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Volume 7 - Opinions of Counsel SBEA No. 123

Opinions of Counsel index

Assessment review (standing) (shopping center lessee) (residential tenant) - Real Property Tax Law, §§ 524, 704:

A shopping center lessee who is obligated by lease to pay taxes has the right to administrative and judicial review of the assessment of the property leased. However, a residential apartment tenant does not.

We are asked if a lessee in a shopping center has standing to bring a complaint before the board of assessment review and, subsequently, an Article 7 proceeding for judicial review of the assessment of the property containing the leased premises. We are also asked whether a tenant in an apartment complex has similar standing.

Section 524(3) of the Real Property Tax Law specifies that a complaint to the board of assessment review must be made by “the person whose property is assessed, or by some person authorized in writing by the complainant or his officer or agent to make such statement who has knowledge of the facts stated therein.” While this language implies that the complainant must be an “owner” of the property or his agent, the courts have construed this language more broadly as having to be read in conjunction with Article 7 of the RPTL.

Pursuant to that Article “any person claiming to be aggrieved by any assessment of real property upon any assessment roll” may commence a judicial proceeding for review of that assessment (§ 704(1)). Section 706(2) provides, however, that a petitioner must show that “a complaint was made in due time to the proper officers” to correct the assessment complained of. In McLean’s Department Stores v. Commissioner of Assessment, 2 A.D.2d 98, 153 N.Y.S.2d 342 (3d Dept., 1956), the court concluded that “[s]ince the right of judicial review is preserved for the benefit of persons claiming to be ‘aggrieved,’ it clearly follows that every complainant whose status is comprehended by that term is entitled to complain to the board [of assessment review] and obtain the preliminary review necessarily precedent to the judicial proceeding” (id., 153 N.Y.S.2d, at 345).

The same court has defined an “aggrieved person” as “one whose pecuniary interests are or may be adversely affected [by an assessment]” (People ex rel. Bingham Operating Corp. v. Eyrich, 265 App. Div. 562, 40 N.Y.S.2d 33, at 35 (3d Dept., 1943)). More specifically, a lessee of property obligated to pay taxes during the term of the lease has been held to be a “person aggrieved” and therefore entitled to seek review of an assessment (McLean’s Department Stores, supra; see also, Matter of Burke, 62 N.Y. 224 (1875); and, Arlen Realty and Development Corp. v. Board of Assessors, 74 A.D.2d 904, 425 N.Y.S. 2d 855 (2d Dept., 1980)). In 4 Op. Counsel SBEA No. 87, we concluded that where a mortgagee could be directly affected by an assessment, the mortgagee would have standing to obtain review of an assessment on the mortgaged premises (see also, Suburbia Federal Savings and Loan Association v. Mayor, 76 A.D.2d 841, 428 N.Y.S.2d 323 (2d Dept., 1980), in which the court held that where a mortgagee’s alleged injury is not direct but only a mere possibility, the mortgagee is not an “aggrieved person” entitled to commence a certiorari proceeding). On the facts related to us, therefore, we conclude that the shopping center lessee has standing to obtain administrative and judicial review of the assessment of the property leased.

The same conclusion does not necessarily apply to apartment dwellers. We have not found any reported cases applicable to the rights of residential lessees to challenge assessments. It would appear that, based on the judicial decisions cited above, a tenant must demonstrate his obligation to pay directly the taxes levied on the property or, in some manner, demonstrate that he will be “directly injured” by the assessment. Absent such a showing, a residential renter would be in the same position as the petitioners in the Suburbia Federal case, supra.

It should be noted that Chapter 471 of the Laws of 1978 established assessable property interests for those who rent residential real property. That Chapter made such persons liable for the payment of taxes due on the rental premises and likewise afforded them an opportunity to challenge the assessments on such premises. The effective date of this Chapter, however, has been indefinitely postponed (L.1982, c.893).

It is our opinion, therefore, that without the statutory interest provided by Chapter 471, without liability for the payment of the taxes on the rented property, or absent some other direct injury resulting from the assessment, tenants of residential apartment units do not have standing to complain before the board of assessment review in regard to the assessment of the property in which their apartments are located.

September 7, 1982

Note: Under Larchmont Pancake House v. Board of Assessors of the Town of Mamaroneck, __ NY3d __ (2019), a lessee who is not legally responsible for paying the real property tax on the leased property is not entitled to seek judicial review of the assessment under RPTL Article 7.