Volume 12 - Opinions of Counsel SBRPTS No. 33
Board of Assessment Review (condominium units); Condominium and Cooperatives (assessment review) - Real Property Law, § 339-y; Real Property Tax Law, § 524:
A condominium board of managers can file a single complaint form (RP-524) with a board of assessment review. However, reductions can only be made for units whose owners authorized the board of managers to act for them.
We have received several inquiries about the filing of a single complaint form with a municipal board of assessment review on behalf of the owners of units in a condominium development. Apparently there have been instances where it has been argued that a single complaint form can result in reductions for all owners, even those that have not authorized the board of managers to pursue administrative review. Subdivision three of section 524 of the Real Property Tax Law requires that a complaint must be made by the person whose property is assessed, or by some person authorized in writing by the complainant or his officer or agent to make such statement [i.e., complaint] who has knowledge on the facts therein.
The basis for the belief that authorizations are not required stems from the assessment provisions of subdivision one of section 339-y of the Real Property Law.
(a) With respect to all property submitted to the provisions of this article other than property which is the subject of a qualified leasehold condominium, each unit and its common interest, not including any personal property, shall be deemed to be a parcel and shall be subject to separate assessment and taxation by each assessing unit, school district, special district, county or other taxing unit, for all types of taxes authorized by law including but not limited to special ad valorem levies and special assessments, except that the foregoing shall not apply to a unit held under lease or sublease unless the declaration requires the unit owner to pay all taxes attributable to his unit. Neither the building, the property nor any of the common elements shall be deemed to be a parcel.
(b) In no event shall the aggregate of the assessment of the units plus their common interests exceed the total valuation of the property were the property assessed as a parcel.
Read together, these provisions mean that an entire development should be valued as a single entity and the total value then be apportioned to the individual units (see, 7 Op. Counsel SBEA No. 81). For example, assume a development has 20 units. The assessment roll would have 20 parcels, one for each unit, none for the common areas. If the value of the entire development were $1,000,000, that amount would be apportioned over the 20 units, $50,000 per unit if the units were all equal, in different amounts if they are not. The apportionment of interests in the common elements pursuant to section 339-i often provides the basis for the apportionment of value for assessment purposes.
We have been told that when a complaint form (RP 524) is filed with a municipal board of assessment review the complainant may argue that the determination of the total value made by the board, if lower than the basis for the tentative assessments of the units, should be apportioned over all the units and reductions in assessments be made for all units, both those that provided authorizations and those that didn’t.
This position ignores a basic tenet of the law governing assessment review. The board of assessment review only has jurisdiction to consider a validly filed complaint. Raer Corp. v. Board of Trustees, Village of Clifton Springs, 78 A.D. 2d 989, 433 N.Y.S.2d 926 (4th Dept. 1980), appeal dismissed, 53 N.Y.2d 602, 439 N.Y.S.2d 1026, 421 N.E.2d 853, appeal dismissed, 53 N.Y.2d 677, 438 N.Y.S.2d 677, 421 N.E.2d 123; see also, 10 Op. Counsel SBRPS No. 80. It also ignores the plain language of those provisions authorizing the board of managers to file a single complaint form. Subdivision four of section 339-y reads as follows:
4. The board of managers may act as an agent of each unit owner who has given his written authorization to seek administrative and judicial review of an assessment made in accordance with subdivision one of this section, pursuant to title one-A of article five and title one of article seven of the real property tax law. The board of managers may retain legal counsel on behalf of all unit owners for which it is acting as agent and to charge all such unit owners a pro rata share of expenses, disbursements and legal fees for which charges the board of managers shall have a lien pursuant to section three hundred thirty-nine-z (emphasis added).
Subdivision four of section 524 reads as follows:
4. In the case of real property assessed in accordance with subdivision one of section three hundred thirty-nine-y of the real property law, the board of managers acting as agent of one or more unit owners pursuant to subdivision four of such section may file a single complaint on behalf of all such unit owners (emphasis added).
Thus it is clear that the only unit owners whose assessment can be reduced by the board of assessment review are those who have authorized the board of managers to file a single complaint. While other owners can perceive the board of assessment review’s actions as implying that their assessments are too high, there is no authority for those assessments to be reduced without a complaint form for those units having been filed. This is no different from a single unit owner filing a complaint and receiving a reduction. While the implication may be that all other units should be reduced, there is no authority to make those reductions.
August 24, 2010