Opinion
Docket No. 71, Calendar No. 45,012.
Decided March 1, 1951.
Appeal from Wayne; Murphy (Thomas J.), J. Submitted January 5, 1951. (Docket No. 71, Calendar No. 45,012.) Decided March 1, 1951.
Action by Joseph Johnson against Harry Anderson to recover rents paid in excess of maximum allowed by housing expediter. Judgment for plaintiff. Defendant appeals. Affirmed.
Nathan E. Shur, for plaintiff.
M.D. Smilay, for defendant.
This is an appeal from judgment for plaintiff in his suit to recover rents paid in excess of the maximum fixed by the housing expediter under the housing and rent act of 1947, as amended ( 61 Stat 193). Were the housing accommodations in question "controlled" under the act and, hence, subject to the housing expediter's power to fix a maximum rental thereon? Section 202(c) reads, in part, as follows:
"The term `controlled housing accommodations' means housing accommodations in any defense-rental area, except that it does not include — * * * (3) any housing accommodations (A) * * * which are additional housing accommodations created by conversion on or after February 1, 1947."
Section 204(d) of the act provides:
"The housing expediter is authorized to issue such regulations and orders, consistent with the provisions of this title, as he may deem necessary to carry out the provisions of this section and section 202(c)."
Under that authority the housing expediter issued the following regulation, defining the term "conversion" as used in section 202(c):
"The word `conversion' means * * * (2) a structural change in a residential unit or units involving substantial alterations, or remodeling and resulting in the creation of additional housing accommodations." Controlled Housing Rent Regulation, § 825.1(b) (2) (ii).
This regulation is entirely consistent with the provisions of the act and valid thereunder. See Flynn v. Woods (CCA), 181 F.2d 867; Woods v. Ginocchio (CCA), 180 F.2d 484.
It is not disputed that the housing accommodations were within a defense-rental area. The controlling question is whether they came within the above quoted exception in section 202(c) as "additional housing accommodations created by conversion."
The facts are as follows: In November of 1947, defendant purchased premises containing 4 flats. Each was occupied by one family, contained a living room, dining room, kitchen, bathroom and 2 bedrooms, and yielded a monthly rental of $27.50 in accord with the registration filed with the housing expediter. Defendant, as he says, "took what he considered the necessary steps to convert the 4 five-room dwelling accommodations into 8 dwelling accommodations." Such steps consisted of the following: He removed 4 old furnaces, replacing them with 2 new ones; installed some lights on the outside of the building, using some new wiring; put in floor plugs in some of the rooms; decorated and put linoleum in the kitchens and bathrooms; furnished the bedrooms; installed new locks on the doors; furnished each kitchen with a refrigerator; painted the building; installed brackets and shades; changed fixtures; furnished heat, light and gas; and made other miscellaneous repairs. No partitions or additions were made in any of the rooms nor were any partitions removed. Two families were then placed in each of the 4 flats. Plaintiff occupied what had been the 2 bedrooms in the flat in question, while another tenant occupied what had been the living room and dining room, and the 2 tenants shared the kitchen and bathroom. Defendant charged each of the 8 tenants, including plaintiff, $17.50 per week, and later $16.50 per week, without filing the required registration statements. The housing expediter thereafter issued an order reducing the maximum rent of each of the 8 tenants to $7 per week, retroactive to July 1, 1947, and ordered the refund of the excess collected by defendant.
The trial court held that the "steps" taken by defendant did not, in the language of the quoted regulation, amount to a structural change nor constitute the creation of additional housing accommodations by conversion as contemplated and excepted by section 202(c). That holding we think correct. Changes of the character made by defendant were held not to be the creation of new housing accommodations in Woods v. MacNeil Bros. Co., 80 F. Supp. 920. As said in Flynn v. Woods, supra:
"Obviously, within the meaning of the housing and rent act and the applicable regulation, the mere division of one housing accommodation by makeshift or temporary means could not be said to constitute either substantial or structural alteration of the original housing unit `resulting in the creation of additional housing accommodations.' And this would be true even though the means adopted for alteration made it possible to put 2 tenants into possession of premises previously occupied by 1. We cannot suppose that the Congress intended to authorize decontrol by subterfuge."
It was competent for the housing expediter to make his order in this case retroactive and require the refund of excess rents theretofore collected. Controlled Housing Rent Regulation, § 825.5(d); Dean v. Woods (Emergency CCA), 169 F.2d 952.
Judgment affirmed, with costs to plaintiff.
REID, C.J., and BOYLES, NORTH, BUTZEL, CARR, BUSHNELL, and SHARPE, JJ., concurred.