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Tax Lien Foreclosure Upheld Despite Alleged Lack of Notice

The Third Department determined a motion to vacate a tax lien foreclosure was properly denied in the face of claimed lack of notice, finding the motion untimely and finding the statutory notice requirements had been met and the owner had been afforded due process:

Respondent’s motion to vacate was untimely as it was brought more than one month after entry of the judgment of foreclosure (see RPTL 1131…).  Notably, “the statute of limitations set forth in RPTL 1131 applies even where, as here, the property owner asserts that he or she was not notified of the foreclosure proceeding”… . …

“[N]otice shall be deemed received unless both the certified mailing and the ordinary first class mailing are returned by the United States postal service within [45] days after being mailed,” and the foreclosing agent is required to seek an alternative mailing address for the property owner only when both such notices are returned (RPTL 1125 [1] [b] [i] …).  Accordingly, inasmuch as the notice sent by first class mail to respondent at the 8th Avenue address was not returned, such notice was deemed received …, and “petitioner was not obligated to take additional steps to notify respondent of the foreclosure proceeding”… .

…”[D]ue process does not require actual notice by the property owner, only reasonable efforts to provide notice under the circumstances” …, and petitioner discharged its obligations in this regard by fulfilling the requirements of RPTL 1125 … .  Finally, we note that”[o]wnership carries responsibilities” …, which includes an obligation to apprise the tax enforcing officer of a change in address (see RPTL 1125 [1] [d]…).  There is nothing in the record to suggest that respondent fulfilled that obligation here.  Simply put, “respondent was responsible for protecting his ownership interests and chargeable with notice that failure to pay his taxes could result in foreclosure” … . Matter of Foreclosure of Tax Liens by County of Sullivan…, 516658, 3rd Dept 11-27-13

 

Tax Exempt Status of Non-Profit Public Parking Lots Should Not Have Been Revoked

The Second Department ruled the tax exempt status of non-profit public parking lots should not have been revoked:

“The crucial issue in determining whether property is tax exempt pursuant to [RPTL 420-a] is whether the primary or principal use of the property is a tax-exempt purpose of its owner” … . The general rule is that the taxpayer bears the burden of proving that a property is tax exempt … . However, where, as here, a municipality seeks ” to withdraw a previously granted tax exemption, the municipality bears the burden of proving that the real property is subject to taxation'” … . * * *

Here, the respondents failed to meet their burden of proof for revocation of the tax exemption on the grounds that the petitioners’ activity did not conform to a charitable purpose within the meaning of RPTL 420-a. Absent a precise statutory definition of “charitable purpose,” courts have interpreted this category to include relief of poverty, advancement of governmental and municipal purposes, and other objectives that are beneficial to the community… . Matter of Greater Jamaica Dev Corp v NYC Tax Comm, 2013 NY Slip Op 07972, 2nd Dept 11-27-13

 

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Property Owned by Religious Group Entitled to Real Property Tax Exemption

The Third Department reversed Supreme Court and determined a religious group (Cybeline Revival) had demonstrated its property was used primarily for religious and charitable purposes, and, therefore, the group was entitled to a real property tax exemption:

…[P]etitioner met its burden to demonstrate that it uses the property primarily for its religious and charitable purposes … .  In accord with Supreme Court’s determination, respondents contend that the property was used primarily to provide cooperative housing because, in essence, the few adherents of the Cybeline Revival have in effect just continued the property’s former residential use… .  However, these arguments contend that there is some threshold amount of activity and public benefit that must be demonstrated, which confuses the standard that is simply whether the property was used primarily for religious and charitable purposes … .  The testimony established that the Cybeline Revival stresses communal living among its adherents, as well as providing hospitality and charity to those in need, and the members consider this property the home of their faith … .  They also conduct religious and charitable activities throughout the property on a regular basis.  Accordingly, petitioner has satisfied the legal requirements in order to receive a real property tax exemption for 2009, 2010 and 2011 … .  Matter of Maetreum of Cybele, Magna Mater Inc v McCoy…, 515598, 3rd Dept 11-21-13

 

“Assessor’s Formula” for Determining Property Tax Assessment for Golf Course Approved

In a full-fledged opinion by Justice Dickerson, the Second Department affirmed Supreme Court’s approach to the determination of real property tax assessments for a private, not-for-profit golf course.  The country club challenged the tax assessment imposed by the respondents (the board of assessors, et al). After a trial, Supreme Court adopted the assessment method used by the country club’s expert, called the “assessor’s formula,” rather than the respondents’ “triple net lease” method (which had previously been approved by the Second Department).  The opinion has an extensive description and discussion of the valuation techniques used by both experts and ultimately determined there is no reason to rigidly mandate that a particular valuation technique be used in all cases:

Contrary to the appellants’ contentions, we conclude that there is no basis to categorically preclude the application of this approach [the “assessor’s method] to the valuation of golf courses. Further, under the circumstances of this case, we conclude that the methodology employed by the Country Club yielded a fair market value, and we discern no reason to disturb the Supreme Court’s determination on appeal. Matter of Hempstead Country Club v Board of Assessors, 2013 NY Slip Op 07178, 2nd Dept 11-6-13

 

Failure to Serve Superintendent of Schools in Accordance with RPTL Required Dismissal of Property Tax Certiorari Proceeding

The Second Department determined Supreme Court properly vacated an order which directed the school district to repay back taxes for 2006 through 2010 on the ground that the superintendent of schools was not properly served in the tax certiorari proceeding:

It is undisputed that the petitioner failed to comply with the requirements of RPTL 708(3) which provide, in pertinent part, that in a tax certiorari proceeding, within 10 days after service upon the Assessor, “one copy of the petition and notice shall be mailed . . . to the superintendent of schools of any school district within which any of part of the real property on which the assessment to be reviewed is located.” RPTL 708(3) further provides that “[f]ailure to comply with the provisions of this section shall result in the dismissal of the petition, unless excused for good cause shown.” RPTL 708(3) requires a petitioner to show good cause to excuse its failure to notify the appropriate school district, and not merely to demonstrate the absence of prejudice to that school district … . Contrary to the petitioner’s contention, it failed to establish good cause for its failure to serve the petitions on the School District … . Accordingly, the Supreme Court providently exercised its discretion in denying the petitioner’s cross motion [for leave to make late service] (see CPLR 2004, 2005; RPTL 708[3]…). Matter of Cornwall Yacht Club, Inc. v Assessor, 2013 NY Slip Op 07039 [110 AD3d 1070], 2nd Dept 10-30-13

 

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Violation of Zoning Ordinance Precludes Property Tax Exemption

The Fourth Department affirmed the determination the petitioner (a hospital) was not entitled to a property tax exemption because the use of the property was in violation of a zoning law.  After noting that a proceeding pursuant to RPTL article 7, and not an Article 78 proceeding, is the proper vehicle for challenging a tax assessment, the Fourth Department wrote:

The fact that petitioner used the subject property for “hospital purposes” as that term is used in the RPTL is not contested (RPTL 420-a [5]). Nevertheless, a property owner who uses its property for exempt purposes in violation of an applicable zoning law is prohibited from receiving a tax exemption pursuant to RPTL 420-a… . Matter of Geneva General Hospital v Assessor of Town of Geneva…,559, 4th Dept 7-5-13

 

Petitioner Did Not Demonstrate Diminution in Value Related to Presence of Lead Paint Re: Tax Assessments

In affirming the tax assessment of residential properties in Syracuse, the Court of Appeals, in a full-fledged opinion by Judge Rivera, determined that the petitioner did not make a sufficient showing of the diminution of property values by the presence of lead paint:

In this Real Property Tax Law article 7 proceeding challenging the tax assessments of certain residential properties located in Syracuse, New York, petitioner contends that the trial court erred by failing to consider the impact of contamination — specifically, lead paint — upon the market value of the properties. We hold that petitioner failed to rebut the presumption of validity that attaches to the tax assessments of the properties by the City of Syracuse. That is, petitioner failed to proffer substantial evidence demonstrating a diminution in market value to his properties caused by the mere presence of lead paint. * * *

Where the trial court declined to credit petitioner’s appraisal reports, and the record does not demonstrate a diminution in market value caused by environmental contamination or hazards, petitioner failed to meet his burden and there is no basis to disturb the presumption of validity in the City’s favor. Matter of Roth v City of Syracuse, No 110, CtApp, 6-11-13

 

Presumption of Validity of Property Tax Assessment Rebutted

In affirming Supreme Court’s determination that petitioner’s Adirondack land had been over-valued for property tax purposes, the Third Department thoroughly examined the appraisal techniques employed and explained the review process as follows:

…[W]e  find that petitioner rebutted the presumption of validity of the disputed tax assessments, by presenting a detailed competent appraisal by a qualified appraiser, based upon accepted appraisal techniques, which constituted substantial evidence of overvaluation and presented a genuine dispute concerning valuation … .  Upon  review of Supreme  Court’s determination that petitioner met its burden of establishing, by a preponderance of the evidence, that parcels one  and  two  had  been  overvalued, we “weigh the entire record” … and  “review the trial court’s finding to determine whether it is supported by or against the weight of the evidence” … .Valuation of assessed property presents the court with a factual question…, and this Court   will defer to the trial court’s decision “unless such  finding is based upon [an] erroneous theory of law or [an] erroneous ruling in the admission or exclusion of evidence, or unless it appears that the court . . . has failed to give to conflicting evidence the relative weight which it should have and thus has arrived at a value which is excessive or inadequate” … . Matter of Adirondack Mountain Reserve v Board of Assessors of the Town of North Hudson, et al, 515190, 3rd Dept, 5-9-13

 

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Downtown Improvement/Sanitary District Charges; Downtown Special Assessment District Charges Not “Taxes” for Purposes of Empire-Zone Tax Credit

The question before the Third Department was whether petitioner’s limited liability company, which was a Qualified Empire Zone Enterprise (QEZE) and therefore was entitled to claim credit for “eligible real property taxes,” could also claim credit for a “downtown improvement tax.”  The issue was whether the “downtown improvement tax” was an “eligible real property tax.”  After extensive analysis of the meaning of “tax” in this context, the Third Department, in a full-fledged opinion by Justice McCarthy, determined it was not: “By long-standing precedent, statutory relief from real property ‘taxation’ . . . was held not to apply to taxes imposed for special benefits, typically in the form of special ad  valorem levies or special assessments” … .   Matter of Piccolo v NYS Tax Appeals Tribunal, 513539, 3rd Dept, 5-2-13

In a case which raised the same “tax versus ad valorem levy” issue in the QEZE context, the Third Department determined Sanitary District charges were not “taxes” entitled to credit.  Matter of Stevenson v NYS Tax Appeals Tribunal, 513540, 3rd Dept, 5-2-13

In another case with the same QEZE “tax versus ad valorem levy” issue, the Third Department determined that “Downtown Special Assessment District Charges” were not “taxes” entitled to credit.  Matter of Herrick v NYS Tax Appeals Tribunal, 513541, 3rd Dept, 5-2-13

 

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Notice of Tax Foreclosure Proceeding Deemed Sufficient

In finding that the notice requirements in a tax foreclosure proceeding had been met, the Third Department wrote:

Tax foreclosure proceedings enjoy a presumption of regularity, such that “[t]he tax debtor has the burden of affirmatively establishing a jurisdictional defect or invalidity in [such] proceedings” … .  In a tax foreclosure proceeding, each property owner is entitled to personal notice of the proceeding (see RPTL 1125 [1] [a]), which “shall be sent to each . . . party both by certified mail and ordinary first class mail” (RPTL 1125 [1] [b] [i]). Such “notice shall be deemed received unless both the certified mailing and the ordinary first class mailing are returned by the United States postal service within forty-five days after being mailed” … .Here, while the notice sent by certified mail to the Bayonne address was returned, there is no question that the notice sent by ordinary first class mail to respondent … at that address was not returned. Therefore, such notice was deemed received by respondent (see RPTL 1125 [1] [b] [i]…) . Matter of Foreclosure … 514737, 3rd Dept, 4-11-13

 

 

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