Recently, in Congregation Ateres Yisroel v. Town of Ramapo (2017 NY Slip Op 00287), the New York State Supreme Court, Appellate Division, Second Department held that the use of property in violation of local zoning laws prohibits the issuance of a tax exemption under the Real Property Tax Law.
Plaintiff Congregation Ateres Yisroel, a religious not‐for‐profit corporation, owned improved property in the Town of Ramapo. The certificate of occupancy for the property improvement, issued in 1954, authorized its use as a “one family dwelling.” The Plaintiff obtained a tax exemption for this parcel in 2008 under Section 420‐a of the Real Property Tax Law on the basis of religious use. The exemption remained in place through 2011.
In February 2012, the Plaintiff submitted an annual renewal application for its exemption and represented that no change had been made to the property’s ownership or use since its last tax exemption application. The Town of Ramapo denied the application, thereby rendering the property taxable. The Plaintiff commenced litigation against the Town of Ramapo for a judgment declaring the property exempt from real property taxes. The Supreme Court, Rockland County, granted the Defendants’ motion for summary judgment and the Plaintiff appealed.
Under Section 420‐a(1)(a) of the New York Real Property Tax Law, “real property owned by a corporation or association organized or conducted exclusively for religious, charitable, hospital, educational or moral or mental improvement of men, women or children purposes… and used exclusively for carrying out thereupon one or more of such purposes… shall be exempt from taxation as provided in this section.” However, if an entity uses property in violation of the local zoning code, such entity may not receive a property tax exemption pursuant to RPTL 420‐a. Congregation Or Yosef v. Town of Ramapo, 48 A.D.3d 731, 732 (2dDep’t 2016); see Matter of Oxford Group‐Moral Re‐Armament, MRA, Inc. v. Sweet, 309 N.Y. 744 (1955).
The Appellate Division found that the Town of Ramapo established entitlement to judgment as a matter of law by demonstrating the Plaintiff had illegally erected two trailers on the property without obtaining required permits and used the primary structure on the property as a dormitory and living quarters for over 20 students. These uses were not permitted by the certificate of occupancy. In addition, the Plaintiff failed to explain the changes in the property’s use in the renewal application.
The Court found the zoning and building violations precluded the issuance of the exemption and affirmed the lower court’s order granting summary judgment to the Town of Ramapo.
Although the decision reiterates existing law, it underscores an important point pertaining to exemption administration – namely, that zoning compliance should be ascertained by an assessor before passing upon an exemption application.