Actual Income Is Best Measure of Value of Income-Producing Property/Amount of Mortgage on Property Does Not Necessarily Fairly Reflect Value/Assessment Awarded Can Not Be Lower than that Requested in Article 7 Petition

The Third Department determined petitioner was entitled to a lower assessment of petitioner's property, which included a hotel. However, the Third Department held that the assessment could not be lower than that requested in the Article 7 petition (Supreme Court had imposed a lower assessment than that requested in the petition based upon the trial evidence). The Third Department noted that actual income is the best indicator of income-producing property and the amount of the mortgage on the property is not necessarily a fair measure of value. The relevant law was explained:

It is undisputed that petitioner met its initial burden to rebut the presumptive validity of the tax assessments and, accordingly, Supreme Court was required to “weigh the entire record, including evidence of claimed deficiencies in the assessment, to determine whether petitioner has established by a preponderance of the evidence that its property has been overvalued” … . “Where, as here, conflicting expert evidence is presented, we defer to the trial court's resolution of credibility issues, and consider 'whether the court's determination of the fair market value of the subject property is supported by or against the weight of the evidence'” … . Under settled law with respect to income-producing property, “actual income is the best indicator of value” … . * * *

While a court in determining fair market value may consider evidence of loans advanced on property during or near a particular tax status date when reviewing an assessment proceeding, such evidence standing alone is not entitled to [the] 'greatest weight' because the reasons behind the terms and amount of the loan may be uncertain and unrelated to market values” … . The mortgage was collateralized by land, buildings, furniture and equipment, with a limited personal guarantee, and, under the prevailing circumstances, did not necessarily fairly reflect the value of the property.

… We have previously stated that, “in areas outside New York City, RPTL 720 (1) (b) prohibits tax reductions beyond those requested in the petitions” … . * * * We are unpersuaded by petitioner's argument that it should be permitted to essentially eviscerate this statutory provision via a motion to amend its pleadings made after there has been a trial and decision on the merits of the petitions. Matter of Village Sq of Penna Inc v Board of Assessment Review of the Town of Colonie, 2014 NY Slip OP 09080, 3rd Dept 12-31-14