Case Name: In the Matter of Linda Salvati et al., Appellants, v. William B. Eimicke, as Commissioner of the Division of Housing and Community Renewal, Office of Rent Administration, State of New York, Respondent. Barbara Mattura et al., Intervenors-Respondents; In the Matter of Michael Heller et al., Appellants, v. Manuel Mirabal, Individually and as Deputy Commissioner of the New York State Division of Housing and Community Renewal, et al., Respondents
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1988-12-20
Citations: 72 N.Y.2d 784
Docket Number: 
Parties: In the Matter of Linda Salvati et al., Appellants, v William B. Eimicke, as Commissioner of the Division of Housing and Community Renewal, Office of Rent Administration, State of New York, Respondent. Barbara Mattura et al., Intervenors-Respondents. In the Matter of Michael Heller et al., Appellants, v Manuel Mirabal, Individually and as Deputy Commissioner of the New York State Division of Housing and Community Renewal, et al., Respondents.
Judges: 
Reporter: New York Reports
Volume: 72
Pages: 784–793

Head Matter:
In the Matter of Linda Salvati et al., Appellants, v William B. Eimicke, as Commissioner of the Division of Housing and Community Renewal, Office of Rent Administration, State of New York, Respondent. Barbara Mattura et al., Intervenors-Respondents. In the Matter of Michael Heller et al., Appellants, v Manuel Mirabal, Individually and as Deputy Commissioner of the New York State Division of Housing and Community Renewal, et al., Respondents.
Argued November 16, 1988;
decided December 20, 1988
POINTS OF COUNSEL
John C. Schnaufer for appellants in the first above-entitled proceeding.
I. The Division of Housing and Community Renewal (DHCR) may not lawfully classify 184 and 186 Sixth Avenue as a "horizontal multiple dwelling” under the Rent Stabilization Law or the Emergency Tenant Protection Act. (Matter of Bambeck v State Div. of Hous. & Community Renewal, 129 AD2d 51, 70 NY2d 615; Matter of Krakower v State of New York, Div. of Hous. & Community Renewal, 137 AD2d 688; La Guardia v Cavanaugh, 53 NY2d 67; Roth v Michelson, 55 NY2d 278; Patrolmen’s Benevolent Assn. v City of New York, 41 NY2d 205; Matter of Washington Post Co. v New York State Ins. Dept., 61 NY2d 557; Matter of Jaffe v McGoldrick, 285 App Div 889; Matter of Mayfair-York Corp. v Weaver, 13 Misc 2d 829, 9 AD2d 613; Matter of Trump-Equitable Fifth Ave. Co. v Gliedman, 57 NY2d 588.) II. The DHCR may not establish guidelines or standards to determine when two or more buildings comprise a "horizontal multiple dwelling” without notice and without filing such guidelines or standards with the office of the Department of State. (People v Cull, 10 NY2d 123; Matter of Hill v New York State Teachers’ Retirement Sys., 97 Misc 2d 95; Two Assocs. v Brown, 127 AD2d 173; Matter of Nicholas v Kahn, 47 NY2d 24.) III. The DHCR order is not supported by substantial evidence and is affected by error of law. (300 Gramatan Ave. Assocs. v State Div. of Human Rights, 45 NY2d 176; Matter of Klein v Weaver, 7 Misc 2d 545; Matter of Goldstein v Gabel, 44 Misc 2d 20; Matter of Love Sec. Corp. v Berman, 38 AD2d 169; Matter of Bambeck v State Div. of Hous. & Community Renewal, 129 AD2d 51, 70 NY2d 615; Matter of Gottlieb v Mirabal, 123 AD2d 574, 69 NY2d 609; Matter of 11th Co. v Joy, 92 Misc 2d 664; Matter of Menoudakos v Berman, 32 AD2d 631; Matter of Coyle v Gabel, 21 NY2d 808; Matter of Edlu Custom Bldrs. v Young, 16 Misc 2d 376.)
Lawrence Alexander and Dennis B. Hasher for respondent in the first above-entitled proceeding.
I. Pursuant to the Emergency Tenant Protection Act and the Rent Stabilization Law, "horizontal multiple dwellings” need not be a "garden-type maisonette” to be subject to regulation. (Matter of 11th Co. v Joy, 92 Misc 2d 664; Matter of Lower Manhattan Loft Tenants v New York City Loft Bd., 66 NY2d 298; Matter of Bambeck v State Div. of Hous. & Community Renewal, 129 AD2d 51, 70 NY2d 615; Axelrod v Starr, 52 AD2d 232, 41 NY2d 942; La Guardia v Cavanaugh, 53 NY2d 67; Schick v Park Royal Assocs., 65 NY2d 1031; Lee v Gasoi, 113 Misc 2d 760, 126 Misc 2d 719; Mandel v Pitkowsky, 102 Misc 2d 478, 76 AD2d 807; Matter of Sommer v New York City Conciliation & Appeals Bd., 93 AD2d 481, 61 NY2d 973; Matter of Mounting & Finishing Co. v McGoldrick, 294 NY 104.) II. If the argument is properly before this court, respondent Division is not constitutionally required to file a rule defining standards for a "horizontal multiple dwelling”. (American Indus. Contr. Co. v Travelers Indem. Co., 54 AD2d 679, 42 NY2d 1041; Suffolk County Bldrs. Assn. v County of Suffolk, 46 NY2d 613; Village of Herkimer v Axelrod, 88 AD2d 704; Matter of Roman Catholic Diocese v New York State Dept. of Health, 66 NY2d 948; Matter of Stuyvesant Polyclinic v Axelrod, 117 AD2d 99; People v Cull, 10 NY2d 123.) III. The court below correctly affirmed the factual finding of the administrative agency that 184-186 Sixth Avenue is a horizontal multiple dwelling based on common facilities, ownership and management; in the alternative, the proceeding should be remitted to the Division for further fact finding and a new determination. (Matter of Bambeck v State Div. of Hous. & Community Renewal, 129 AD2d 51; Matter of Menoudakos v Berman, 32 AD2d 631, 25 NY2d 723; Matter of 11th Co. v Joy, 92 Misc 2d 664; Matter of Gottlieb v Mirabal, 123 AD2d 574, 69 NY2d 609; Matter of Love Sec. Corp. v Berman, 38 AD2d 169; Matter of Mid-State Mgt. Corp. v New York City Conciliation & Appeals Bd., 112 AD2d 72, 66 NY2d 1032; Towers Hotel Investors Corp. v Davis, 85 Misc 2d 451; Matter of Colton v Berman, 21 NY2d 322; Matter of First Terrace Gardens v McGoldrick, 1 NY2d 1.)
Thomas P. Kerrigan for intervenors-respondents in the first above-entitled proceeding.
I. DHCR did not err in ruling that buildings not meeting the statutory definition of "garden-type maisonette dwellings” may constitute horizontal multiple dwellings for purposes of rent stabilization coverage. (Matter of Menoudakos v Berman, 25 NY2d 723; Matter of Castleton Estates v Abrams, 1 AD2d 390, 2 AD2d 673; Matter of Cuccia v Weaver, 9 AD2d 689; Matter of Kahan v Weaver, 12 AD2d 641, 806; Matter of Amorelli v Berman, 19 NY2d 960; Matter of Coyle v Gabel, 21 NY2d 808; Matter of Bambeck v State Div. of Hous. & Community Renewal, 129 AD2d 51, 70 NY2d 615; Matter of Gottlieb v Mirabal, 123 AD2d 574, 69 NY2d 609; Matter of Davbern Assocs. v Joy, 97 AD2d 986, 61 NY2d 604; Matter of Love Sec. Corp. v Berman, 38 AD2d 169.) II. There is no basis to disturb DHCR’s determination that on the evidence of record the subject premises constitute a horizontal multiple dwelling. (Matter of Love Sec. Corp. v Berman, 38 AD2d 169; Matter of Colton v Berman, 21 NY2d 322; Matter of Mounting & Finishing Co. v McGoldrick, 294 NY 104; Matter of Menoudakos v Berman, 32 AD2d 631, 25 NY2d 723; Matter of Amorelli v Berman, 19 NY2d 960; Matter of 11th Co. v Joy, 92 Misc 2d 664; Matter of Goldstein v Gabel, 44 Misc 2d 20.) III. No constitutional right of landlords has been violated by the determination herein that the subject premises constitute a horizontal multiple dwelling. (Matter of Bambeck v State Div. of Hous. & Community Renewal, 129 AD2d 51; Eisen v Eastman, 421 F2d 560, 400 US 841; Teeval Co. v Stern, 301 NY 346, 340 US 876; Bucho Holding Co. v Temporary State Hous. Rent Commn., 11 NY2d 469; 378 Realty Corp. v New York City Rent & Rehabilitation Admin., 39 Misc 2d 30.)
Harris L. Present for appellants in the second above-entitled proceeding.
I. The Rent Commissioner’s application of different standards for the subject premises and those in the Menoudakos case are arbitrary and merit reversal of his decision. (Matter of Menoudakos v Berman, 59 Misc 2d 850; Matter of Johnson v Joy, 48 NY2d 689; Matter of Castleton Estates v Abrams, 1 AD2d 390, 2 AD2d 673; Matter of Exxon Corp. v Board of Stds. & Appeals, 128 AD2d 289.) II. The Rent Commissioner was legally wrong in holding that the subject premises is not a horizontal multiple dwelling because it is not a garden-type maisonette dwelling. III. It was arbitrary for the Commissioner not to have considered all of the material evidence in the record.
Lawrence Alexander, Dennis B. Hasher and Jan C. Rose for Manuel Mirabal and another, respondents in the second above-entitled proceeding.
The Deputy Commissioner properly found that the subject premises is not a horizontal multiple dwelling subject to the Emergency Tenant Protection Act and Rent Stabilization Law. His determination is therefore entitled to judicial affirmance. (Matter of 11th Co. v Joy, 92 Misc 2d 664; Matter of First Terrace Gardens v McGoldrick, 1 NY2d 1; Matter of Herzog v Joy, 74 AD2d 372, 53 NY2d 821; Hotel Armstrong v Temporary State Hous. Rent Commn., 11 AD2d 395; Matter of Johnson v Joy, 48 NY2d 689; Matter of Love Sec. Corp. v Berman, 38 AD2d 169; Matter of Castleton Estates v Abrams, 1 AD2d 390, 2 AD2d 673; Towers Hotel Investors Corp. v Davis, 85 Misc 2d 451; Matter of Sommer v New York City Conciliation & Appeals Bd., 93 AD2d 481, 61 NY2d 973; Matter of Gottlieb v Mirabal, 123 AD2d 574.)
Alan D. Kucker, Patrick K. Munson and Hal D. Weiner for Gansevoort Holding Corp., respondent in the second above-entitled proceeding.
I. There is no jurisdiction for DHCR to determine the applicability of the Rent Stabilization Law over adjoining buildings which each contain less than the statutory minimum for inclusion under the law. (La Guardia v Cavanaugh, 73 AD2d 1067, 53 NY2d 67; Meskill v Park Summit Realty Corp., 90 AD2d 410; Matter of Trump-Equitable Fifth Ave. Co. v Gliedman, 57 NY2d 588, 98 AD2d 487, 62 NY2d 539; Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451; Eaton v New York City Conciliation & Appeals Bd., 85 AD2d 581, 56 NY2d 340; Matter of Castleton Estates v Abrams, 1 AD2d 390, 2 AD2d 673; Matter of Amorelli v Berman, 19 NY2d 960; Matter of Coyle v Gabel, 26 AD2d 638, 21 NY2d 808; Sullivan v Brevard Assocs., 66 NY2d 489.) II. The DHCR determination that the subject buildings do not constitute one horizontal multiple dwelling subject to the Rent Stabilization Law is supported by a rational basis in the record and is entitled to judicial affirmance. (Matter of Howard v Wyman, 28 NY2d 434; Matter of Mounting & Finishing Co. v McGoldrick, 294 NY 104; Matter of Colgate-Palmolive-Peet Co. v Joseph, 308 NY 333; Udall v Tallman, 380 US 1; Power Reactor Co. v Electricians, 367 US 396; Matter of Castleton Estates v Abrams, 1 AD2d 390, 2 AD2d 673; Matter of Berger v Herman, 15 AD2d 792; Matter of Elman v Weaver, 9 AD2d 694; Matter of Cuccia v Weaver, 9 AD2d 689; Matter of Amorelli v Berman, 19 NY2d 960.)

Opinion:
OPINION OF THE COURT
Per Curiam.
The common issue presented on these appeals is whether horizontal multiple dwellings other than "garden-type maisonette complexes" located in the City of New York may properly be held to be subject to rent regulation as class A multiple dwellings containing six or more units pursuant to the Rent Stabilization Law (Administrative Code of City of New York § 26-504, 26-505) and the Emergency Tenant Protection Act of 1974 (L 1974, ch 576, § 4; McKinney's Uncons Laws of NY § 8621 et seq.).
Petitioners in Matter of Salvati are three sisters who own two adjoining buildings located at 184 and 186 Sixth Avenue. Respondent Division of Housing and Community Renewal (DHCR) determined that the buildings were subject to rent regulation as a horizontal multiple dwelling because they contained a total of more than six units and were serviced by a common boiler. Supreme Court vacated and annulled the agency's determination, concluding that in order for the buildings to be considered a horizontal multiple dwelling, they must "first be found to include structures which are garden-type maisonette dwelling complexes". Supreme Court also found that DHCR's determination was not supported by substantial evidence because the record contained no evidence of any common facilities other than the boiler adapted for use by the two buildings. The Appellate Division reversed on the law and reinstated the agency's determination (135 AD2d 424). Relying on its decision in Matter of Bambeck v State Div. of Hous. & Community Renewal (129 AD2d 51, lv denied 70 NY2d 615), but making no reference to Supreme Court's conclusion that the record was otherwise devoid of substantial evidence, the Appellate Division held that the inclusive rather than exclusive language of the Rent Stabilization Law (Administrative Code § 26-505) supported the agency's view that the statute was not limited to horizontal multiple dwellings constituting garden-type maisonette complexes.
In Matter of Heller, petitioners are tenants in three adjoining buildings under a common ownership. DHCR, relying upon Supreme Court's ruling in Matter of Salvati, determined that these three buildings did not constitute a regulated horizontal multiple dwelling because they were not a garden-type maisonette complex. Alternatively, the agency also found that although the buildings share common ownership and a common boiler, they are not a regulated horizontal multiple dwelling because they do not share sufficient other common facilities or services. Supreme Court's judgment confirming the agency's determination was affirmed by the Appellate Division.
On these appeals, DHCR now argues that the Rent Stabilization Law and the Emergency Tenant Protection Act apply to horizontal multiple dwellings other than garden-type maisonette complexes and that its factual determinations in each case are supported by substantial evidence, are not arbitrary or irrational and therefore should be upheld.
DHCR's interpretation of the statutes it administers, if not unreasonable or irrational, is entitled to deference (Matter of Colt Indus. v New York City Dept. of Fin., 66 NY2d 466, 471; Matter of New York Pub. Interest Research Group v New York State Dept. of Ins., 66 NY2d 444, 448; Matter of Howard v Wyman, 28 NY2d 434, 437-438; Matter of Mounting & Finishing Co. v McGoldrick, 294 NY 104, 108). The inclusive, rather than exclusive, language of the Rent Stabilization Law supports the agency's view that the statute applies to horizontal multiple dwellings other than garden-type maisonette complexes. The statute applies to "Class A multiple dwellings" (Administrative Code § 26-504) which are "deemed to include a multiple family garden-type maisonette complex containing six or more dwelling units having common facilities such as sewer line, water main, and heating plant, and operated as a unit under a common ownership on [May 6, 1969], notwithstanding that certificates of occupancy were issued for portions thereof as one- or two-family dwellings" (Administrative Code § 26-505 [emphasis added]). The Emergency Tenant Protection Act also supports the agency's view by providing for the regulation of all housing accommodations which it does not expressly except, including previously unregulated accommodations (McKinney's Uncons Laws of NY §8623, 8625). Although buildings containing fewer than six units are expressly excepted (McKinney's Uncons Laws of NY § 8625 [a] [4] [a]), horizontal multiple dwellings containing six or more units are not excepted and garden-type maisonette complexes having the common facilities listed in the statute are expressly included as multiple dwellings containing more than six units (McKinney's Uncons Laws of NY § 8625 [a] [4] [b]). Accordingly, DHCR's interpretation that the statutes apply to these buildings, which are not garden-type maisonette dwellings, is rational and should be upheld (Matter of Bambeck v State Div. of Hous. & Community Renewal, 129 AD2d, at 56, supra; Matter of Krakower v State Div. of Hous. & Community Renewal, 137 AD2d 688, 689).
In determining the existence of a regulated horizontal multiple dwelling the crucial factor, therefore, is not whether the housing accommodations are part of a "multiple family garden-type maisonette complex", but rather whether there are sufficient indicia of common facilities, common ownership, management and operation to warrant treating the housing as an integrated unit and multiple dwelling subject to regulation (Matter of Bambeck v State Div. of Hous. & Community Renewal, 129 AD2d, at 58, supra; Matter of Love Sec. Corp. v Berman, 38 AD2d 169, 170-171).
In Matter of Salvati, DHCR correctly considered whether the subject buildings constituted a regulated horizontal multiple dwelling even though they are not part of a garden-type maisonette complex. Supreme Court concluded however, and we agree, that DHCR's finding that the buildings constituted such a regulated horizontal multiple dwelling is not supported by substantial evidence since the only evidence of common facilities was a heating unit located in the basement of one building which serviced both buildings. Although DHCR argues to us that there are other indicia of commonality, such as a common fuel storage tank, a common hot water system, a common fire escape, a common roof and a common backyard, there are no such factual findings in the record.
By contrast in Matter of Heller, although DHCR incorrectly concluded that the Rent Stabilization Law applied only to garden-type maisonette complexes, the record contains substantial evidence supporting the agency's factual determination and alternate finding that the subject buildings, although under a single ownership, did not constitute a regulated horizontal multiple dwelling because they did not share sufficient common facilities or services — the only facility common to the three buildings was a shared heating system; the buildings had separate water and sewer mains, electric service and mail boxes.
Accordingly, the order of the Appellate Division in Matter of Salvati v Eimicke should be reversed, with costs, and the determination of the Division of Housing and Community Renewal annulled. The order of the Appellate Division in Matter of Heller v Mirabal should be affirmed, with costs.
Chief Judge Wachtler and Judges Simons, Kaye, Alexan der, Titone, Hancock, Jr., and Bellacosa concur in Per Curiam opinion.
In Matter of Salvati v Eimicke: Order reversed, with costs, and determination of the Division of Housing and Community Renewal annulled.
In Matter of Heller v Mirabal: Order affirmed, with costs.