New-York tribune., 1921-10-30
Riverside Driue Rent Case
Upsets Realty Theories
Supreme Court Not Only Reduced Increase From 81
Per Cent to 35 Per Cent, but it Bettled the
Testimony of Property Experts 4

The decision of the Appellate Term
of the Supreme Court in reducing the
amount of the rent increase the Ala
bama Holding Company may collect
from the tenants of the apartment
house at $40 Riverside Drive has at
tracted wide interest in real estate.
The court not only cut the increase
from S2 per cent to 35 per cent above
last years rental schedule but disre-
garded the testimony given by experts
as to the value of the property as a
basis for arriving at reasonable
rental.
Justice Delahanty, who wrote the
majority opinion, said that the testi-
mony of the experts called by the AL
ALBANIA Holding Company to support
the rentals demanded was speculative
and of no value from a judicial stand
point. The estimates of expense Of
fered by the owners also were belittled
by the court Justice Delahanty said
that they were items of doubtful valid
ity
Justice Finch, who did not concur
with Justices Delahanty and BLUR, up
held the decision of the lower court,
which allowed an increase Of 80 per
cent, and was of the opinion that the
owner had proved that his rentals
were within the sphere Of reasonable
ness.
The decision upsets several conten-
tions that have been fostered for some
time by real estate men. One Of the
most disturbing setbacks from the
standpoint of the owner is the value
the court placed on the testimony of
experts, which has been regarded a
powerful aid in proving the reasona-
bleness of an owners rent schedule.
What Justice Delahanty Said
"In these actions to recover the rea-
sonable value of the apartment occu-
pied by defendants" Justice Delahanty
said in his opinion, "the landlords bill
of particulars covers expenses aggre-
eating $4,000. The bill is based in
part upon estimates rather than actual
experience and comprises a number of
items of doubtful validity.
"The learned judge below allowed an
average increase of 80 per cent of the
old rentals, paying the plaintiff, as we
figure it, a return of over 20 per cent
upon its equity.
"Appellants do not insist upon re-
versal of the judgments, but are will
ing to pay an increase of 35 per cent
which l believe would give the land
lord a clearly adequate return.
"Considerable stress was laid by the
of certain real estate experts. One of
them testified as to the present market
value of the property. He also testified
as to the market rental value, adding
that he thought the rent given by him
was reasonable. Considering the situa-
tion which the rent legislation was de-
signed to meet, it is difficult to under
stand exactly what weight may be &C
corded to testimony of this kind, as
suming it to be competent, since it
was not objected to.
"Another expert testified on cross
examination as follows:
"Q.-When you put down the prices
the figures you mean that is what
the traffic will bear at this time, that
is what you mean? A.-No, that is
not what 1 figure this.
"'The court: What do you mean
then? Al consider this as the fair
and reasonable value. What the
apartments bring is in according to
supply and demand. In bad times they
have to take less. In good times they
can get more, but these figures
figure on what the apartments are
worth reasonably.
"Q.-Regardless of the housing
emergency we have now? Al did
not take that into consideration. If I
had l would have made them much
higher
81 confess that testimony of this
character seems to me to be utterly
speculative and Of no value as the
basis of judicial decision
Judgments accordingly modified by
reducing the same to amounts wh ic h