Opinion
February 15, 1996
Appeal from the Supreme Court, New York County (Lewis Friedman, J.).
Order of the same court and Justice, entered December 30, 1994, which, inter alia, denied the Sponsor's motion for reargument and renewal, unanimously affirmed, without costs.
In these consolidated actions under the Martin Act and CPLR article 78, the IAS Court properly determined that the declaratory ruling by HPD that the Sponsor was prohibited from terminating its tenants' rent stabilization status in the subject building by unilaterally waiving J-51 real property tax benefits and exemptions with respect to post-1985 tenancies was not arbitrary and capricious ( Matter of Hill v. Perales, 78 N.Y.2d 351, 354; Matter of Gramercy N. Assocs. v. Biderman, 169 A.D.2d 345, 351, lv denied 78 N.Y.2d 863). The contrary position would permit a sponsor to reap substantial tax benefits and then escape its concomitant obligations.
Nor did the IAS Court, in granting partial summary judgment in favor of the State, err in determining that the Sponsor had violated the Martin Act, and engaged in a course of conduct in violation of General Business Law § 352-eeee (4), by making material misstatements of fact and by failing to disclose material facts in the offering plan and the amendments thereto with respect to the J-51 tax benefit and rent regulatory status of the subject building ( Council for Owner Occupied Hous. v Abrams, 72 N.Y.2d 553, 557; 88 Assocs. v. Abrams, 159 A.D.2d 412, lv denied 76 N.Y.2d 702; Matter of 44 W. 96th St. Assocs. v Abrams, 85 A.D.2d 563, 564).
The record reveals that the Sponsor violated the Martin Act by failing to provide prospective purchasers with complete, accurate and available information to afford them with "an adequate basis upon which to found their judgment" (General Business Law § 352-e [b]), by falsely setting forth in the original offering plan the wrong date, June 30, 1989 rather than July 1, 1998, for the expiration of the J-51 tax benefits, and by failing to warn prospective purchasers in subsequent offering plans of any basis, other than mere speculation, for the Sponsor's unilateral waiver of the J-51 benefits, the risks involved, and that the Sponsor had commenced litigation against some of the tenants by reason of its position on the J-51 tax issue and the deregulation of certain units in the subject premises ( compare, Brockman v. Friedberg, 194 A.D.2d 393; Albert Apt. Corp. v. Corbo Co., 182 A.D.2d 500, lv dismissed 80 N.Y.2d 924).
The acts of the Sponsor in denying the tenants rent regulated leases and asserting that the premises were decontrolled also constituted violations of the anti-harassment provision of the Martin Act (General Business Law § 352-eeee), and Executive Law § 63 (12), which prohibit repeated illegal or fraudulent acts committed in the ordinary course of business ( State of New York v. 820 Assocs., 116 Misc.2d 901, affd 93 A.D.2d 1008).
The acceptance of the second and third amendments to the offering plan for filing by the Attorney-General did not constitute an approval of the contents of the plan since the filing requirement set forth in article 23-A of the General Business Law is merely for the purpose of affording potential investors and purchasers an adequate basis upon which to found their judgment and since nothing in that section obligates the Attorney-General, upon the filing of a plan, to launch a detailed investigation as to the truthfulness of all the representations made therein ( Matter of Whalen v. Lefkowitz, 36 N.Y.2d 75, 78).
We have considered appellants' remaining arguments and find them to be without merit.
Concur — Murphy, P.J., Wallach, Ross, Nardelli and Tom, JJ.