When you say co-op or condo... which is it?

For a co-op, maybe you should point them to this:

https://www.nysenate.gov/legislation/laws/RPT/467-A 6:

6. The commissioner of finance may impose, after notice and an opportunity to be heard, civil penalties on each member of a cooperative board of directors of no more than ten thousand dollars for the willful failure to credit fully any tax abatement granted pursuant to this section to eligible dwelling units.

Also, you might find it helpful to obtain the relevant renewal and change and tax benefit letters to see what is going on. You can do this with a FOIL request:

https://a860-openrecords.nyc.gov/

This is explicitly permitted/available under 467-A 8. Once you have the tax benefit letter, you can always just show up with it at the next annual meeting.

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Hi Phil -

Thank you for posting this. When DM first mentioned a deadline I had never heard of any civil penalties enabled in the legislation. This clears it up nicely.

Unfortunately, this particular section of 467-A is silent on how long a period of time must transpire before non-action by the board is considered "willful failure to credit fully any tax abatement." You wouldn't happen to know if a time limit is called out anywhere in this or other legislation?

Thanks!
--- Steve

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No coop or condo board has the legal authority to delay the credit of the abatement to eligible units past the required time.
It is bad enough that it has become routine to commonly assessed for the abatement as the idea was to equalized taxes for unit owners.

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I believe if you take a second look at the simple math, the abatement does equalize taxes with single family homes compared to co-op's. The state giving money back to a building does defray the cost of projects compared to asking shareholders to dig into their pockets, which is what they would have to do if the abatement wasn't eventually directed at paying for building costs.

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In most coops, you don't actually net any money from the abatement. It's typically flattened with an offsetting assessment in the same billing cycle. The abatement is "vapor money" that results in a reduced tax bill for the building, not actual cash that the coop is given to disburse.

That said, it is of course obligatory for coops to credit the abatement as a line item in your billing, even when it is immediately offset by a corresponding assessment. But it's not a hidden pot of gold that's being withheld; it's an accounting issue. It should definitely be credited/assessed within the fiscal year to ensure the accuracy of your annual financial report.

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I'd like to add a brief coda to Carl's good response, and answer a question I am asked every year. Why are the abatement amounts and the assessment amounts not the same?

The answer is that each is calculated by entirely different sets of rules by entirely different organizations.

Each apartment abatement is determined by the Dept of Finance using complicated algorithms. Two seemingly identical apartments can be granted very different abatement amounts. The list from the DoF is sent to either the co-op or the managing agent.

Assessments on the other hand must treat each share equally, by law. What most buildings do is divide the total amount of the abatement by the total number of shares, and assess each unit by the number of shares it owns.

The two are *never* the same. Some shareholders gain and some lose. If your abatement and assessment are identical, your managing agent did something very wrong.

I hope this helps new board members and especially new treasurers deal with those shareholders who end up in the loss column.

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