The Second Department, reversing Supreme Court, determined an alleged zoning violation, for which plaintiff property owner had never been cited, did not justify automatic removal of plaintiff's tax-exempt status. Therefore, defendant-town's motion for summary judgment should not have been granted. The property had been tax-exempt for years as low-income property. The alleged zoning violation, i.e. that the plaintiff had more than two residential apartments, was not incompatible with the tax-exempt use. Therefore, the alleged zoning violation could not justify automatic removal of the tax-exempt status:
… [E]ven assuming that a zoning violation had been sufficiently established, the defendants have failed to articulate why such a violation, under the particular circumstances presented, should result in the loss of the plaintiff's tax exemption. Not all violations of law automatically result in the loss of a tax exemption … . “The concern of the taxing authority is not with the observance or non-observance by plaintiff of regulatory provisions relating to a specific building, but to the use to which the real property as an entity is or is intended to be devoted” … .
This is not a case in which the applicable zoning regulation is incompatible with the occupant's tax-exempt use … . In such cases, the rationale for denying the tax exemption is simple and clear, as compliance with both the tax-exempt use and the zoning regulation is impossible. Here, by contrast, the tax-exempt use of providing residential housing to low-income tenants is consonant with the property's permitted use as a two-family dwelling. Under these circumstances, the defendants have failed to establish, prima facie, that the nature of the alleged violation (i.e., that the plaintiff had more than two residential apartments) can serve as a valid legal basis for denying the property tax exemption … . Community Humanitarian Assn., Inc. v Town of Ramapo, 2016 NY Slip Op 01458, 2nd Dept 3-2-16
REAL PROPERTY TAX LAW (ALLEGED ZONING VIOLATION DID NOT WARRANT AUTOMATIC REMOVAL OF TAX-EXEMPT STATUS)/ZONING (ALLEGED ZONING VIOLATION DID NOT WARRANT AUTOMATIC REMOVAL OF TAX-EXEMPT STATUS)/TAX-EXEMPT STATUS (REAL PROPERTY, ALLEGED ZONING VIOLATION DID NOT WARRANT AUTOMATIC REMOVAL OF TAX-EXEMPT STATUS)