Score a Court Victory for the Town of Ramapo

BY JOEL GROSSBARTH

After getting hit with a string a bad news ranging from arrests of top elected officials on Federal corruption charges to the state monitoring its building department, the Town of Ramapo got a little good news, thanks to an appeals court in Brooklyn.

The Appellate Division, Second Department affirmed a ruling that the Town properly denied a property owners application for tax exemption based upon a religious use. In Congregation Ateres Yisroel v. Town of Ramapo, the property owner, a religious not-for-profit corporation, held title to real property in Monsey. The property’s certificate of occupancy, issued July 12, 1954, permits it to be used as a “one family dwelling.”

From 2008 to 2011, the plaintiff obtained real property tax exemptions on the basis of religious use. In February 2012, the plaintiff submitted a renewal application for its real property tax exemption for the 2012/2013 tax year, representing that no changes had been made to the property’s ownership or use since its last tax exemption application. The plaintiff’s application was denied, and the Town Assessor issued a tax assessment for the property.

The Congregation then brought an action in Rockland County Supreme Court claiming the Town unlawfully denied its tax exemption. The Supreme Court dismissed Plaintiff’s actions, finding the Town properly denied the tax exemption request.

New York State Real Property Tax Law allows for a tax exemption of property taxes when 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 is used exclusively for carrying out thereupon one or more of such purposes.

In order for an entity to be entitled to this tax exemption, it must be organized exclusively for purposes enumerated in the statute, the property in question must be used primarily for the furtherance of such religious purposes, no pecuniary profit, apart from reasonable compensation, may inure to the benefit of any officers, members, or employees of the organization, and the entity may not be simply used as a guise for profit-making operations.

However, even where an entity otherwise meets this test, such entity’s use of its premises in violation of local zoning laws prohibits it from receiving a property tax exemption. The appeals court found that the plaintiffs had illegally erected two trailers on the property without obtaining the proper permits and, during the relevant time period, used the primary structure on the property as a dormitory and living quarters for over 20 students in contravention of its certificate of occupancy.

The court ruled the Town of Ramapo properly denied the application and the Congregation must pay real estate taxes on its property.