Parkchester Management Corp. v. Rent Stabilization Ass'n of New York, Inc. , 56 A.D.2d 402 ( 1977 )

Per Curiam.

The leases in question were executed prior to May 29, 1974. They were renewal leases for a period of 31 months (extended by the Conciliation and Appeals Board [CAB] for an additional five-month period) and provided for graduated rent increases. CAB’s determination required that during the extension period the rent be reduced to the "averaged rent” in the lease and that any renewal commencing thereafter be based upon such reduced averaged rent. It does not clearly appear that the six leases involved herein contravened section 35B of the Rent Stabilization Association Code, Moreover, the Rent Stabilization Association (RSA), which adopted the section, later sought unsuccessfully to amend it to make clear that it was not intended to apply to leases executed prior to May 29, 1974. As construed and applied, section 35B exceeds the powers granted. The graduated increases were found not to be unconscionable, and the total rents when averaged were not unconscionable. However, it was concluded that an unconscionable result would be reached if the final rent established in the leases were used as the basis for computing the renewal leases. In our view this conclusion regarding the projected increases is unsupportable. Such rent would not appear to be unreasonably high nor at variance with comparable fair market standards. The result reached below disregards the apparent intent of RSA and constitutes an arbitrary application of rental adjustments to tenants already in occupancy whose leases were executed prior to July 1, 1974, the effective date of the Emergency Tenant Protection Act of 1974 (L 1974, ch 576, § 4). (Emergency Tenant Protection Act, §§ 4; 6, subd a.)

Judgment entered in the Supreme Court, New York County, December 17, 1976 (Hughes, J.) should be reversed on the law and the petition granted, without costs.