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Volume 7 - Opinions of Counsel SBEA No. 50

Opinions of Counsel index

Veterans exemption (ownership) (cooperative unit) – Real Property Tax Law, § 458:

A shareholder of a residential cooperative unit is not an owner of real property for purposes of the veterans exemption authorized by section 458 of the Real Property Tax Law.

We have been asked whether a veterans exemption may be granted to veterans who “own cooperatives” in this State.

Section 458 of the Real Property Tax Law provides a partial real property tax exemption for qualified veterans. Subdivision 1 of that section provides that real property owned by a veteran or certain other persons designated in that section may be entitled to an exemption to the extent (not to exceed $5,000) that certain moneys (“eligible funds”) were used in the purchase of real property.

In 5 Op.Counsel SBEA No. 84, we concluded that an owner of a condominium unit may receive a veterans exemption. However, it is also our opinion that no exemption may be granted in the case of cooperative apartment corporation, not the veteran. As is stated in Warren’s Weed on the New York Law of Real Property, 4th ed., Vol. 1A (1979) Cooperative Housing §1.02, “In the cooperative situation...the stockholder-cooperator does not receive fee ownership. He receives stock (personal property interest) and a lease (contract).”

Similarly, in Susskind v. 1136 Tenants Corporation, 43 Misc.2d 588, 251 N.Y.S.2d 321 (Civ.Ct., N.Y.C., 1964), the court stated:

In an apartment cooperative, then, the corporation is sole owner of the land and building [citation omitted]. It is the shares of the corporation that are sold, and, despite a vernacular use to the contrary, the apartment is not sold but leased under a so-called proprietary lease (People ex rel. McGoldrick v.Sterling, 283 App.Div. 88, 126 N.Y.S.2d 803). The lessee of the proprietary lease is in much the same position as any other tenant under the usual leasing arrangement. By the “proprietary lease” the shareholder-tenant acquires the right to occupy a particular apartment. He is only a lessee and his property rights are restricted [citation omitted]. (43 Misc.2d at 590, 251 N.Y.S.2d at 325 (emphasis added)).

Accordingly, the “owner” of shares in a cooperative apartment is not an owner of real property within the meaning of section 458 of the Real Property Tax Law, and no exemption may be granted pursuant to that section.

November 30, 1979

NOTE:  Construes law prior to L.1997, c.171.

Updated: