First published: Jun 2022
Tax Abatement Tangle
Managing agents are often treated like pin cushions, and over the last several years their jobs have been made even harder with increasing city regulations on everything from caps on gas stoves to sorting out who is and isn’t eligible to receive tax abatements. Here, the managing agent did nothing wrong, but had to incur the time and aggravation to deal with a disgruntled owner whose records were unclear regarding the location of her primary residence.
The Context Yoonoak Kang, a condo unit-owner at 241 Fifth Avenue, sublet her apartment from June 2015 through June 2017 while she lived out of state. She had notified the condo’s managing agent, Douglas Elliman Property Management, of her sublet and provided several mailing addresses where she could be reached. At issue, here, was the co-op/condo tax abatement, which she had not received since 2016.
You Should Know There are multiple requirements to be eligible for the condo/co-op tax abatement, but the two primary requirements are that: (i) the unit/apartment must be the owner’s primary residence; and (ii) the unit/apartment may not be owned by a business. Also of significance, the responsibility for filing the necessary information with the DOF in order to apply for and renew each year falls on the condominium/cooperative and/or its managing agent. Generally, the DOF is to be notified of an owner’s eligibility by February 15th of a given year.
What Happened Kang, representing herself, filed a complaint in small claims court against Douglas Elliman. She blamed the management company for failing to notify her of the availability of the tax abatement as well as for failing to file the necessary paperwork with the New York City Department of Finance (DOF) so that she would receive it. As such, Kang sought $10,000 in damages representing the prior years that she did not receive the abatement.
One Level Deeper Douglas Elliman considered Kang’s unit to be “non-primary” and did not file any paperwork with the Department of Finance (DOF) for the years she sublet her apartment.. Although Kang claims that she moved back into the unit after the lease expired in June 2017, she never formally notified Douglas Elliman that the unit was her primary residence, nor did she ever update her mailing address information. Without any such notice from Kang, Douglas Elliman continued to consider the unit “non-primary.”
It was not until January 2021 that Kang formally advised Douglas Elliman that her unit was her primary residence and requested that the necessary paperwork be filed with the DOF so that she could receive the tax abatement. She provided this information in response to a notice that was prepared and sent by Douglas Elliman to all unit owners at the condominium advising them of their potential eligibility for the tax abatement. Kang had claimed that prior to receiving this January 2021 letter, she had not been aware that there was a condo/co-op tax abatement available to her, and this was why she never formally advised Douglas Elliman that the unit was her primary address after moving back in following the sublet (Douglas Elliman had sent similar notices in prior years as well, but Kang did not respond to any of those notices).
Based on Kang’s communication to Douglas Elliman advising that the unit was her primary residence, the management company filed the necessary paperwork with the DOF in time for her to receive the tax abatement for the 2021 year. However, for unknown reasons the DOF still did not award the abatement to her. Kang then commenced this action based on her belief that Douglas Elliman was negligent in applying for her tax abatement for each year from 2016 to the present. The DOF was not a party to this case.
In the Court The Small Claims Court dismissed the case, finding in favor of Douglas Elliman. Although the court found that Douglas Elliman had a duty to submit the necessary paperwork on behalf of the unit owners, Kang failed to establish that Douglas Elliman acted unreasonably in believing that the unit was not her primary residence. Further, once Kang formally advised Douglas Elliman that the unit was her primary residence, the necessary paperwork was filed on her behalf. Kang’s claim that Douglas Elliman had a duty to notify her each year of the tax abatement was also rejected. For Kang She Represented Herself, For Defendant Douglas Elliman Drew Pakett, Braverman Greenspun
