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Volume 9 - Opinions of Counsel SBEA No. 29

Opinions of Counsel index

Assessments, generally (methods of valuation) (mobile home parks) - Real Property Tax Law, §§ 102(12)(g), 305:

The addition of the value of mobile homes owned by others to the value of the mobile home park does not constitute double taxation of the mobile homes.

We have received an inquiry concerning the assessment of mobile home parks in which the sites are rented to individuals who place their own trailers on the land. The assessor values such parks by the use of the income approach to value, and then adds to that value an amount representing the value of the mobile homes as determined by the cost approach. The assessor asks whether this constitutes “double taxation” of the mobile homes.

RPTL, section 102(12)(g), provides that real property subject to taxation includes:

(g) Forms of housing adaptable to motivation by a power connected thereto, commonly called “trailers” or “mobile homes”, which are or can be used for residential, business, commercial or office purposes, except those: (1) located within the boundaries of an assessing unit for less than sixty days, or (2) unoccupied and for sale. The value of any trailer or mobile home shall be included in the assessment of land on which it is located; provided, however, that if either the trailer or mobile home or the land on which it is located is entitled to any exemption pursuant to article four of this chapter, such trailer or mobile home shall be separately assessed in the name of the owner thereof[.]

This provision was added to then section 2 of the Tax Law by chapter 726 of the Laws of 1954. (When the RPTL was codified (L.1958, c.959), the provisions were carried over in section 102(12)(g).) The materials in the Bill Jacket compiled for chapter 726 clearly indicate the intent of the Legislature to provide that the value of mobile homes be added to the value of the land upon which they are situated, provided the statutory requisites are satisfied. The same materials show that the Legislature was addressing the problem of mobile home residents placing a demand on localities for services; under former law, the value of the mobile homes was not subject to taxation.

In the case of New York Mobile Homes Association v. Steckel, 9 N.Y.2d 533, 175 N.E.2d 151, 215 N.Y.S.2d 487 (1961), the Court of Appeals held that the trailer assessment statute was constitutional stating that:

[a]lthough the fee owner will, in such a situation, of course, be required to pay a higher tax than if the land were vacant, he will also protect himself by some stipulation in the lease against the increased taxation, and will in effect put the payment of it upon the lessee (People ex rel. Van Nest v. Commissioners of Taxes and Assessments, 80 N.Y. 573, 577). So, too, in the instant situation, the trailer park owner has the means at his disposal, by way of rent, to allocate the increased tax upon the owner of the trailer - the individual who should rightfully pay for it (9 N.Y.2d 533 at 539, 215 N.Y.S.2d 487 at 491).

The provisions of section 102(12)(g) were also the subject of more recent cases (Lazy Acres Park, Inc. v. Town of Cape Vincent, 122 Misc.2d 215, 470 N.Y.S.2d 70 (Sup.Ct., Jefferson Co. 1983), aff’d, 112 A.D.2d 809, 492 N.Y.S.2d 508 (4th Dept. 1985); Hidden Forest Homes v. Town of Campbell, 139 A.D.2d 924, 528 N.Y.S.2d 240 (4th Dept. 1988); and Morley v. Town of Oswegatchie, 152 A.D.2d 862, 544 N.Y.S.2d 72 (3d Dept. 1989)). In each case the petitioner claimed that the addition of the value of the mobile homes to the value of the mobile home park, derived by application of the income approach, constituted a double taxation of the value of the trailers. The courts rejected this contention because, in each instance, the mobile homes were owned by the occupants, not by the trailer park owner. The mobile home owner-occupants were renting only the “pads” on which the mobile homes were parked, and thus the application of the income approach measured only the value of the underlying land; it did not include any value attributable to the mobile homes themselves.

Obviously, a different result would follow if the tenants rented both the “pad” (or site) and the mobile homes from the park owner. In that case, the income “stream” would include rentals paid for the mobile homes; to add a cost factor for the mobile homes to the values indicated by the income approach would indeed value the mobile homes twice.

Accordingly, the manner in which this assessor is assessing mobile home parks is consistent with both appraisal theory and relevant case law.

March 1, 1988
Revised March 1990