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Volume 7 - Opinions of Counsel SBEA No. 14

Opinions of Counsel index

Assessment, separate (building floors) (separate ownership); Assessments, generally (parcel) (definition of) - Real Property Tax Law, §§ 102(11), 502:

An assessor may separately assess two floors in a building which are owned by separate persons. Each floor must be susceptible to a description sufficient to accurately identify the portion(s) so assessed.

We have been asked whether an assessor may separately assess two floors of a commercial property in the names of the individual fee owners of each floor.

Section 500 of the Real Property Tax Law requires each assessor to ascertain all the real property located within his assessing unit, and the names of the owners of that property, by taxable status date. Thereafter, the assessor must prepare an assessment roll in accordance with section 502 of the Real Property Tax Law and the administrative rules promulgated by the State Board (9 NYCRR Part 190). Subdivision 2 of section 502 requires that the name of the owner of “each separately assessed parcel” shall be entered on the assessment roll. A parcel is defined by Real Property Tax Law, section 102(11) as a “separately assessed lot, parcel, piece or portion of real property.” However, what shall constitute a “separately assessed parcel” has not been defined.

There are instances in which the assessor is statutorily required to separately assess diverse interests. Perhaps the best known is that contained in section 339-y of the Real Property Law, which requires the separate assessment of each unit of a condominium (see also, Real Property Tax Law, § 580). In addition, the Real Property Tax Law requires the assessor to make separate assessments in two instances: namely, when a “trailer or mobile home or the land upon which it is located is entitled to any exemption pursuant to article four of this chapter” (§ 102(12)(g)), and where an improvement not owned by the State is situated on land owned by the State (§ 564).

The courts have addressed the issue of what is considered a “parcel” for assessment purposes on several occasions. In French v. Wittlesey, n.o.r., 30 N.Y.S. 363 (S. Ct., Suffolk Co., 1894), the court held that an assessment as a single parcel, of subdivided lots owned by one person, was a jurisdictional defect which invalidated the assessments and the taxes levied thereon. To the contrary, however, is Lazarus v. Feitner, 65 App.Div. 318, 73 N.Y.S. 97 (1st Dept., 1901), aff’d, 169 N.Y. 604, 62 N.E. 1099 (1901), which upheld a single assessment of six lots owned by different persons where the lots were occupied by a single building. In the latter case, the court reasoned that “it is impracticable to apportion the value of said building among the various parcels upon which it stood” (73 N.Y.S. at 102). In Case v. W. H. Loomis Talc Corp., 265 App.Div. 296, 38 N.Y.S.2d 746 (3d Dept., 1942), the court upheld the separate assessment of mines and minerals from the land in which located.

In Doughty v. Loomis, 9 A.D.2d 574, 189 N.Y.S.2d 413 (3d Dept. 1959) aff’d, 8 N.Y.2d 722, 167 N.E.2d 643, 201 N.Y.S.2d 100 (1960), the court stated that although an assessor cannot be compelled to make separate assessments of land and the improvements thereon, even when separate ownership exists, he may do so in his discretion (see also, Rose v. Elliot, 218 App.Div. 287, 218 N.Y.S. 185 (3d Dept., 1926); Zinner v. Palmer, 272 App.Div. 518, 73 N.Y.S.2d 279 (3d Dept., 1947); 1 Op.Counsel SBEA No. 95).

In much the same manner as these judicial decisions, our previous opinions have considered the issue of what should constitute a separately assessed parcel on a case by case basis. For example, with respect to oil and gas rights, our conclusion is that the separate assessment of these rights in the name of the lessee, apart from the assessment of the land from which those rights are derived, would be permissible but not recommended (4 Op.Counsel SBEA No. 77), unless the rights pertained to property which is otherwise entitled to an agricultural ceiling assessment (see, 7 id. No. 20).

The rationale for recommending generally against separate assessments is the possibility of difficulties in proceedings to enforce collection of unpaid taxes. That is, will the municipality be able to find a buyer for an interest in less than the entire structure so that it will be able to recoup any unpaid taxes, interest and other costs?

This practical consideration aside, we see no statutory impediment to the separate assessment of two floors of a building where title to each floor is held by a different grantee. However, this is a matter for the discretion of the assessor (see, 2 Op.Counsel SBEA No. 88), and separate assessment must be limited to those instances in which each “parcel” is susceptible to a description on the assessment roll sufficiently definitive to be readily identified by a person examining that roll (cf., Sailor’s Snug Harbor in the City of New York v. Tax Commission of New York, 26 N.Y.2d 444, 259 N.E.2d 910, 311 N.Y.S.2d 486 (1970)).

September 26, 1980