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Volume 8 - Opinions of Counsel SBEA No. 93

Opinions of Counsel index

Assessment review, small claims (ownership requirement) (corporation) - Real Property Tax Law, § 730:

Real property owned by a corporation does not qualify for small claims assessment review.

A question has been raised concerning the eligibility for small claims assessment review of a parcel improved by a residential structure, title to which is held by a corporation. Apparently, eligibility is conceded on all grounds save the question as to whether the structure is “owner-occupied”. A corporate officer is the resident of the property, although title was placed in the corporate name at the advice of her attorney. The question is whether the occupant, who is an officer (and presumably a shareholder) in the corporation, may be deemed to own the property.

In order to qualify for small claims review a parcel must be improved by a 1, 2 or 3 family owner-occupied structure used exclusively for residential purposes. The section contemplates a typical residence owned and occupied by a taxpayer who uses the structure for residential purposes. Title to corporate property rests “in the fictitious entity called the corporation, and if all the stock were owned by a single person he could not by his conveyance affect the legal title” (Buffalo Loan, Trust and Safe Deposit Co. v. Medina Gas and Electric Light Co., 162 N.Y. 67, at 76, 56 N.E. 505 (1900)).

In Danforth v. McGoldrick, 201 Misc. 480, 109 N.Y.S.2d 387 (S. Ct., New York Co., 1951), it was held that owners of shares in a cooperative apartment building did not own the building itself. “A person purchasing stock in a cooperative is not buying a house. He is buying shares in a corporation and contractual rights to occupancy of an apartment in a building owned by the corporation” (109 N.Y.S.2d at 389).

The extension of the rationale of these cases to the instant situation leads to the conclusion that the parcel is ineligible for small claims assessment review because the corporation, not the occupant, owns the property.

April 9, 1986