New York Governor Andrew Cuomo and his girlfriend, Sandra Lee, host of TV cooking show “Semi-Homemade,” faced criticism recently after Lee declined to allow the local property tax assessor to inspect their renovated, $1.2 million home. Reports suggested that Lee had previously carried out “extensive” renovations on the home without getting the appropriate building permits and without triggering an increase in the home’s assessed value. When the local assessor showed up to inspect the property for reappraisal, Lee denied access.
William O’Reilly, a campaign spokesman for Rob Astorino, a challenger to Cuomo’s governorship, said the situation showed that the governor was playing by a different set of rules from ordinary taxpayers, and referred to the situation as “tax evasion,” according to The Journal News. Astorino has even posted an online petition questioning why Cuomo won’t let the assessor into his home.
However, setting aside Lee’s alleged building permit issue, her decision to refuse access to an assessor or inspector was entirely lawful under New York’s property tax regulations, case law, and guidance the state provides to assessors and property owners—the same rules that apply to all property taxpayers in the state.
It is also acceptable in many other states—as of 2009, 20 states do not perform interior inspections for the purpose of reassessing property values for property tax, according to the International Association of Assessing Officers. And while 28 states inspect a percentage of properties annually, only 17 of those perform interior inspections. The IAAO’s prior 1999 report found that 35 states inspected all properties during reappraisal, while 19 states performed interior inspections. Thus, fewer states are conducting inspections, both interior and exterior.
The New York Supreme Court ruled in a case of first impression that it was unreasonable for an appraiser to conduct an interior inspection of a property without the taxpayer’s permission (Schlesinger v. Town of Ramapo, 807N.Y.S.2d 865 (2006)). Further, the New York State Department of Taxation and Finance’s property owners’ guide specifically states that owners are not required to let assessors or data collectors in their homes, but adds that “cooperation…helps assure that your assessment will be fair and based on complete and accurate information.” If a homeowner refuses access to the assessor, the assessor will simply value the property based on the information available, such as an exterior inspection, aerial photography or comparable sales information.
The department’s guide for assessors similarly has a section on what to do when an owner refuses access for an interior inspection. For example, it states that an assessor who is refused access should try to get as much information as possible about the inside without entering, for example by measuring the exterior of the building or asking the owner about the interior. It also encourages the assessor to “leave the premises immediately” and to “be courteous.” If both interior and exterior inspections are refused, the assessor will use comparable sales information.
Similar guides from local jurisdictions usually state that the homeowner does not have to allow access, but often come with a caveat suggesting that allowing access is better for everyone. For example, the city of Rochester’s FAQ page says, “State regulations respect the rights of an owner to refuse an inspection. However, lack of access can place staff in the awkward position of trying to assume the physical characteristics of a property, leading to inaccurate data generating the value estimate.”
Another common caveat is that if a taxpayer refuses access to his home and later disagrees with the assessment, it will likely be more difficult to challenge that assessment. In fact, in nearby Vermont, the state supreme court ruled that a taxpayer could not challenge the valuation of his home after he refused access to a property tax inspector (Garbitelli v. Town of Brookfield, 2009 VT109 (2009)).
The court stated that an interior inspection is a mandatory part of the appraiser’s determination, and therefore if there is no inspection, “there is simply no way” for the taxpayer to overcome the presumption that the appraiser’s valuation is correct. New Hampshire goes even further, allowing assessors to obtain administrative inspection warrants if they are unable to obtain consent to inspect property.
Returning to Lee and Cuomo, although they were not required to allow the assessor into their home, sometimes those in public office are held to a higher standard.
Continue the conversation on Bloomberg BNA’s State Tax Group’sLinkedIn page: Should Sandra Lee and Andrew Cuomo be criticized for not allowing an interior inspection of their home for property tax purposes? Conversely, should homeowners who refuse access to inspectors lose their right to appeal an assessment?
Sign up for a free trial of the Bloomberg BNA Premier State Tax Library and see a detailed discussion on state property taxes.
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