BILL NUMBER: S1186

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the real property tax law, in relation to requiring
certain disclosures and charges by attorneys performing services in
connection with a real property tax grievance procedure

 
PURPOSE OR GENERAL IDEA OF BILL:

To notify homeowners who are grieving their property tax assessment that
they can complete the forms on their own and to limit the fees that
firms charge homeowners who choose to use their services.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section one amends the real property tax law to require any contract or
retainer agreement between a property owner and an attorney for legal
services related to small claims assessment review to include a disclo-
sure that complaints can be completed without the help of an attorney.
              

The disclosure must be clear and conspicuous and in size sixteen font or
larger. The disclosure must state that information on the small claim
assessment review process, forms, and assistance can be found on the New
York courts website and the website for the appropriate municipality
where the property is located.

Section two amends the real property tax law to limit the fees that a
person or entity representing a homeowner in an assessment review can
charge the homeowner. The cap is twenty-five percent of any reduction
determined by the assessment review commission or board.

Section three is the effective date.

 
JUSTIFICATION:

A homeowner's tax bill is based on what the municipality believes the
property is worth. A property with a higher worth will have a higher
property tax bill. The grievance process allows homeowners to prove to
an assessor that the property is worth less than what the municipality
says it is and reduce the homeowner's property tax bill.

The grievance process was intended as a tool to fix inequities in tax
assessments but the process has actually made tax assessments less fair.
Wealthier neighborhoods appeal at much higher rates and regularly
receive significant assessment reductions even though homes in those
areas were more likely to be undervalued. In poorer neighborhoods, home-
owners are not only more likely to have their properties overvalued;
they are less likely to appeal.

Whatever reductions are granted are paid for by the rest of a munici-
pality's property owners who pick up the tab for any refund and bear the
increased tax burden in the following years. A 2017 investigation by
Newsday on Long Island found that the assessment program in Nassau Coun-
ty shifted $1.7 billion in taxes from those who won assessment chal-
lenges and tended to be more affluent to those who are not.

Despite being designed to accommodate homeowners making claims on their
own, assessment specialists and attorneys have led homeowners to believe
that the process is complicated and requires assistance.  This cottage
industry has manipulated the grievance process for their own ends- to
collect high fees without providing relief to the majority of homeown-
ers. Most companies charge homeowners only if the company successfully
lowers the property tax bill but the charge is still very high - the
amount saved by grieving.

This bill brings transparency and control to the homeowner by requiring
assessment specialists and attorneys to disclose to homeowners that they
do not need to hire a specialist or attorney to file a tax grievance,
the forms can be completed by the homeowners with assistance by the
appropriate municipality. The bill also caps the excessively high fees
paid to attorneys and specialists.  Assessment specialists and attorneys
will no longer be able to prey on homeowners who do not know their
rights. This will eliminate some of the predatory practices being seen
across the state and empower homeowners to make informed decisions when
filing these grievances.

 
PRIOR LEGISLATIVE HISTORY:

New legislation.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.