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February102021
Important Factors When Contesting 2021/22 Tentative Assessed Property Value

Mitchell G. Marcus, CPA, Partner

02.10.21 | Assurance Chat

Contributing: Shirley Hu, CPA and Allesan Palumbo, CPA

As property owners and operators prepare applications to contest their 2021/22 Tentative Assessed Property Value with the New York City (NYC) Tax Commission, here are a few important factors to remember when submitting your filing:

Form TC101 is due by March 1, 2021 for class 2 and 4-properties, other than condominiums. The NYC Tax Commission is no longer mandating an original signed form to be submitted. You can submit it via email or mail. However, the page 2 signature must be hand-written; no electronic signatures are permissible. The notarized TC101 should be provided directly to your certiorari attorney.

Form TC201 is due by March 24, 2021.

Along with Form TC201, Form TC159 must be submitted with Form TC201, and updated through the hearing date, to explain any of the following situations listed below:

  1. Operating loss
  2. More than 10% decrease in gross income
  3. Continuing vacancy of 15% or more
  4. Decrease or increase in operating expenses of 15% or more over the previous year’s expenses
  5. Average monthly rent per apartment of $650 or less, or $850 or less per apartment in Manhattan on or south of 110th Street
  6. Repairs and maintenance higher than 15% of gross rent
  7. More than 15 percentage point increase in vacancy
  8. Residential rent roll times 12 less than total residential income
  9. Residential rent roll times 12 is 110% or more of total residential income
  10. Residential rent roll times 12 equals precisely total residential income

Support for these items should be submitted to your certiorari attorney and be continuously updated through the date of your hearing with the NYC Tax Commissioner if circumstances change throughout 2021.

Examples

If vacancies did not exceed 15% at time of the initial application, but increased after filing and before your hearing, provide your certiorari attorney with updated information related to this change.

Or if any other changes occurred relating to the situations noted above, provide supporting information to your certiorari attorney before your hearing.

In addition to the above 10 items, explanations must be provided to your certiorari attorney by the time of your hearing for the following 3 items reported on your TC201:

  1. Wages higher than normal for the type of property or level of income
  2. Total commercial rent that is substantially below market rental levels
  3. Apparent inconsistency between Real Property Income and Expense Statements and Tax Commission Income and Expense (which were due July 1, 2020 and submitted to the Department of Finance) information in the property’s owner-occupied status

Due to the potential of significant fluctuations to properties’ income, expenses and occupancy in 2020 and 2021, resulting from COVID-19, it is crucial to provide as much detail regarding these variances to your certiorari attorney as soon as possible, as these are key areas investigated by the NYC Tax Commission. Further, as the pandemic is still ongoing, and events and circumstances may further change even after initial application filing, it is important to update these items frequently until your scheduled hearing with the NYC Tax Commission.

If you have any questions, I can be contacted at 212.331.7460 | mmarcus@berdonllp.com or reach out to your Berdon advisor.

Mitchell Marcus, an Audit Partner and member of the Real Estate Practice Group, has been with Berdon LLP for more than 17 years. He has extensive accounting and auditing experience in various real estate and related industries. In addition to providing GAAP and income tax basis auditing and financial reporting services, he advises on operations and internal controls of businesses.

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