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Keywords

appeallease
appealleasetax law

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Merrick Holding Corp. v. Board of Assessors of Nassau County, 45 N.Y.2d 538, 382 N.E.2d 1341, 410 N.Y.S.2d 565

Facts

Merrick Holding Corp. owned a shopping center in Nassau County and sought to review the property assessment for the tax years 1968-1975. The county's board of assessors had increased the actual rental income by adding leasehold bonuses, reflecting the difference between the actual rents and the higher market rents. The validity of these leasehold bonuses was contested, leading to a series of court decisions, including a reversal by the Appellate Division and a subsequent remand for further review.

Merrick Holding Corp., the owner of land improved by a 29-store shopping center complex in Nassau County, brought this consolidated certiorari proceeding to review the amount at which the property was assessed for the 1968-1975 tax years.

Issue

Whether the board of assessors could appropriately apply leasehold bonuses to the property assessment of Merrick Holding Corp.'s shopping center.

The command of section 306 of the Real Property Tax Law that all property be assessed at full value does not pronounce an inelastic approach to valuation.

Rule

The court held that property must be assessed at full value and that assessors are not confined to a single method of valuation, allowing for the use of leasehold bonuses to reflect the true market value of the property.

To ensure that the existence of varied and multifaceted patterns of land use and ownership does not frustrate the design that each contribute equitably to the public fisc, courts have upheld any fair and nondiscriminatory method that appears most likely to achieve that end.

Analysis

The Court of Appeals found that the board of assessors' use of leasehold bonuses was permissible as it aimed to assess the property at its full value, undiminished by the leases. The court emphasized that the assessment process should reflect the economic realities of the property, allowing for adjustments when actual income does not accurately represent market value.

In doing so, the board fulfilled its obligation to assess Merrick's shopping center at full value undiminished by the leases by which the property was burdened.

Conclusion

The Court of Appeals reversed the Appellate Division's decision and remitted the case for further proceedings, affirming the board's right to use leasehold bonuses in the assessment process.

Accordingly, the judgment appealed from and the order brought up for review should be reversed and the matter remitted to the Appellate Division for further proceedings as provided by CPLR 5613.

Who won?

Merrick Holding Corp. prevailed in the case as the Court of Appeals ruled in favor of allowing the use of leasehold bonuses, which supported their argument for a fair property assessment.

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