By Open Weaver Banks

In Matter of Seidel v. Board of Assessors, County of Nassau, No. 2010-02740, 2011 NY Slip Op. 07061 (2d Dep’t Oct. 4, 2011), the Appellate Division held that Nassau County used the wrong valuation date for a real property tax assessment with respect to separate residences owned by three petitioners residing in Woodmere, New York. The court held that improvements to the properties made after the valuation date could not be considered despite an extension of the time to resolve challenges.

In 2002, the New York Legislature enacted special real property assessment procedures for Nassau County to address the county’s “notoriously flawed assessment and assessment review systems.” Prior to amendment, procedural rules gave Nassau County ten days to determine homeowner grievances relating to assessment values. As the county was unable to resolve grievances in such a short period of time, taxpayers often overpaid their taxes and received refunds years later, when the grievances were finally resolved. In Seidel, the Court noted that Nassau County had a history of financing debt in order to pay these real property tax refunds.

The legislative solution in 2002 was to extend the deadline for Nassau County’s final determination and final assessment by a year. The intent of the legislation was to provide additional time for resolution of assessment appeals before taxes were levied in order to limit the number of judicially ordered tax refunds. Accordingly, for the 2008/2009 tax year under review in Seidel, the following schedule applied:

January 2, 2007 – County’s publication deadline for tentative assessment roll  

March 1, 2007 – Filing deadline for taxpayer grievances March 10, 2008 – Deadline for County to make

determinations on the grievances  

April 1, 2008 – County’s publication deadline for final assessment roll  

For purposes of determining the value of these residences for the 2008/2009 tax year, the Nassau County Administrative Code § 6-2.1(a) provided that “the Board of Assessors shall determine the taxable status and classification of all real property . . . for the second succeeding fiscal year according to its condition, ownership and use as of the second day of January in each year.” Thus, the Court found that January 2, 2007 was the “taxable status date” for the 2008/2009 tax year, and therefore the date as of which the properties’ value is determined.

All of the property owners in Seidel made improvements to their residences after January 2, 2007, but before January 2, 2008, the next tax status date. For the 2008/2009 tax year at issue, the owners contended that their properties should have been valued as they existed on January 2, 2007, the taxable status date. Nassau County’s Board of Assessors took the position that the owners’ properties should be valued with the new improvements as of January 2, 2008. The County argued that the statute allowed the assessor to change the valuation of property when improvements were made between taxable status dates, while the owners argued that the provision only allowed the improvements to be considered on the “next” assessment role.

The owners commenced a small claims assessment review (“SCAR”) proceeding challenging the Nassau County assessments. Due to limited jurisdiction, the SCAR hearing officer was unable to review the owners’ claims that their properties should have been valued as of January 2, 2007, and he upheld the assessments. The owners then commenced a proceeding in the New York Supreme Court (New York’s trial court) against the Nassau County Board of Assessors and the Assessment Review Commission. The Supreme Court annulled the determinations of the hearing officer, and remitted the matters for a de novo review of the applications and a new determination before a different SCAR hearing officer, with the direction that the properties be valued as of January 2, 2007. Nassau County appealed the Supreme Court’s decision to the Appellate Division, Second Department.

On appeal, the Appellate Division had to interpret special procedures enacted in connection with the 2002 procedural reforms. The law provides that when the tentative assessment roll (published on the taxable status date) fails to reflect the construction of improvements made after the taxable status date, but on or before the taxable status date applicable to the assessment roll for the following year, the County shall determine a “new assessment.” Such new assessment is based on the value of the property as of the second day of January occurring on or after the date of the construction. With regard to the timing of the new assessment, Nassau County Administrative Code § 6-24.1(e) provides that when the County determines a new assessment that is greater than the original assessment, “it shall be entered on the next following tentative roll” (emphasis added).

Agreeing with the owners, the Appellate Division in Seidel reasoned that “next” means “next.” Since the improvements at issue occurred after January 2, 2007, but before January 2, 2008, the Board of Assessors must enter the new assessment on the next following tentative assessment roll, which would be the tentative assessment roll for the 2009/2010 tax year that would be filed on January 2, 2008. Therefore, the assessments at issue could not reflect the improvements made after January 2, 2007. By giving the County an extra year to review the grievances before the assessments became final, the statute did not allow it to consider improvements made after the taxable status date.

Additional Insights. The law in question in Seidel and other 2002 procedural amendments to the Nassau County Administrative Code are scheduled to expire on December 31, 2012. If allowed to sunset, Nassau County will lose the extra year provided by the 2002 legislation in which to resolve grievances before publication of the final assessment roll. Nassau County real property owners should be aware that the opportunity for resolving a disputed assessment before seeking review of a determination of the Nassau County Assessment Review Commission will again be abbreviated beginning in 2013.