In a proceeding pursuant to CPLR article 78 to review a determination of the New York State Division of Housing and Community Renewal, dated December 2, 2003, which denied a petition for administrative review and confirmed a determination of the Rent Administrator, dated January 24, 2003, denying the petitioners’ applications to adjust certain initial legal regulated rents based on the presence of unique or peculiar circumstances, the New York State Division of Housing and Community Renewal appeals from a judgment of the Supreme Court, Nassau County (Lally, J.), entered July 29, 2004, which granted the petition, annulled the determination, and remitted the matter to the New York State Division of Housing and Community Renewal to determine the applications on the merits pursuant to Emergency Tenant Protection Regulations (9 NYCRR) § 2502.3 (b).
Ordered that the judgment is affirmed, with costs.
The Supreme Court properly granted the petition to annul, as arbitrary and capricious and without a rational basis in the rec*938ord and in the law, a determination of the New York State Division of Housing and Community Renewal (hereinafter the DHCR) denying the petitioners’ applications to adjust certain initial legal regulated rents pursuant to Emergency Tenant Protection Regulations (9 NYCRR) § 2502.3 (b) based on the presence of unique or peculiar circumstances, and remitted the matter to the DHCR for a determination of the applications on the merits (see CPLR 7803 [3]; Matter of KSLM-Columbus Apts., Inc. v New York State Div. of Hous. & Community Renewal, 5 NY3d 303, 312 [2005]; Matter of Marciano v Roldan, 294 AD2d 440 [2002]; cf. Matter of Melendez v New York State Div. of Hous. & Community Renewal, 304 AD2d 580). Florio, J.P., Ritter, Goldstein and Lifson, JJ., concur.