Berdon, LLP announces NY real estate tax - RPIE penalties could pop up after a purchase

According to Berdon, LLP, starting late in 2012, owners of income producing properties in N.Y.C. who failed to file or filed late Real Property Income & Expense (RPIE) forms began being charged with penalties, triggering a potential trap for purchasers. The penalties, as high as 3% to 5% of the property's assessed value, are issued by the city's Department of Finance and may have a considerable lag time. For example: according to a source, penalties for 2010 were billed in the tax records nearly 2 years later. If a penalty has a comparable lag in getting entered into the tax records, an unwary purchaser of a property may be in for an unexpected surprise. In this environment, ahead of any closing, confirm that the seller has filed all RPIE forms.