N.Y. Second Department Appellate Division Court denies assessor property access for inspection

September 08, 2014 - Long Island

Sean Cronin, Cronin & Cronin

New York's Second Department Appellate Division Court recently provided a victory for property owners who do not want to allow the assessor to inspect the interior of their property. The unanimous decision (Matter of Marlene Jacobowitz v. Board of Assessors for town of Cornwall) denying access to the assessor was written by judge Thomas Dickerson and published on July 30, 2014. The court determined that the municipality must demonstrate their entitlement to enter the property. They stated that the need to enter the property must then be found reasonable when weighed against the owner's privacy interests. The court decided that this burden was improperly shifted to the taxpayer and, based on the record before them, the town had not shown that the inspection was reasonable.
The decision comes shortly after governor Cuomo's long-time girlfriend Sandra Lee had denied an assessor's request to inspect the improvements she had made at her residence in the town of New Castle. In Lee's case, a description, along with pictures of her remodeling, had been featured in USA Today, New York Magazine, People and on the cover of Elle Décor. Despite the evidence of substantial changes to her home, Lee would not allow the assessor inside. Ultimately, the assessor utilized what resources were available to him to determine the property value and increased Lee's assessment by 29%.
The Jacobowitz decision is a significant one that could have far-reaching impact. judge Dickerson expounded on the topic over 14 pages and examined a number of arguments presented by the town. The town felt that by filing a grievance in an effort to reduce their property taxes, the owner had in effect "opened the door" and waived their right to deny inspection. The court stated that protesting one's taxes was not equivalent to a waiver of this privacy right and rejected this position.
At a time where jurisdictions such as Nassau County are passing legislation that requires commercial property owners to disclose financial information annually or face a penalty imposed on their tax bill, a decision that protects the rights of property owners is noteworthy. While this case may address a residential matter, the governing principle can easily be extended to commercial cases. In fact, a strong argument can be presented that commercial owner's privacy interests are far greater than residential ones, as many more factors and stakeholders must be considered, such as the rights of tenants, their employees, trade secrets, etc.
To support their reasoning, the court repeatedly cites the Fourth Amendment and even goes so far as to quote a case that states the basic premise of the Fourth Amendment "is to safeguard the privacy of individuals against arbitrary intrusions by government officials." The court acknowledges that an intrusion for assessment purposes is far less hostile than that related to a criminal investigation or police search, but makes a point of noting that, without consent, these searches are unreasonable unless authorized by a search warrant. The court even distinguishes inspections by fire, health, or building code inspectors as more compelling than an inspection for assessment purposes, due to the public interest related to health and safety. It is safe to say that no such immediate and compelling public interest extends to property tax assessment.
The court stated that the town's interest in inspecting the property was not "per se unreasonable," but rather, the town did not establish that the infringement on the property owner's rights was outweighed by the necessity of completing an interior inspection to arrive at the assessment. The court pointed out that assessments are often determined without access to a property, and alternative methods to arrive at an assessed value exist. By explaining that this assessor had previously calculated assessments using these other methods of appraisal, the court cast doubt on the town's assertion that an interior inspection was absolutely required.
It's noteworthy that in the Jacobowitz case, the court never cited the property owner's reasoning for her objection to the assessor's intrusion to the property. From the court's perspective, it appears irrelevant. The burden is on the municipality to demonstrate the need for the inspection, and to demonstrate that this need outweighs the privacy interests of the owner. As such, this legal precedent may translate directly to commercial property cases. A refusal of inspection for a commercial property would have to be considered in light of the facts of that particular case, but the court's placement of the burden on the municipality and their approach in balancing privacy interests in Jacobowitz would likely be considered for guidance.
The goal of equitable assessments is an extremely important one, but New York state's second highest court has now explained in detail that a property owner's privacy interest must be considered as well.
Sean Cronin is an attorney at Cronin & Cronin Law Firm, PLLC, Mineola, N.Y.
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