The petitioner and other tenants in controlled housing appeal from an order sustaining a rent increase granted by the State Rent Administrator under the 6% net annual return formula.
The appellants assign several grounds of alleged error, none of which seem tenable except one. As to that we agree that the procedure followed here is arbitrary.
In proceedings of the present nature, the accounting section of the commission examines and audits the landlord’s books to ascertain the income and expenses of the building.
The tenants are not permitted to examine the landlord’s records, and we agree that this is proper, but we think that the tenants should have the right to interrogate the auditor as to the methods pursued in his examination, to ascertain what he did to verify or examine vouchers as to items posted, whether all expenses were audited or just a sample audit conducted, to inquire as to what investigation he made in respect to discounts or rebating and checking, if any, of costs against the market, and any other matters which the Administrator or the hearing deputy would find relevant as to the scope and correctness of the audit. Of course, the hearing officer could keep the examination within reasonable bounds, and the exercise of his judgment in these matters would be discretionary.
For the purpose of permitting such examination we remit the matter for further consideration.
The order should be reversed, motion granted and matter remitted for purposes indicated.
Peck, P. J., Cohn, Callahan, Breitel and Bastow, JJ., concur.
Order unanimously reversed, with $20 costs and disbursements to the appellant, the motion granted and the matter remitted to the State Rent Administrator for further consideration in accordance with the opinion herein. Settle order on notice.