R.E. Q&A

On this page, I’ll periodically discuss Real Estate issues, questions and news: 

Can I Complain About My Taxes?

Though the old adage about “death and taxes” may be correct, sometimes there IS something you can do at times to make your Property and School Taxes more manageable, or at least equitable with your neighbors.  When I was in College, I worked for the Town of Orangetown’s Tax Assessor’s Office as a “Real Property Data Collector”, and while municipalities do their best to be fair in Tax Assessments, human error, computer glitches and even differences of interpretation on what does and does not qualify as living space can mean an incorrect value may be posted on the tax roles for your dwelling.  Make sure your tax records reflect what the structure and property actually contain – you can check at your assessor’s office, or if you are in an “e-saavy” area, on-line.  If they seem off, check neighbor’s houses that are similar – is there a major discrepancy? If so, you have a way to officially request review of your assessment. 

It’s called “Grieving” and although that might be the emotion you have as your hard-earned money goes to the tax man, it is actually the official term for protesting your dwelling’s assessment.  Most townships in the Nyack area have an official “grievance day” sometime in Spring where homeowners can bring their evidence of tax inequity to a Grievance Board. The Board may then choose to keep the tax assessment the same; reduce the assessment; or, miracle of miracles, on occasion refund overpaid tax.  When I worked for Orangetown back in the early 80’s many homeowners chose to represent themselves – today, I would not recommend that unless the error is overwhelmingly obvious (like having the statistics of a completely different house than the one you actually own). 

There is a type of lawyer called a “tax certiorari” who specializes in just these issues.   Their compensation comes only if they attain a reduction for you – and is usually worked out on a percentage basis, not out-of-pocket.  If you have an issue, this is probably the wisest route in these days of computer records, satellite imaging of property and excessive litigation.  These experts are familiar with other similar cases that can be used as evidence that your property is overvalued or overtaxed – similar cases you might not have access to, or even be aware of.  If you own a Co-op this is truly the only way to get an adjustment on assessment, as a reduction would be for the entire cooperative, not just you.  Single Family Homeowners and Condo Owners might still choose to go it alone, but as stated prior, unless you have an open-and-shut case, the Grievance Boards can appear monolithic and intimidating to someone with no experience in this area.  Much of this is just perception, but these men and women have a very limited amount of time to hear a large number of grievances, and there are always a good percentage that are frankly specious – folks who are just angry at the amount of their taxes, but who are in equity with the properties around them and with their township’s assessment formula.  

While managing several of the Co-op buildings and complexes in Nyack, I had certiorari work done on all the buildings (New York City buildings do this every few years just to be sure).  In one case, the Certiorari Attorneys were able to not only have the building’s assessment reduced – but reduced retroactively for 5 years – resulting in over $150K  returning to the building’s reserve funds! 

There are times it pays to have a professional. Just as a professional realtor is important in this current overstocked market, a legal tax professional is your best bet if you have Property or School Tax issues! 

Myths and Myth-information about Co-ops

It never ceases to amaze me how many myths and incorrect assumptions continue to circle around about Co-ops and Co-op Buildings. I live and own in a Co-op in Nyack and have for 12 years; 9 of those years I have been a member of the Board of Directors of my building, and along with my work at Rand Realty, I managed Co-op buildings in Manhattan and Nyack through Bluewoods Management for 5 years. I’ve learned a lot about this admittedly different housing style, and mostly, I have learned not to be scared of them.     

1. Co-ops cost more to own than Condos:  FALSE.  This myth stems from the fact that a prospective buyer, looking for the “monthly charges” will see a much higher monthly charge than for a Condominium of equivalent size in the same area. There’s a reason for that – included in a monthly co-op maintenance bill are the property taxes for the unit.  Condos have a separate property tax bill. When added to the monthly common charges listed for a condo, frequently the monthly costs of condo vs. co-op are about the same.     

2. Co-op Boards can turn down an applicant for any reason.  MOSTLY FALSE.  Mostly, you say? This all-pervasive myth is even accepted by some folks who actually serve on Co-op Boards! But frankly, the legitimate reasons for turning down an application are limited.  Co-op Boards in New York State cannot turn down an applicant for purchase due to Race, Color, Disability, Marital Status, Gender, Sexual Orientation, Religion, Age, Military Status, National Origin or Familial Status (children under 18, for instance). There’s no choice here – these are federal and state fair housing protected classes and woe to the Co-op Board who thinks they can still get away with keeping people out for these reasons. The City of New York also adds additional protected classes: Lawful Occupation (if your job is a legal occupation, you cannot be denied – some Boards used to try to keep actors or lawyers or other occupations out of their  buildings), Lawful Source of Income (a Board cannot reject someone simply BECAUSE they receive government assistance for housing payments. However, if all sources of Income of the Applicant – assisted or not – do not add up to the financial requirements for the Building, the Board can deny on those grounds). Citizenship or resident alien status, Domestic Partnership status, and Gender Identity status are also protected in New York City. Basically, a Co-op Board really should only be judging an applicant on financial concerns – any other reason can become quite dicey.     

3. Co-op applicants cannot get government-backed loans.  PARTLY FALSE.  Sonyma (State of New York) writes Co-op Mortgage loans, FHA will write some co-op loans – Fannie Mae (and now FreddieMac), classifies co-ops and condos and PUDs according to specific types, based on certain criteria. Based on a number of criteria, each co-op and condo property is assigned a specific classification, which has its own set of qualifying guidelines – so they may or may not write loans for the Co-op complex you are interested in – when in doubt, ask your mortgage specialist, and if not, seek a Sonyma loan. VA loans are not available for co-ops at this time.     

4. Co-op owners cannot qualify for a STAR exemption.  FALSE. Like any other resident of the State of New York who owns their primary residence, Co-op owners are entitled to STAR tax exemptions. Like other property classes, there are basic exemptions, and then enhanced exemptions for seniors, veterans, volunteers and so on. Of course, to receive STAR credit, the NYS legislature must vote to keep the exemption in place each year.     

5. Co-ops are taxed higher than Condos.  FALSE.  In fact, quite often it is the other way around. Most co-ops consist of one building or perhaps a group of buildings each containing many units. Condominiums can also be structured that way, but are also seen as townhouse or row house type structures, or the ubiquitous garden apartments of the 1960s.  Co-op owners are presented with one tax bill for the entire property which is divided up between all the owners, and those taxes are paid as part of the monthly maintenance. Condos are all taxed separately – each unit in a complex has its’ own tax bill. In a 100 unit building, a co-op is taxed as merely one structure (admittedly, large) while an equivalent 100 unit condo building is taxed as 100 small dwellings.  In my experience, the overall tax bill for condos sometimes adds up to MORE than the one bill for the entire co-op when all the small tax bills are added together. Additionally, the portion of the monthly maintenance that represents the owners portion of the tax bill is TAX DEDUCTIBLE – in my own building that tax deduction is approximately 66% of my annual maintenance bill.     

As in all Real Estate matters, always consult your real estate attorney and your accountant for the specific ways Co-op laws, regulations and policies affect you. I am discussing Co-ops in general here, and each specific Co-operative building or complex will have its’ own by-laws, rules and corporate plan. Discuss these with your real estate agent, your attorney and your tax professional for their potential affect on you.     

 

Ivanhoe Co-op, Nyack. Photo JP Schutz

 

 

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