RSC former § 2522.6 [b] [2]; Matter of W 54-7 LLC v New York StateDiv. of Hous. & Community Renewal, 39 AD3d 312, 313 [1st Dept 2007]).
The market rent of $2,200 per month, established by lease, in effect on the "base date" (RSC§ 2520.6 [f] [1]) was the result of improper deregulation by petitioner and thus maynot be adopted as the proper base date rent (see 72A Realty Assoc. v Lucas, 101 AD3d 401 [1st Dept 2012]; Gordon v 305 Riverside Corp., 93AD3d 590, 592 [1st Dept 2012]). However, because petitioner's actions were based upon amistaken pre-Roberts v Tishman SpeyerProps., L.P. (13 NY3d 270 [2009]) belief that the apartment had been deregulated, andthere is no evidence of fraud, resort to the punitive default formula set forth in Thornton v Baron (5 NY3d 175[2005]) is inappropriate (see Taylor v72A Realty Assoc., L.P., 151 AD3d 95, 105 [1st Dept 2017]; Matter of Park v New York State Div. ofHous. & Community Renewal, 150 AD3d 105, 115 [1st Dept 2017], lvdismissed 30 NY3d 961 [2017]).
DHCR's order shows conflicting amounts for the legal regulated rent. Thus, we remand thematter to DHCR to correct the order. Concur—Renwick, J.P., Mazzarelli, Kahn, Gesmer,Kern, JJ.