New York Law Review

Tag: RPTL Article 7

  • Matter of French Oaks Condominium v. Town of Amherst, 23 N.Y.3d 170 (2014): Rebutting Presumption of Validity in Property Tax Assessment

    Matter of French Oaks Condominium v. Town of Amherst, 23 N.Y.3d 170 (2014)

    A taxpayer challenging a property tax assessment must present substantial evidence, based on sound theory and objective data, to rebut the presumption of validity that attaches to the taxing authority’s valuation.

    Summary

    The French Oaks Condominium challenged the Town of Amherst’s property tax assessment, arguing it was excessive. The Board’s appraiser used an income capitalization method but relied on “forecast financials” for comparable properties without providing verifiable data. The referee accepted the Board’s capitalization rate, but the Court of Appeals reversed, holding that the Board failed to rebut the presumption of validity because its appraiser’s capitalization rate lacked objective support. This case underscores the need for appraisals to be supported by verifiable data and not merely the appraiser’s personal knowledge.

    Facts

    The French Oaks Condominium, a 39-unit residential complex, was assessed at $5,176,000 by the Town of Amherst for the 2009-2010 tax year. The Condominium’s Board of Managers initiated a Real Property Tax Law (RPTL) article 7 proceeding, claiming the assessment was too high. Their appraisal report valued the property at $4,265,000, using an income capitalization method, treating the units as rental properties. The appraiser identified four comparable apartment complexes to determine a capitalization rate but relied on “forecast financials” for income and expenses, lacking verifiable documentation.

    Procedural History

    The Board initiated an RPTL article 7 proceeding. A referee held a hearing and initially denied the Town’s motion to dismiss, finding the Board rebutted the presumption of validity. Supreme Court ordered the Town to amend its tax roll. The Appellate Division affirmed. Two justices dissented. The Town appealed to the New York Court of Appeals based on the two-justice dissent.

    Issue(s)

    Whether the Board presented substantial evidence to rebut the presumption of validity that attaches to the Town’s property tax assessment.

    Holding

    No, because the Board’s appraisal, specifically the capitalization rate derived from comparable properties, lacked sufficient objective data to substantiate the appraiser’s calculations, and therefore failed to rebut the presumption of validity.

    Court’s Reasoning

    The Court emphasized that a property tax assessment carries a presumption of validity, and the taxpayer bears the initial burden of presenting substantial evidence of overvaluation. This evidence must demonstrate a valid and credible dispute regarding valuation and be based on sound theory and objective data. The court cited 22 NYCRR 202.59(g)(2), requiring appraisals to include facts, figures, and calculations supporting the appraiser’s conclusions, set forth with sufficient particularity. The Court found that the Board’s appraiser failed to provide verifiable data for the income and expense figures used to calculate the capitalization rate. The appraiser’s reliance on “forecast financials” and “personal exposure” without supporting documentation was insufficient. The Court stated: “[A]n appraiser cannot simply list financial figures of comparable properties in his or her appraisal report that are derived from alleged personal knowledge; he or she must subsequently ‘prove’ those figures to be facts at trial.” Because the capitalization rate was not adequately supported, the Board failed to rebut the presumption that the tax assessment was valid. The court emphasized that while the substantial evidence standard is not a heavy one, “the documentary and testimonial evidence proffered by petitioner [must be] based on sound theory and objective data”.

  • Matter of Feldman v. Board of Assessment Review, 12 N.Y.3d 176 (2009): Technical Defects in Tax Certiorari Proceedings

    Matter of Feldman v. Board of Assessment Review, 12 N.Y.3d 176 (2009)

    In Real Property Tax Law Article 7 proceedings, the omission of a return date from a notice of petition does not automatically deprive the court of personal jurisdiction, especially where the assessing authority suffers no prejudice from the omission.

    Summary

    Feldman, a property owner, initiated a tax certiorari proceeding but left the return date blank on the notice of petition, following instructions from the County Clerk due to a judicial vacancy. The Board of Assessment Review moved to dismiss for lack of personal jurisdiction. The Court of Appeals reversed the Appellate Division’s dismissal, holding that the omission of the return date was a technical defect that did not deprive the court of personal jurisdiction because the Board demonstrated no prejudice. The court emphasized the remedial nature of tax assessment review and the absence of prejudice to the Board, aligning with the principle that substance should prevail over form.

    Facts

    Petitioner Feldman challenged his property tax assessment by filing a petition and notice of petition with the Board of Assessment Review. The notice of petition lacked a return date. Feldman stated he was instructed by the Ontario County Clerk to leave the date blank due to a judicial vacancy. The Clerk informed him the court would set the return date and notify all parties once the vacancy was filled. The Town acknowledged being informed of the scheduled return date by the Clerk.

    Procedural History

    Supreme Court denied the Board’s motion to dismiss. The Appellate Division reversed, granting the Board’s motion and dismissing the petition. The Court of Appeals granted Feldman’s motion for leave to appeal.

    Issue(s)

    Whether the failure to include a return date in a notice of petition in an RPTL Article 7 proceeding deprives the court of personal jurisdiction over the respondent taxing authority.

    Holding

    No, because the omission of the return date in the notice of petition, under the specific circumstances of this case and without demonstrable prejudice to the respondent, constitutes a technical defect that does not deprive the court of personal jurisdiction in an RPTL Article 7 proceeding.

    Court’s Reasoning

    The Court of Appeals reasoned that while CPLR 403(a) requires a notice of petition to specify the hearing’s time and place, strict compliance is not always necessary, especially in RPTL Article 7 proceedings. The court highlighted the practical difficulty of setting a return date when a judge has not yet been assigned, coupled with the short statute of limitations in RPTL Article 7. Drawing upon Matter of Great E. Mall v Condon, 36 NY2d 544 (1975), the court reiterated that tax assessment proceedings are remedial and should be liberally construed to ensure taxpayers can have their assessments reviewed. The court emphasized that technical defects should not defeat meritorious claims, especially when the respondent suffers no prejudice. The Board failed to demonstrate any prejudice resulting from the missing return date. The purpose of the return date—to notify the respondent—is less critical in RPTL Article 7 proceedings, where the allegations in the petition are deemed denied if no answer is served (RPTL 712[1]). The court distinguished the case from situations where a fictitious return date was used, finding it incongruous to approve a fictitious date but condemn an absent one, referencing Matter of National Gypsum Co., Inc. v Assessor of Town of Tonawanda, 4 NY3d 680 (2005). The Court concluded that requiring strict compliance with CPLR 403(a) would unfairly prevent petitioners from challenging tax assessments through no fault of their own. The court explicitly limited its holding to RPTL Article 7 proceedings where the petitioner cannot designate a return date. The court noted, “Critical to the analysis in Great E. Mall was our long-standing view that the law regarding real property assessment proceedings is ‘remedial in character and should be liberally construed to the end that the taxpayer’s right to have his assessment reviewed should not be defeated by a technicality’ (36 NY2d at 548 [internal quotation marks omitted], quoting People ex rel. New York City Omnibus Corp. v Miller, 282 NY 5, 9 [1939]).”

  • National Gypsum Co. v. Assessor of Town of Tonawanda, 1 N.Y.3d 682 (2004): Validity of Notice of Petition in Tax Certiorari Proceedings

    National Gypsum Co. v. Assessor of Town of Tonawanda, 1 N.Y.3d 682 (2004)

    A notice of petition in a tax certiorari proceeding is not jurisdictionally defective if the petitioner includes a return date that is later changed by court personnel, provided the petitioner initially complied with statutory notice requirements.

    Summary

    National Gypsum Co. filed a tax certiorari proceeding, including a notice of petition with a return date. The court clerk subsequently changed the return date. The Town of Tonawanda moved to dismiss, arguing the original notice was defective because it contained a ‘fictitious’ hearing date, failing to comply with CPLR 403(a). The Supreme Court dismissed the petition, but the Appellate Division reversed. The Court of Appeals affirmed the Appellate Division, holding that the initial notice was jurisdictionally sound because it conformed to statutory requirements, and the subsequent change by court personnel did not invalidate it. The Court emphasized fairness to petitioners attempting to commence such proceedings.

    Facts

    National Gypsum Co. filed a notice of petition and petition on July 16, 2002, seeking a reduction in the tax assessment of its property in the Town of Tonawanda. The notice stated the matter would be heard on September 24, 2002, or on such other date as specified by the Court. After filing, the court clerk assigned a return date of August 28, 2002. The Town of Tonawanda found out about the change when it called the Erie County Clerk seeking details regarding the September 2002 return date.

    Procedural History

    The Supreme Court, Erie County, dismissed the petition. The Appellate Division, Fourth Department, reversed and reinstated the petition. The Appellate Division granted leave to appeal to the Court of Appeals and certified the question of whether its order was properly made. The Court of Appeals affirmed the Appellate Division’s order.

    Issue(s)

    Whether the notice of petition in a tax certiorari proceeding pursuant to RPTL article 7 was jurisdictionally defective where the petitioner included a return date that was later changed by court personnel.

    Holding

    No, because the petitioner fully complied with CPLR 403(a) by inserting a time and place for the hearing which conformed with the applicable statutory notice requirements; the subsequent change by court personnel did not invalidate the notice.

    Court’s Reasoning

    The Court of Appeals reasoned that RPTL 700(2) authorizes special proceedings in tax certiorari matters, and RPTL 704(1) requires compliance with CPLR 403(a), which states that a notice of petition shall specify the time and place of the hearing. The Court distinguished this case from situations where the notice of petition failed to include any time and place for the hearing, which the Fourth Department had previously held to be a jurisdictional defect (citing Matter of Niagara Mohawk Power Corp. v Town of Tonawanda Assessor). The Court emphasized that National Gypsum’s notice did include a time and place that met statutory requirements. The court stated, “Any other interpretation of the statute would be patently unfair to a party attempting to commence such a proceeding.” The Court affirmed the Appellate Division’s decision, answering the certified question in the affirmative.