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Volume 9 - Opinions of Counsel SBEA No. 100

Opinions of Counsel index

Assessments, generally (apportionment) (request of lessee) - Real Property Tax Law, § 932; 9 NYCRR 190-2.4:

An assessor is not required to apportion the assessment of a parcel under single ownership at the request of a lessee of part of the parcel.

We have been asked whether an assessor must apportion the assessment of a parcel under single ownership at the request of a lessee who rents a portion of the property for a restaurant. Sections 932 and 1010 of the Real Property Tax Law (RPTL) provide that a person may obtain an apportionment of the assessment of a parcel of real property. Section 932 requires the collecting officer to accept a partial payment of taxes equal to the tax due on the apportioned assessment. Section 1010(2) provides for the redemption of a portion of a parcel subsequent to tax lien sale.

The statutory apportionment of assessment provisions are implemented by section 190-2.4 of the State Board’s Rules (9 NYCRR 190-2.4), which provides that a person with an identifiable interest in a parcel may apply to the assessor for an apportionment of the assessment (190-2.4(a)). An applicant must specify the nature of his or her interest and must provide relevant documentation, such as a deed, to substantiate the claimed interest (190-2.4(b)). The assessor must then prepare a preliminary apportionment and notify all interested parties and afford them an opportunity to be heard (190-2.4(c)). If there are no objections, that apportionment becomes final (id.). If there is an objection, the assessor notifies the applicant and requests information from any interested parties (id.). Ten days thereafter, the assessor makes his or her apportionment determination whether or not additional information was submitted (id.). Once the apportionment is final, the collecting officer must accept tax payments made in accordance with such apportionment (190-2.4(d)). The portion of the parcel on which taxes are paid is excepted from any subsequent tax enforcement proceeding (190-2.4(e)).

Neither the statute nor the rules provides a precise definition of who may obtain an apportionment. Typically, the person who requests an apportionment is a person who has purchased a portion of a parcel subsequent to taxable status date and who wishes to protect his interest in that portion. In 8 Op.Counsel SBEA No. 89, we stated, “[s]ection 932 of the Real Property Tax Law (RPTL) permits a person who owns a portion or share of real property assessed as one parcel to obtain an apportionment of the assessment of the whole” (emphasis added).

The State Comptroller has concluded that a mortgagee may obtain an apportionment (Op.State Compt. 78-541). As the Comptroller noted in his Opinion, this is a significant exception to the general rule that an apportionment may not be made of a parcel under single ownership. {1}  The exception is based on the fact that a mortgagee has a significant interest in the property, including the right to obtain title to the property by foreclosure, if the mortgage debt is not satisfied. {2}

Here, the issue is whether, at the request of a lessee, an apportionment may be made of part of a parcel under single ownership. We think not.

Our research has not disclosed any judicial decision or administrative opinion on the issue of whether a fractional lessee may obtain an apportionment. We note, however, that the Court of Appeals has held that a fractional lessee does not have standing to seek judicial review of an assessment (RPTL, Article 7), unless the lease grants such right or the lessee is obligated to directly pay the taxes on the entire undivided parcel (Waldbaum, Inc. v. Finance Administrator, 74 N.Y.2d 128, 542 N.E.2d 1078, 544 N.Y.S.2d 561 (1989); accord, K-Mart v. Board of Assessors of the County of Tompkins, 176 A.D.2d 1034, 575 N.Y.S.2d 185 (3d Dept. 1991)).

We also observe that, if an apportionment is made in a situation such this and taxes are paid in accordance with the apportionment, that portion for which taxes are paid would be excluded from any subsequent efforts enforce taxes. This could operate to allow the owner to retain a desirable portion of the parcel, and leave the tax enforcing district with the unenviable prospect of acquiring a tax title to the rest of the parcel, which might be undesirable. We do not believe that the Legislature intended such a result, and, therefore, we conclude that there is no absolute right to an apportionment.

However, we see nothing to preclude an assessor, on request, from advising a property owner and lessee of the value which the assessor has allocated the respective portions of the parcel. This would allow the owner and lessee to calculate the amount of taxes attributable to the leased portion. Any such allocation would be a private contractual matter between the lessor and the lessee. The owner would ultimately be responsible for satisfying the taxes on the entire parcel.

September 11, 1992

{1}  Of course, an apportionment may be, and often is, made where multiple tenants own undivided crests in a parcel.

{2}  Note also that RPTL, section 1424, which provides for apportionments of village tax liens, specifically authorizes a mortgagee to obtain a redemption.