Opinion
June 5, 1986
Appeal from the Supreme Court, New York County (Alvin F. Klein, J.).
In these article 78 proceedings which were consolidated for disposition below, orders and opinions of the Conciliation and Appeals Board, predecessor to the respondent State Division of Housing and Community Renewal (DHCR), declassifying buildings as hotels and directing rollbacks in rent, are challenged. In each case, the CAB found that the subject buildings did not actually supply hotel services to their tenants in violation of the Rent Stabilization Law and the Code of the Metropolitan Hotel Industry Stabilization Association, Inc. (Hotel Code). Accordingly, pursuant to Administrative Code of the City of New York § YY51-3.1 (b) (L 1983, ch 403, § 43), the CAB determined that the subject buildings were not hotels and reclassified them as apartment buildings. Moreover, since the CAB found that the owners of the buildings did not supply hotel services as of July 15, 1982, but collected the higher hotel guideline rent increases, the CAB rolled back the rents to those in effect on June 30, 1982, the date immediately prior thereto.
Special Term annulled that portion of the CAB orders which rolled back the rent to June 30, 1982 levels, finding that the CAB lacked the authority pursuant to Administrative Code § YY51-3.1 (b) to retroactively roll back the rents, relying on the Supreme Court ruling in Matter of Berkeley Kay Corp. v. New York City Conciliation Appeals Bd. (Index No. 3107/84, June 26, 1984).
However, as this court noted in reversing Matter of Berkeley Kay ( 113 A.D.2d 331), the CAB's power to adjust illegal rents is derived from its authority which existed prior to the enactment of the Omnibus Housing Act (L 1983, ch 403), and not from the prospective authority granted by that law. The rent rollbacks directed by the CAB solely enforced the terms of the amended Hotel Code (eff July 15, 1982) which mandated that the owner must actually provide hotel services to tenants, and which these owners failed to do. The fact that these owners charged rents pursuant to the higher hotel guidelines while not complying with the Hotel Code, as effective July 15, 1982, provides the rational basis for the retroactive rollback of rents to that date (Matter of Berkeley Kay Corp. v. New York City Conciliation Appeals Bd., 113 A.D.2d 331, supra).
We have examined the other points raised by the parties on these appeals and find them without merit.
Concur — Ross, J.P., Asch, Fein, Milonas and Ellerin, JJ.