As we explained in our case summary, the question in this case is whether counties must reimburse towns for unpaid property and demolition charges. In a unanimous opinion, the Court (DiFiore, C.J.) held that Real Property Tax Law § 936 requires counties to reimburse towns for such charges.
Under the Town Law and Municipal Home Rule Law, towns may pass local laws directing property owners to maintain the property (for instance, to undertake lawn care) and to demolish hazardous buildings. If property owners fail to do so, towns may perform the work themselves or hire contractors to do so and may then charge the property owners for the cost. Towns that assess these charges may then place a lien on the property.
The Towns of Irondequoit and Brighton have local laws directing property maintenance and demolition. They have requested that Monroe County reimburse them for unpaid charges for work that property owners refuse to perform, for which the Towns ultimately bear the expense. The Towns grounded their reimbursement requests on Real Property Tax Law § 936, which requires counties to reimburse towns for “unpaid delinquent taxes.”
Until 2016, Monroe County reimbursed the Towns. When it stopped doing so, the Towns brought an article 78 proceeding.
The Court sided with the Towns. The County urged the Court to hold that the maintenance and demolition charges fell outside § 936’s scope, claiming that the charges were “special assessments,” which fall outside the definition of “tax” in Real Property Tax Law § 102(20). But the Court disagreed. Section 102, the Court observed, provides that its definitions apply “unless otherwise expressly stated or unless the context requires otherwise.” And here, context requires otherwise. As the Court explained, § 936 refers to “unpaid delinquent taxes.” “Delinquent tax,” in turn, is defined elsewhere in the Real Property Tax Law: in § 1102(2), a section that refers to § 936. Section 1102(2) defines “delinquent tax” to include “a special assessment or other charge imposed upon real property by or on behalf of a municipal corporation . . . relating to any parcel which is included in the return of unpaid delinquent charges pursuant to section [936].” The Court noted that the unpaid charges could be “special assessments” or “other charges.” Either way, they would qualify for reimbursement under § 936.
The Court also noted that its decision accords with the Legislature’s intent. Under Real Property Tax Law § 1123(2)(a), only counties may bring foreclosure actions to “enforce the payment of delinquent taxes or other lawful charges which have accumulated and become liens against certain property.” And under Town Law § 64(5-a), the same rule applies to unpaid maintenance and demolition charges. So “the Legislature, recognizing that towns have little power to recoup their costs for unpaid real property tax liens, has shifted the risk of loss to counties, which are in the best position to recover the funds.”