How homeowners on L.I. are getting ripped off every day by tax assessment panels

We all know that Long Islanders pay some of the highest property taxes in the country. Many Nassau and Suffolk County residents choose to contest their property assessments to be sure that they will only pay their fair share of the tax burden. But the recent declines in the real estate market and increasing illiquidity in the mortgage lending markets have left an increased number left homeowners being assessed at implied assessed “fair market values” significantly exceeding the real value of their properties. This has and will continue to leave many Suffolk County residents over-taxed because they are over-assessed. As Marcellus once said to Horatio “Something is rotten in the state of Denmark”.

Local Board of Assessment Review boards (BARS) have both significant power in and responsibility to reduce assessments of properties that are over-assessed and carrying a disproportionately high tax burden. To challenge a property assessment, the first step is to file for an Administrative Review with the local Board of Assessment Review. The BAR is charged with reviewing information submitted with a complaint and determining whether the reduction requested by the petitioner is warranted, in full or in part.

In theory, every single-family residential property is supposed to be assessed at a uniform percentage of its fair market value. This percentage is commonly known as the residential assessment ratio (RAR). So if a property has a fair market value of $1,000,000 and it is located in the town of Huntington where the RAR is .65%, the property’s total assessment should be .65% of $1,000,000 or $6,500.

Property owners or their representatives such as property tax grievance consultants like me, must file a complaint to petition for an assessment reduction. This Administrative Review is required, and in theory is SUPPOSED to provide an equitable forum designed to provide taxpayer relief. Unfortunately, in some jurisdictions this is NOT the case.

Looking at our BAR hearing decisions returned on our cases this year, it is hard for anyone to imagine these boards are objective and functioning independently. Some of these boards seem to act as an arm of the Assessor’s office and fail to fulfill their mandated function. Based on the results of this year’s Board of Assessment Review hearings in the towns of Islip, Huntington and Brookhaven, it seems the board members and the town attorney are ignorant of state case law, are deliberately choosing to ignore the law because they are not accountable, and/or are in an improper liaison with the assessor’s office. This year, the BARs of the towns of Huntington, Islip and Brookhaven, unjustly and unfairly refused to grant relief in a vast majority of cases even when it was clear that the current property assessments are incorrect and adjustments are warranted.

State law does not permit the assessor to change assessments after the tentative assessment roll has been filed. Only the BAR can authorize such changes. Often BAR Assessment reductions are denied in cases where it is clearly warranted and beyond any reasonable doubt. In these cases, the BAR decisions will certainly be overturned on appeal in Small Claims Assessment Review in Supreme Court.

In my opinion, the 2007/2008 BARS in the towns of Huntington, Islip and Brookhaven have denied a significant number of requests where relief is clearly warranted. These BARs have been remiss in their responsibility to fairly hear and review the complaints; they are responsible for over-burdening the court system with defenseless cases.

New York State Real Property Tax Law (RPTL) states:
“Assessments of real property are based on the “market value” (i.e., what a willing buyer would have paid a willing seller) of your property. Though the law does not require that property be assessed at its full market value, all property in an assessing unit must be assessed at a “uniform percentage of value”.”

From the RPTL the “Market Value” is clearly defined as: “the price a willing buyer would pay a willing seller for a property in its present condition with neither buyer nor seller under pressure to act (such as career relocation, death of a family member, divorce, etc.). A market value sale also is known as an arm’s length transaction” (between unrelated parties).

Establishing an opinion that a purchaser obtained a good deal or a bargain is not sufficient to explain away the arm’s length transaction as “abnormal”. There must be some extreme distress and the seller must be under pressure to act. An arm’s length sale is the single highest rank evidence of the market value of a property and is seemingly by its very definition, the “market value” of the property.

The following excerpt comes from the NY State Office of Real Property Services pamphlet on “How to Contest Your Assessment” and is specifically detailed in Section One of the Pamphlet addressing Administrative Review (Board of Assessment Review) the ways market value is demonstrated and determined.

Value of property

“You are required to submit proof necessary to determine the value of your property. Generally, “value” means market value, i.e., the price your property would sell for in the open market (assuming no unusual circumstances). Market value can be estimated from a recent sale of your property or from an analysis of recent sales of comparable properties…”

One of the most ironic aspects of this comical disregard for the spirit and letter of the law came during the Islip BAR hearings. As I did at every other BAR hearing, I presented the town attorney with a copy of a Decision Order and Judgment in the matter of Highland LLC v. The Assessor of, The Board of Assessment Review of and The City of Mount Vernon, New York, which: supports the position that a recent arm’s length sale is the best evidence of market value and cites the case of the matter of Robert Lovett v. Assessor of the Town of Islip in which the ISLIP TOWN ASSESSOR ARGUED THIS VERY POINT on an appeal to the 2nd department. The town attorney received a copy of the case and even acknowledged familiarity with the case and yet the BAR, presumably after obtaining legal advice from the town attorney present, denied ALL 17 open and shut, arm’s length sale cases I presented.

It should be noted that the Smithtown BAR was more equitable forum and deserves some acknowledgement. The Smithtown BAR granted most, but not all and to the full extent, of the complaint’s filed based open a recent open market sale. Relief was properly granted at the BAR level most of these open and shut cases. Smithtown was the only town which acted in some accord with the letter and spirit of RPTL.

Property tax over-assessment affects tens of thousands of homeowners on Long Island and is costing taxpayers tens of millions of dollars every year. I am prepared to offer interviews with myself and a number of homeowners who’ve been affected. I believe this is to be very newsworthy and that its reporting will not only make local BARs be made accountable for their actions, but will potentially result in a swifter and more equitable resolution of tax grievance cases and a reduced burden on the court systems.

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James M. Burns
Licensed Tax Grievance Consultant
Aventine Properties LLC
29 West Hills Road
Huntington Station, NY 11746
Tel: (631) 673-6738
Fax: (631) 673-6706
Email: Aventine@optonline.com