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Volume 10 - Opinions of Counsel SBRPS No. 107

Opinions of Counsel index

Residential improvements exemption (ownership) (transfer to owner’s heir or distributee) - General Construction Law, § 35; Real Property Tax Law, § 421-f:

A parcel receiving a residential improvements exemption continues to be eligible to receive such exemption when title to the property is transferred from the owner to one or more of his or her heirs or distributees.

Our opinion has been requested concerning the residential improvements exemption (Real Property Tax Law, §421-f), which provides an eight-year tapered exemption to capital improvements made to residential properties. An owner of property receiving the exemption wishes to transfer title thereto to one of his four children. The question is whether the exemption may be continued if the transfer occurs. Assuming the property is otherwise entitled to the exemption, in our opinion, it should be continued following the transfer.

At issue is subdivision six of section 421-f: “In the event that a building granted an exemption pursuant to this section ceases to be used primarily for residential purposes or title thereto is transferred to other than the heirs or distributees of the owner, the exemption granted pursuant to this section shall cease.” Since there are four children, the specific question is if the proposed transfer to but one of them violates the quoted statutory provision.

The terms “heirs” and “distributees” are not defined in the RPTL, though they have been defined in other contexts. “A distributee is a person entitled to take or share in the property of a decedent under the statutes governing descent and distribution” (Estates, Powers and Trusts Law, §1-2.5). “Whenever used in a statute or instrument, unless a contrary intention is expressed therein, the term ‘heirs’, ‘heirs at law’, ‘next of kin’ or any term of like import means the distributees, as defined in 1-2.5” (EPTL, §2-1.1).

Technically, however, no one is heir of a living person {1} (Heath v. Hewitt, 127 N.Y. 166, 27 N.E. 959 (1891)). Put otherwise, “A living person can never have any ‘heirs,’ only heirs presumptive” (38 NY Jur2d, Decedents’ Estates, §7, citing Re Bartlett’s Will, n.o.r., 76 N.Y.S.2d 247 (Surr.Ct. Broome Co., 1948), aff’d, 274 App.Div. 136, 80 N.Y.S.2d 375 (3d Dept. 1948)).

Given the foregoing, what did the Legislature intend in drafting section 421-f(6)?  There are several rules of statutory interpretation to be considered in attempting to answer this question.

First, section 421-f is a tax exemption statute, and tax exemption statutes are to be strictly construed against the grant of the exemption (Buffalo City Cemetery v. City of Buffalo, 46 N.Y. 506 (1871); McKinney’s Statutes, §294). However, such statutes may not be so strictly interpreted as to defeat legislative intent (People ex rel. Watchtower Bible and Tract Society, Inc. v. Haring, 8 N.Y.2d 350, 170 N.E.2d 677,207 N.Y.S.2d 673 (1960)).

Next, words in statutes are to be given their usual and commonly understood meanings (McKinney’s Statutes, §232). While the legislative memorandum in support of the bill enacted as section 421-f fails to address the provision in question, certainly, the Legislature was aware that intra-familial transfers of title to real property are common. Had the Legislature wished to truncate the exemption following any transfer of title, it clearly could have done so, but it did not. It would seem most likely that the Legislature intended the exemption to continue where the transfer is between an owner and his or her (presumptive or actual) heirs or distributees, but to terminate it upon other transfers.

Lastly, the fact that the statute’s drafters used the plural forms as opposed to the singular is not significant. “Words in the singular number include the plural, and in the plural number include the singular” (General Construction Law, §35; Johnson v. Joy, 48 N.Y.2d 689, 397 N.E.2d 746, 422 N.Y.S.2d 56 (1979); see, McKinney’s Statutes, §252). “This rule of construction ‘is applicable to every statute unless its general object, or the context of the language construed, or other provisions of law indicate that a different meaning or application was intended’” (People v. Buckley, 75 N.Y.2d 843, 846, 552 N.E.2d 160, 161, 552 N.Y.S.2d 912, 913 (1990), citing General Construction Law, §110).

Given these rules of construction, in our opinion, the Legislature did not intend to limit continuation of the exemption upon transfer of title to only those (perhaps rare) situations in which the grantor conveys title to all of his heirs or distributees. The transfer to one (or some) of the members of such class of person would also seem to satisfy the standard of section 421-f(6).

June 7, 2000


{1}  This is the legal maxim “nemo est haeres viventis.”

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