Selective Assessment Recap by Kara J. Cavallo, Esq.
I very much enjoyed presenting “Constitutional Issues Impacting Real Property Taxation and Assessment” at this year’s New York State Assessors Association Fall Conference. I love real property taxation and assessment and I find myself thinking about the captivating issues presented in this field all the time. You may be surprised to hear this, but outside of the profession, a lot of people are oddly not all that interested in real property taxation and assessment and really do not want to talk about it too much. So, for me, it is a pleasure to have a captive room full of assessors who are not only similarly interested but are passionate about real property assessment and have strongly held views and opinions. We had a lively class and a lot of challenging questions were presented, with differing perspectives. New York case law is often in conflict and is anything but a clear guide as to selective assessment, but – in case you missed it – here is a quick recap:
What is Selective Assessment? Selective assessment is a violation of the Equal Protection guarantees of both the United States and New York Constitutions. The golden rule is that similarly situated properties must be treated uniformly for purposes of taxation and assessment. See Allegheny Pittsburgh Coal Co. v. County Comm’n of Webster Cty., 488 U.S. 336 (1989).
How Is “Similarly Situated” Determined? This is a question of fact for trial in a Real Property Tax Law Article 7 special proceeding, a Civil Practice Law and Rules Article 78 proceeding, a declaratory judgment action, or a 42 U.S.C. §1983 civil rights claim. Each of these have specific procedural and substantive requirements and differing statutes of limitations, which can create pitfalls for petitioners attempting to bring a claim.
The Assessor’s Explanation: “[W]here a petitioner alleges a change in assessment in a tax year in which there is no municipal-wide re-assessment, the assessor is required to provide an explanation of both the change in assessment on petitioner’s parcel, and his assessment methodology in general.” Matter of Leone Props., LLC. v. Board of Assessors for the Town of Cornwall, 24 Misc.3d 1218(A)(Sup. Ct. Orange Cty. 2009), aff’d 81 A.D.3d 649 (2d Dept. 2011). The assessor must also demonstrate how the change brings the assessment into line with those of other properties whose assessments remain unchanged. 10 ORPS Opinions of Counsel SBRPS 60 (December 23, 1997). Generally, the Assessor’s methodology or thought process in arriving at an assessment is not relevant or discoverable in a proceeding challenging an assessment. In a selective assessment case, the assessor is the star witness.
Comprehensive, Equitable, Written Plan for Reassessment: Reassessment that is ad hoc, unexplained or without a rational basis is prohibited. New York courts differ as to whether a comprehensive, equitable “plan” for reassessment must be written in advance of its implementation or if it is sufficient to explain the assessor’s methodology in an affidavit submitted to the court when confronted with a challenge. But courts uniformly agree that the assessor must articulate what amounts to a comprehensive, equitable plan when confronted with a challenge.
“Welcome Stranger”/“Welcome Neighbor”: Reassessing only those properties that are the subject of a recent sale is the paradigmatic form of selective assessment. See, e.g., Matter of Krugman v. Board of Assessors, 141 A.D.2d 175 (2d Dept. 1988).
Reassessment Upon Improvement: This is acceptable, and indeed required by RPTL §302(1), but the assessor must add the value of the improvement to the prior assessed value. Reassessment of real property to its current market value merely because it has recently been improved is selective assessment. Matter of Stern v. Assessor of City of Rye, 268 A.D.2d 482 (2d Dept. 2000).
Newly Created Property: Newly created real property is property converted from an unimproved to an improved state. Newly created real property may be initially assessed at or near market value as long as uniformly applied. Matter of Markim v. Assessor of the Town of Orangetown, 11 Misc.3d 1063[A](Rockland Cty. 2006). The test is whether the newly created real property is assessed at a higher percentage of market value than existing real property. See Matter of Young v. Assessor of the Town of Bedford, 37 A.D.3d 729 (2d Dep’t 2007).
Changing Assessment Methodology: Assessing newly created real property at a current market rate while existing real property is assessed utilizing a different assessment methodology may give rise to a selective assessment challenge. See Montgomery v. Bd. of Assessment Review of the Town of Union, 30 A.D. 3d 747 (3d Dept. 2006). Changing assessment methodology may inadvertently create different classes of real property without a rational basis.
Subdivision: Selective assessment is not applicable where individual parcels are separately assessed following the filing of subdivision maps. Matter of Goodhue Wilton Props., Inc. v. Assessor of the Town of Wilton, 121 A.D.3d 1360 (3d Dept. 2014); RPTL §504(4).
Zoning Change: Reassessment of vacant land after zoning change was held to be selective where all vacant parcels were not also reassessed. See Matter of DePaulis Enters. Ltd. v. Town of Clarkstown, 2014 N.Y. Misc. LEXIS 5851 (Rockland Cty. 2014).
Change of Use: Whether reassessment based on change of use from residential to bed and breakfast constituted selective assessment was a question of fact necessitating an evidentiary hearing. Matter of Karmel v. Assessors of the City of White Plains, 132 A.D.3d 996 (2d Dept. 2015).
Change of Class: No selective assessment where property reclassified from Class II (income producing) to Class I was reassessed based on new classification utilizing cost method of assessment consistent with Class I properties. Board of Managers of Acorn Ponds v. Board of Assessors, 197 A.D.2d 620 (2d Dept. 1994).
Condominium Conversion: Reassessment after conversion from apartment to condominium was held to be selective assessment. Matter of Towne House Vill. Condo. v. Assessor of Islip, 200 A.D.2d 749 (2d Dept. 1994).
In sum, selective assessment can be a complex and challenging issue, made more complicated by the fact that New York courts may reach differing results on similar facts. The best solution is for an assessor to carefully consider and craft a comprehensive and equitable assessment plan generally and to seek legal guidance in advance of implementing any reassessment plan.
This is not intended to be legal advice. You should contact your attorney to discuss your specific situation.
This recap was published in the September-October, 2022 edition of the New York State Assessors Association, Inc. Bulletin.