23 N.Y.3d 48 (2014)

Under New York’s Real Property Tax Law, property is not considered “owner-occupied” for the purpose of Small Claims Assessment Review (SCAR) if the owner does not reside on the property, even if a close relative occupies it rent-free.

Summary

The New York Court of Appeals held that a property owned by the Manouels did not qualify for Small Claims Assessment Review (SCAR) because the property was not “owner-occupied.” Although the owner’s mother lived in the residence rent-free, the owners themselves did not reside there. The Court found the statute’s language clear and unambiguous, requiring actual occupancy by the owner to be eligible for SCAR. It rejected the Manouels’ argument for a broader interpretation, emphasizing that the Legislature’s intent was to limit SCAR to owner-occupied properties and that the statute should be interpreted according to its plain meaning.

Facts

Mehran and Sepideh Manouel owned a single-family residence in Nassau County. They did not live in the residence, but Mehran Manouel’s mother did, rent-free. The Manouels filed a SCAR petition to challenge the property’s assessed value for the 2010/2011 tax year. Nassau County sought to disqualify the petition, arguing the property wasn’t owner-occupied as required by RPTL 730(1)(b)(i). The SCAR hearing officer agreed and ordered the petition disqualified.

Procedural History

The SCAR hearing officer disqualified the Manouels’ petition. The Manouels then initiated an Article 78 proceeding, which the Supreme Court dismissed, upholding the hearing officer’s decision. The Appellate Division affirmed, finding the Manouels did not reside on the property and no evidence showed the mother’s residence was temporary. The Court of Appeals granted leave to appeal.

Issue(s)

Whether a property is considered “owner-occupied” within the meaning of RPTL 730(1)(b)(i) when the owner’s close relative occupies it rent-free, but the owner does not reside there.

Holding

No, because the statute’s plain language requires that the owner, not just a relative, occupy the property to qualify for SCAR. The Court found that the Manouels, who did not reside at the property during the relevant tax period, were ineligible.

Court’s Reasoning

The Court of Appeals emphasized the unambiguous nature of RPTL 730(1)(b)(i), stating that “where the statutory language is clear and unambiguous, the court should construe it so as to give effect to the plain meaning of the words used.” The Court reasoned that the statute’s use of “owner-occupied” meant the owner, not someone with lesser rights, must be in occupancy. The Court found that the legislature intended a clear distinction between owner-occupied and non-owner-occupied properties. The Court declined to adopt a broader interpretation of “owner-occupied” arguing, “the failure of the Legislature to include a matter within the scope of an act may be construed as an indication that its exclusion was intended”. It distinguished this case from Town of New Castle v. Kaufmann, noting that the ruling in the earlier case was supported by legislative history and administrative guidance. The court found that the Manouels’ claim did not have the same support.

The Court acknowledged the argument that the owners of non-income producing property who allow their relatives to occupy the property rent-free could also benefit from the SCAR program. However, the Court refused to broadly construe the statute, and instead deferred to the plain meaning of the statute as written. The Court stated, “Were we to adopt the Manouels’ interpretation, and ignore the literal language of the statute and its legislative history, we would invite further unsupportable expansions of the statutory text, and risk judicial encroachment on the legislature’s lawmaking role.”