Century Operating Corp. v. Prince , 411 N.Y.S.2d 313 ( 1978 )

Judgment, Supreme Court, New York County, entered June 13, 1978, which denied the petition and dismissed the proceedings, unanimously reversed, on the law, vacated, and the petition granted, without costs and without disbursements. This proceeding was brought on behalf of the owner of a building on the East Side of Manhattan to contest the determination of the Conciliation and Appeals Board (CAB) that the landlord could collect a certain rent for an apartment retroactive only to July 1, 1977 instead of retroactive to the start of the lease dated November 1, 1976. The tenant of the apartment filed a complaint with the CAB alleging rent overpayment on the ground that the former tenant of the apartment was paying much less and therefore the rent increases constituted overcharges. The petitioner landlord took over the building after the filing of the complaint when title was conveyed after foreclosure and a receivership. The CAB requested previous leases for the subject premises in order to determine the proper monthly rental, but the petitioner could not comply due to the change in ownership and inability to locate the requested documents. The CAB therefore accepted the tenant’s claim as to the prior situation and directed petitioner to refund overpayments. Thereafter, petitioner found the documents, which substantiated its position, and the CAB granted the increase but retroactive only to the month following production of the former tenant’s lease rather than retroactive to the present tenant’s lease date. Inasmuch as the petitioner landlord had a valid excuse for not having initially produced the old documents, and the CAB was accepting them and finding for the petitioner’s position as to proper rent, it was arbitrary and capricious not to permit retroactivity to the first day of the new lease. (See Matter of Colton v Berman, 21 NY2d 322, 329.) Concur— Kupferman, J. P., Birns, Lane, Sandler and Sullivan, JJ.