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Volume 5 - Opinions of Counsel SBEA No. 66

Opinions of Counsel index

Assessments, generally (cotenancy in common parcel) - Real Property Tax Law, § 306:

Unlike easements, the existence of which an assessor must take into account when assessing a parcel, he need not take cognizance of cotenants’ interests. Thus, where a developer sells off ten lots and includes in each deed an undivided one-tenth interest in a “common property,” the assessor need not apportion the value of the common parcel among the owners of the other ten properties.

Our opinion has been requested as to the procedure for assessing property located in a proposed subdivision which will be owned in common by the owners of lots in the subdivision.

According to a letter from the attorney for the developer, the subdivision will have ten lots improved by cottages which will be sold. In addition, the developer proposes to convey in the deed to each lot an undivided one-tenth interest in what are termed “common properties.” These properties consist of common lands, a water supply system and a beach on a lake. Each deed will further provide that the common properties cannot be sold or any rights given therein apart and separate from the lot.

The developer wants the undivided one-tenth interest which each lot owner owns to be assessed with the lot as one parcel. Thus, if any lot owner fails to pay the tax on this parcel and the parcel is sold for unpaid taxes, the lone-tenth interest in the common properties and the title to the lot would remain in one ownership.

The question posed is a novel one for which we find no statutory or case law precedents. Perhaps the reason is that what the developer wants to accomplish here is normally done by way of conveying in the deed to each lot an easement for use of the “common properties” in common with all other lot owners in the subdivision. Title to the “common properties” remains in the developer or is conveyed to a property owners’ association with all the stock owned by the lot owners. Under this arrangement, the assessment of the common properties must reflect the burden imposed by the easements (see, 5 Op. Counsel SBEA No. 62 and the cases cited therein). Cases involving a beach and a park have held that the burdened property had a market value of only one dollar.

Under the Real Property Tax Law, the assessor must separately assess on the assessment roll each “parcel” of real property (§ 502). A “parcel” is defined in subdivision 11 of section 102 of that law to mean “a separately assessed lot, parcel, piece or portion” of real property. This definition does not, in our opinion, clearly authorize the assessment of an undivided interest in a lot as a separate parcel for taxation purposes. To the contrary, the particular words used indicate that a parcel must cover an “area” of land.

Troublesome dicta may be found in the often cited case Gale v. Tax Commission, 17 App. Div.2d 225, 233 N.Y.S.2d 501. There the court said at page 504:

Except in case of easement interests * [footnote deleted], a division of ownership or the independent holding of separate legal interests in taxable property will not affect the mode of assessment. For instance, mortgagor and mortgagee interests, vendor and vendee interests, landlord and tenant interests, life tenant and remainder interests and co-tenant interests are not separately assessed. (emphasis added)

In view of the uncertainty of law on this matter and of the fact it is jurisdictional and could bring in question the validity of the assessment on all the lots, it is our opinion that the assessor should not assess the common properties in the manner desired by the developer. As we pointed out above, the easement arrangement would bring the same result, and where easements exist, the assessor must take them into account and has no discretion whatsoever.

June 30, 1970

NOTE:  Construes law prior to L.1996, c.135.