Thursday, June 9, 2011


The real estate world is becoming increasingly environmentally conscious and polluted properties are not well-tolerated. As the mindset has formed on the environment there is increasing vigilance through requiring remediation of polluted properties. Whether the pollution is from above with chemicals and oil permeating the ground or chemical and oil leaks from underground tanks or even flowing underground from another property, citations for cleaning up are issued in increasing numbers.

The cost of clean up or remediation can be somewhat ameliorated by lower tax assessments due to the loss in market value. In a case of first impression litigated by my firm, the New York State Court of Appeals in Commerce Holding Corp. v. Board of Assessors of Babylon found that the taxpayer was entitled to deduct the cost of remediating from the market value of the property in its normal state.

This decision has a substantial impact on property owners facing an environmental clean up. Under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) of 1980, a property owner is liable for the cost of cleaning up polluted property even if that owner can prove that they were not in any way responsible for the contamination, as was the case in Commerce. Under CERCLA, the owner is considered a “potentially responsible party” and will be strictly liable for the clean up costs. This is true even if the property is purchased after the contamination has been discovered. This standard requires owners of real estate to take extra precautions because the cost of any clean up will be imposed on them if the property is contaminated or becomes contaminated.

To those owners who have been cited and must pay clean up costs, the decision in Commerce offers some relief because it allows them to petition the assessor to reduce their tax burden on the property. Under Commerce, the assessor must first determine the value of the property as if it was uncontaminated and then subtract the entire remaining cost of the clean up from that value. This reduction takes into account that anyone looking to purchase the property would require that the sale price reflect the cost of cleaning up the property. In effect, this decision recognizes that property worth $1 million if uncontaminated but requiring $500,000 worth of environmental clean up is only worth $500,000 and should be taxed accordingly.

Purchasing and owning real estate is becoming more complicated all the time. The key to making a profit despite these complications is to be well-informed about all of your options, particularly when dealing with complex matters such as environmental clean up and taxes. If you have been cited for contamination, you have the ability to have your property taxes reduced to reflect the reduced value of your property. If you have been paying clean up costs, you should verify that your assessment was adjusted to reflect the cost of the clean up. You can check your property assessments in Nassau County by going to or by logging on to Typically, the assessor will not adjust an assessment on its own, leaving it up to you to make an application to reduce the assessment through a tax certiorari proceeding.

Thursday, May 5, 2011


Most municipalities, including Nassau County, assess properties at a fraction of its estimated fair market value. The Nassau County Assessor has claimed for the past several years to be assessing commercial properties at 1% of its fair market value. However, we have just entered into an agreement with the Nassau County Attorney’s Office to negotiate the 2011/12 and 2012/13 assessments as though the assessments are based on .905% of the actual fair market value.

What exactly does this mean?

If a property is assessed at 10,000, the County Assessor’s website would claim a fair market value of $1,000,000. However, due to the agreement mentioned above, the County Attorney’s Office will negotiate tax reduction proceedings as if the property is assessed as worth $1,105,000.

Thus, if the property is really worth $1,000,000, and the County agrees to negotiate as if the property is assessed at $1,105,000, then the taxpayer would get a 10% reduction in assessment to bring their estimated fair market value down to $1,000,000.

The moral of this story … there is more than one way … to get a tax reduction.

Monday, February 28, 2011


Many Nassau County tax assessments have been reduced, but beware! Tax rates will have to be increased to meet the budgets. Almost daily we see a news story or opinion article on the outdated and broken Nassau County real estate tax assessment system. The probable take over of Nassau finances by NIFA (Nassau Interim Finance Authority) exacerbates the situation. Recently the County Executive announced a private appraisal firm would negotiate the real estate tax protests with the tens of thousands of homeowners complaining about their assessments. The administrative review of the commercial cases has all but stopped. There is a lot going on but so far the system has become more complicated and cumbersome. Maybe that's the plan.