The Real Estate Board of New York to The New York City Department of Finance re: the taxpayer-initiated Request for Review process and the clerical error administrative review process

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The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association. Founded in 1896, REBNY represents commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople and other organizations and individuals active in New York City real estate. REBNY appreciates the opportunity to comment on the Department of Finance’s (DOF) proposed rules that impact the process to correct clerical errors.

The proposed rule would significantly alter how property owners can address errors in property tax assessments. While the goals of promoting efficiency and reducing potential abuse are laudable, the proposed amendments could significantly limit property owners' ability to address legitimate errors, which is particularly important given the complexity of New York City’s property tax system.

The proposed rule would amend Section 53-01(a)(1) to provide that a request for administrative review to correct a clerical error can only be filed by a filer who owned the property in the year in which the error is believed to have occurred. As stated in the proposal, “the purpose of this

provision is to prevent applications … by people who did not suffer any injury.” However, there are circumstances where tax assessments from prior years, including when the current owner did not own the property, will have a significant impact on the property’s current value. For example, this could occur if a property has been excluded from a protected tax class or if a particular tax year is the base year for future exemptions or abatements. It is not appropriate to remove the ability of a property owner to seek corrections that have substantive import on future assessments and/or tax benefits.

In addition, the proposed rule would adjust the time-period in which a request for a correction may be filed from six years prior to the date of the application to the tax year in which an application for correction of errors was submitted or during the two directly preceding tax years. Often, the types of changes that are addressed via the clerical error correction process are those that are difficult to spot in the current tax year and indeed may not appear for several years. This can occur, for example, in cases where there is a tax lot created as a result of apportionment. For this reason, we encourage DOF to maintain the six-year timeframe to correct errors.

The proposed rule further states that DOF will not allow an applicant to obtain a correction in a circumstance where an owner also seeks relief from the Tax Commission or sought judicial intervention and receives a decision on the merits. This proposal will significantly limit when DOF will correct clerical errors by forcing taxpayers to make a decision to forego their ability to address issues of value in order to pursue the correction of error. As the Tax Commission typically does not correct errors that are within the scope of the clerical error correction, this proposal makes it very challenging for a taxpayer to pursue the error correction path in a complex situation.

Furthermore, the proposed rule establishes that clerical errors and errors in description include only those that are purely ministerial in nature or that are the result of a mistaken conclusion of fact that could be unambiguously resolved by reference to documents on the DOF website. Current rules enumerate fourteen appropriate scenarios for correction requests. These scenarios would be eliminated under the proposal and replaced with a catchall phrase of ministerial errors. Unfortunately, this creates significant ambiguity as to what kinds of errors will be deemed to be ministerial. Moreover, the addition of the requirement that errors be “unambiguously resolved by reference to documents or information posted on the website of the Department of Finance,” overlooks the reality that many errors require information from other City agencies. This could include situations where documents are needed from the Department of Buildings to establish the date of demolition or where there is an incorrect square footage or number units.

For these reasons we believe the proposed rule will introduce significant new challenges for property owners. Thank you for considering these views.