16 N.Y.2d 521 (1965)

In rent control cases, administrators must consider expert testimony and evidence of comparable properties when determining fair market value.

Summary

East 53rd Inc. challenged the Rent Administrator’s denial of its request for a rent increase. The Court of Appeals held that the Administrator erred by not considering the testimony of the petitioner’s experts and evidence of comparable property sales and listings. The court emphasized the importance of a complete record for a fair determination under the state rent control statute and regulations. The case underscores the necessity for rent administrators to consider all relevant evidence, including expert opinions and comparable sales data, to ensure a just and informed decision.

Facts

East 53rd Inc., a landlord, sought a rent increase from the City Rent and Rehabilitation Administrator, Hortense W. Gabel. The Administrator denied the request. East 53rd Inc. presented expert testimony and evidence of comparable property sales to support their claim for a rent increase. The Rent Administrator did not consider this evidence.

Procedural History

East 53rd Inc. initially brought the case before the Special Term, which ruled in their favor. The Appellate Division reversed the Special Term’s decision. East 53rd Inc. appealed to the Court of Appeals.

Issue(s)

Whether the Rent Administrator erred by failing to consider expert testimony and evidence of comparable property in determining a fair rent increase.

Holding

Yes, because the Rent Administrator must consider all relevant evidence, including expert testimony and comparable sales data, to establish a complete record and ensure a fair determination under the state rent control statute and regulations.

Court’s Reasoning

The Court of Appeals reversed the Appellate Division’s order and reinstated the Special Term’s order, remanding the proceeding to the Administrator. The court held that the Administrator must hear the testimony of the petitioner’s experts and consider evidence of listings and sales of comparable property to complete the record. The court cited several prior cases, including Matter of Schreiber v. McGoldrick, Levy v. 1165 Park Ave. Corp., and Matter of Neulist v. Weaver, to support its decision. The court emphasized that failing to consider such evidence constitutes a failure to adhere to established principles of rent control administration. The dissent argued that the cited cases were not controlling and would have affirmed the Appellate Division’s order.