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Volume 4 - Opinions of Counsel SBEA No. 47

Opinions of Counsel index

Open space lands (assessment) (pledge of property for park purposes) - General Municipal Law, § 247:

Pledges to make a gift of property for park purposes create an inchoate interest in real property for the preservation of open space lands within the intent of section 247. Thus the assessments on such lands should reflect the fact that a purchaser would take title subject to the possibility that title would devolve upon the county for park purposes in the near future.

Our opinion has been requested as to the effect, if any, which a pledge to make a gift of property for park purposes has on the assessed value of the property.

According to the facts given, the owners of contiguous parcels of property located in a town have made written offers to convey to the county, free of charge, their parcels. The pledges have been recorded. The parcels would become part of a proposed park. The county is in the process of seeking state and federal aid to acquire other property for the proposed park. Should the aid be forthcoming, the county will accept the gifts of the parcels mentioned above and these parcels will constitute the county’s share of the cost of the park.

The County Attorney has stated in regard to these pledges: “we deem these pledges to be an encumbrance on the parcel involved to the extent that any purchaser or grantee thereof would take subject to the pledge to make the gift.”

Apparently, the assessed valuations of the pledged parcels on the assessment roll of the town completed on August 1, 1974 do not reflect any diminution in market value which might be caused by the encumbrances.

The question is: “What proportion, if any, of relief should be given because of the recorded pledges of the property owners to a county park?”

Under the in rem “whole property” concept of real property taxation which exists in New York State, all property is assessed without regard to restrictions or encumbrances which are personal to the owner and upon a tax sale the purchaser of the tax deed takes free and clear of the restrictions and encumbrances (People ex rel. Gale v. Tax Commission, 17 App.Div.2d 225, 233 N.Y.S.2d 501; Knickerbocker Village Inc. v Boyland, 17 N.Y.2d 476, 214 N.E.2d 162, 266 N.Y.S.2d 982). Thus, ordinarily an assessor would not have to consider an encumbrance such as the subject one.

However, we believe that the pledges create an interest in real property, inchoate though it may be, for the preservation of real property within the intendment of section 247 of the General Municipal Law. The relevant part of that section reads as follows:

§ 247. Acquisition of open spaces and areas
* * *
2. The acquisition of interests or rights in real property for the preservation of open spaces and areas shall constitute a public purpose for which public funds may be expended or advanced, and any county, city, town or village after due notice and a public hearing may acquire, by purchase, gift, grant, bequest, devise, lease or otherwise, the fee or any lesser interest, development right, easement, covenant, or other contractual right necessary to achieve the purposes of this chapter, to land within such municipality. . . .
3. After acquisition of any such interest pursuant to this act the valuation placed on such an open space or area for purposes of real estate taxation shall take into account and be limited by the limitation on future use of the land.

The concept adopted by section 247 is one that has long been recognized by case law regarding private easements appurtenant.

These easement interests have long been treated differently under New York law in the assessment of property for taxation purposes and the liability for the tax.

As respects them, the Court of Appeals, in Tax Lien Co. v. Schultze, 213 N.Y. 9, 106 N.E. 751, stated the law to be as follows:

When an easement is carved out of one property for the benefit of another the market value of the servient estate is thereby lessened, and that of the dominant increased practically by just the value of the easement; the respective tenements should therefore be assessed accordingly. . . .

The assessment of the lot described in the [tax lien foreclosure] judgment did not include the easements appurtenant to the adjoining real property. The assessment of the servient estate was subject to the easements included in the assessments of the dominant estate. As a necessary consequence it has been held that on the foreclosure of a tax lien and a sale of the premises pursuant to sections 1035-1039 of the Greater New York charter, private easements of light, air and access of adjoining owners over the land sold are not extinguished. If property rights which are excluded from an assessment are sold or extinguished by a tax sale, there would be a taking of property without the process of law. (Jackson v. Smith, 153 App. Div. 724; aff’d. on opinion below by decision handed down herewith, 213 N.Y. 630.)

The reason the treatment of private easements in a tax sale is pertinent to the question asked above is that under existing law a tax deed would not cut off the encumbrances claimed by the county.

Section 1020 of the Real Property Tax Law provides that tax deeds convey title subject to “claims of the county” for “encumbrances.” The claims of the county under the pledges are encumbrances. “Any right existing in another to use the land or whereby the owner is restricted is an incumbrance within the legal meaning of the term” (Foster v. Scott, 136 N.Y. 577, 582, 32 N.E. 976). If one reverses the reasoning applied to easements appurtenant (that they are not destroyed by a tax sale because they are not in the assessment), the argument would be that the inchoate rights of the county to title upon satisfaction of certain conditions should not be included in the assessments of the encumbered parcels since these rights would not be extinguished by the tax sale of the encumbered parcels.

It is our opinion, therefore, that the interests of the county should not be included in the assessments. This means that the assessments of the parcels should include only the remaining interest of the present owners. Therefore, in legal effect, the valuation placed upon the encumbered parcels for taxation purposes should take into account the fact that a purchaser would take title subject to the possibility that in the near future title would devolve on the county for park use. Meanwhile the parcels cannot be developed in any manner inconsistent with future park use. On the other hand, since the interest of the county in the parcels is inchoate, it is obvious that the parcels would have more than nominal value.

December 2, 1974

Updated: