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Volume 8 - Opinions of Counsel SBEA No. 108

Opinions of Counsel index

Assessments, generally (methods of valuation) (condominiums) (special assessments) - Real Property Law, § 339-y; Real Property Tax Law, § 102(2):

The assessment limitations applicable to condominiums pursuant to section 339-y of the Real Property Law refer to the assessor’s determination of value for purposes of the assessment roll, not to non-value related components of a special assessment such as front footage.

A county sewer district organized pursuant to section 271 of the County Law is financed by revenues raised from a three part formula comprised of front footage, per unit, and ad valorem components. In the case of condominium projects, a charge is levied against each condominium unit. One condominium has challenged this procedure claiming that section 339-y of the Real Property Law requires that a single per unit charge be imposed for the entire project.

In 7 Op.Counsel SBEA No. 81, we said that section 339-y establishes a ceiling on the assessments that may be placed upon condominium units by requiring that a condominium project be valued as an economic entity. “In no event shall the aggregate of the assessment of the units plus their common interests exceed the total valuation of the property were the property assessed as a parcel” (Real Property Law, § 339-y(1)(b); Matter of Riverhouse-Bronxville v. Galloway, 100 A.D.2d 970, 475 N.Y.S.2d 291 (2d Dept. 1984), mot. for lv. to app. den., 63 N.Y.2d 610, 484 N.Y.S.2d 1024 (1984)).

In interpreting section 339-y, “the terms ‘assessing unit’, ‘assessment’, ‘parcel’, ‘special ad valorem levy’, ‘special assessment’, ‘special district’, ‘taxation’ and ‘taxes’ shall have the meanings specified in section one hundred two of the real property tax law” (§ 339-y(1)(c)). Thus, an analysis of section 339-y requires reference to the definitions contained in the Real Property Tax Law.

The aggregate of the “assessment” of the units, which creates the ceiling on the assessments, means the determination of the value of real property and its taxable status (Real Property Tax Law, § 102(2)). A tripartite charge similar to that imposed by this county sewer district has been classified as a “special assessment” (Watergate II Apartments v. Buffalo Sewer Authority, 46 N.Y.2d 52,385 N.E.2d 560, 412 N.Y.S.2d 831 (1978)). A special assessment is “a charge imposed upon benefited real property in proportion to the benefit received by such property” (Real Property Tax Law § 102(15)). It is the assessment placed on each unit not the “special assessment” which is limited by section 339-y.

The law directs that each condominium unit is subject to “separate assessment and taxation . . . for all types of taxes authorized by law including but not limited to special ad valorem levies and special assessments” § 339-y(1)(a). Accordingly, each unit is liable for a special assessment which, in the case of the sewer district, includes an ad valorem component necessarily reflecting the valuation limitation of section 339-y. The limitation in valuation refers to the assessment which appears on the assessment roll. However, it does not otherwise affect the application of the special assessment formula to the condominium units.

September 9, 1985