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Volume 5 - Opinions of Counsel SBEA No. 24

Opinions of Counsel index

Nonprofit organizations exemption (moral or mental improvement) (Boy Scouts) (effect of easement) - Real Property Tax Law, § 421:

Real property owned by the Boy Scouts of America fails to meet the “exclusive use” requirement of section 421 for an exemption from real property taxation, where a private club is granted a “perpetual and exclusive right” to hunt, fish, sail, and the like, on the property.

We have received an inquiry concerning the taxable status of a parcel of property owned by a Council of the Boy Scouts of America, where the parcel is encumbered by hunting and fishing rights given to a private club in the 1890’s. The 1895 deed conveying such rights contains the following provision:

the said party of the first part does grant and convey unto the party of the second part and its assigns forever the perpetual and exclusive right to shoot, hunt and pursue game of all kinds in their respective persons, to take fish and to sail and maintain boats upon the waters included in the lands hereinafter described . . .

We have previously stated that land owned and used by the Boy Scouts of America is exempt from real property taxation pursuant to section 421 (i.e., §420) of the Real Property Tax Law to the extent that the land is actually and exclusively used for “scouting” purposes (see, 1 Op.Counsel SBEA No. 10). The question here is whether the aforementioned encumbrance prevents this property from meeting the “exclusive use” requirement of section 421.

The requirement for exemption under section 421 that the real property of a nonprofit corporation be used exclusively for the corporate purposes enumerated in its Certificate of Incorporation prohibits a use of the property which is not in furtherance of corporate purposes or which is a use not integral or fairly incidental to the corporation’s overall program. It is our opinion that the “perpetual and exclusive right” of a private club to “shoot, hunt and pursue game of all kinds in their respective seasons” and to “fish, ... sail and maintain boats upon the waters” directly contravenes the right of this Council, Boy Scouts of America to claim that it has an “exclusive use” of that property. Indeed in construing the language of the 1895 deed cited above, the Appellate Division, Third Department, found that both the Council and the club were entitled to common use of such rights “with reasonable respect and forebearance for each other’s rights in the exercise thereof” (Passaic Valley Council Boy Scouts of America v. Hartwood Syndicate, Inc., 46 App. Div.2d 247, 361 N.Y.S.2d 945, 948). Such a construction clearly suggests that the property is not being used exclusively for the purposes of the Boy Scouts, and therefore an exemption from real property taxation pursuant to section 421 would not be available.

However, pursuant to subdivision 2 of section 421, if the Council can show that the right of the private club to shoot, fish, hunt and the like is restricted to only a portion of the property, and the remainder of the property is used exclusively for Boy Scout purposes, then the remaining portion would be exempt.

Our opinion would not be changed by a finding that the right of the club to hunt, fish and the like, constituted an appurtenant easement and therefore would quite properly result in an increased assessment of the adjoining club property and a corresponding decrease in the assessment of the Boy Scout property (although we reach no conclusion on the question of whether this is an easement “appurtenant” or “in gross”). That is, while the value of property burdened by an easement appurtenant may be lessened by virtue thereof (see e.g., People ex rel. Cole v. Tax Commission of New York, 17 App. Div.2d 225, 233 N.Y.S.2d 501), the taxable status of such property will not be altered by the existence of such an easement. The questions of value and taxable status are not interchangeable. In this case the fact that the Boy Scout property may be diminished in value because of the existence of an appurtenant easement, does not alter our conclusion that in regard to taxable status, the use of the property by the private club clearly falls outside the bounds of section 421 of the Real Property Tax Law, and therefore that portion of the property subject to the easement of the club is taxable.

August 29, 1975

Updated: