Any person who is a “taxpayer” has a right to file. This includes the owner even if all the taxes are being paid by a tenant. A tenant, who is responsible for the payment of taxes and has a specific right under the lease to do so, can file and pursue a tax appeal. This, however, is a broad statement. In some recent decisions, New York has limited the right of a tenant to bring these proceedings and recognized only the right of a tenant having a substantial portion of the tax liability. The first place to look is the lease. The lease will usually set out – especially for a large square footage tenant – the right of a tenant to bring a proceeding or challenge the assessment.

A mortgagee has a conditional right to file. Where the property is in distress (i.e., foreclosure), the mortgagee would have standing to bring tax review proceedings. Therefore, as a general rule, a mortgagee will be deemed to have standing where the mortgagee has taken possession or assumed management, of if taxes are unpaid by the owner and paid by the mortgagee. A judgment of foreclosure, the commencement of a foreclosure action, or where the mortgagor has assigned its right to file to the mortgagee will also confer standing.

Property in bankruptcy presents a special situation. Trustees in bankruptcy have the right to file proceedings. These proceedings can be heard either in Bankruptcy Court or the state court. Any settlement must be approved by the Bankruptcy Court, as well as retention of counsel and counsel’s fee.

Posted in: Tax Certiorari