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Volume 9 - Opinions of Counsel SBEA No. 40

Opinions of Counsel index

Assessment review, small claims (residential assessment ratio as proof) - RPTL, §§ 732, 738:

In a year in which an assessing unit implements a revaluation or update, the residential assessment ratio should not be accorded any probative value in the review of an assessment.

We have been asked whether the residential assessment ratio (RAR) should be deemed a reliable measure of the level of assessment in a year in which an assessing unit implements a revaluation or update. {*}

Sections 525(3) and 732(2) of the RPTL provide that the RAR may be considered by the board of assessment review and the small claims hearing officer in the review of an assessment of one-, two-, or three-family residential real property. However, neither section makes the RAR conclusive as proof of the prevailing level of assessment.

The State Board is required to determine annually the RAR for each assessing unit thirty days prior to the filing of the tentative assessment roll (RPTL, §738(1)). The RAR is a simple arithmetic computation derived by dividing the total assessments by total sales prices of all residential parcels in an assessing unit which were sold at arms-length between the filing of the latest final assessment roll and the filing of the preceding final assessment roll (RPTL, §738; 9 NYCRR 191-3). The determination of the number, classification and nature of the sales is based upon the sales information reported on EA-5217 transfer report forms (see, RPTL, §574; 9 NYCRR 191-2).

Thus, the 1991 RAR for an assessing unit which files its final assessment roll on April 1, is based on reports of residential sales which occurred between April 1, 1989 and March 31, 1990. The EA-5217 reports would indicate the assessed values of the parcels as of the dates of sale. Accordingly, if the assessing unit implemented a revaluation on its 1991 assessment roll, the RAR would not be a valid measure of the level of assessment on the 1991 assessment roll, because there has been a change in the level of assessment. The result is that the use of the RAR in reviewing assessments on the 1991 (revalued) assessment roll would be an inappropriate comparison. One court has concluded that the comparison of the ratio of pre-revaluation to post-revaluation assessments is of no probative value (Xerox Corp. v. Kuhn, 133 Misc.2d 1107, 509 N.Y.S.2d 741 (Sup.Ct., Monroe Co. 1986)).

Section 738(2) of the RPTL does authorize the adjustment of the RAR to account for a change in level of assessment of five percent or more. However, the State Board’s Rules provide that such adjustment must be made no later than 60 days prior to the filing of the tentative assessment roll (9 NYCRR 191-3.3(b)(2)). This is necessary in order that the RAR be available by the statutory deadline. The result is that only a change in level of assessment on the 1990 assessment roll would be accounted for in the 1991 RAR. A change in level of assessment on the 1991 assessment roll would not be accounted for until the 1992 RAR is established.

Accordingly, we do not believe that an RAR should be accorded any probative value in a year in which an assessing unit implements a revaluation or update.

April 24, 1991


{*}  The terms “revaluation” and “update” are defined in RPTL, §102(12-a) and (22), respectively.

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