Real Property Law Section Blog

The New York City Real Property Transfer Tax Return has been revised effective June 8, 2009 to add a new Schedule "I", captioned "Transfers Pursuant To A Separation Agreement, Marital Settlement Agreement Or Divorce Decree". According to an announcement posted on the Department of Finance's website, at http://nyc.gov/html/dof/html/jump/acris.shtml:

"Changes to the E-Tax application Real Property Transfer Tax Return (RPT) section Effective June 8, 2009

"Starting June 8, 2009 ACRIS customers that use the E-Tax application will see a new schedule in the Real Property Transfer Tax Return (RPT) section. The new schedule, Schedule I, will be required if the Condition of Transfer is "Transfer pursuant to marital settlement agreement or divorce decree". If the Condition of Transfer is “Other”, the new schedule will be optional. For all other Conditions of Transfer, the new schedule will not be displayed. The Schedule I will be grouped together with other Alpha schedules and will be placed between Schedule H and M".

Under Civil Practice Law and Rules ("CPLR") Section 5203 ("Priorities and liens upon real property"), a judgment is a lien for ten years on real property of the debtor in the county in which the judgment is docketed. The judgment may be renewed for an additional ten years pursuant to CPLR Section 5014 ("Action upon judgment"), which provides that "[a]n action may be commenced…during the year prior to the expiration of ten years since the first docketing of the judgment. The judgment in such an action shall be designated a renewal judgment. The lien of a renewal judgment shall take effect upon the expiration of ten years from the first docketing of the original judgment".

In a case decided by the New York State Court of Appeals on May 12, 2009, the Plaintiff's judgment was docketed in New York County on October 23, 1991. Before the ten year lien period expired, the judgment creditor brought an action to obtain a renewal judgment. An Order renewing the judgment nunc pro tunc dated as of October 23, 2001 was docketed in 2005. In 2003, however, after the ten year lien period for the judgment had run and before the renewal judgment was docketed, the judgment debtor executed two mortgages on a condominium unit he owned in Manhattan. The mortgagees sought an order either vacating the nunc pro tunc treatment of the renewal judgment or declaring that the liens of their mortgages were prior to the lien of the renewal judgment.

The Supreme Court, New York County, in a decision reported at 2007 WL 2119748, denied the mortgagees' petition. The Appellate Division, in a decision reported at 854 N.Y.S. 2d 10, reversing the Order of the lower court, granted the petition, held that the renewal judgment was entered as of the date it was granted, and declared that the liens of the mortgages were prior to the judgment. The Court of Appeals affirmed the decision of the Appellate Division. "Because CPLR 5014 does not provide for a renewal judgment to have retroactive effect to the original lien's expiration date and because nunc pro tunc treatment is inappropriate where, as here, additional lenders relying on the public record acquired rights in the property, we hold that the renewal lien becomes effective when granted by the Supreme Court". The Court of Appeals decision in Gletzer v. Harris is reported at 2009 WL 1285970.

New York City's Department of Finance has announced a revised procedure to obtain its approval of applications submitted for new condominiums and the related issuance of tax lots to be effective on June 1, 2009. This will involve the following:

1. Completion of a new "Condominium Apportionment Worksheet". This will be an Excel spreadsheet to be downloaded from the Department's website at nyc.gov/finance. The Worksheet will be emailed to a specified email address at Finance. A confirmation of submission will be printed and included with the completed "Condominium Package" being submitted to Finance's Tax Map Unit. The Worksheet online will include a tab for Explanatory Notes.

2. The completed "Condominium Package" being submitted is to include Form RP-602C (Revised 5/8/09), an "Application for Condominium Apportionment and Approval", two copies of signed, sealed and notarized floor plans, two copies of the condominium declaration and floor plans signed and notarized and with exhibits, the Attorney General's Office's acceptance letter or no-action letter, and confirmation of the electronic submission of the Condominium Apportionment Worksheet.

3. The Tax Map Unit will only accept legible Condominium Floor Plans on 8 ½ " X 17" paper suitable for scanning. Mylar floor plans will no longer be accepted.

4. New tax lot numbers will be issued instead of tentative and final tax lot numbers. A single fee of $73.00 will be charged for the issuance of new tax lot numbers. (This will apply to the issuance of new tax lot numbers, whether or not involving condominium units).

In a press release issued February 2, 2009, The City of New York announced a program to require architects and engineers filing applications for new buildings or major enlargements of existing buildings to upload to the Department of Buildings' website a new Zoning Diagram Form ZD1 and other documents when building plans are filed. The Zoning Diagram will detail "critical information that can be used by the public to determine whether a project is in compliance with required zoning regulations". There will be a thirty-day period following the document upload within which the public can challenge the proposed development. The ZD1 is not required for applications for which the initial document reached "application processed" status prior to March 9, 2009. The press release, announcing that New York is the "First City in the Nation to put Development Diagrams Online", is posted on the City's website at http://www.nyc.gov/html/om/html/2009a/pr055-09.html.

New York State's Budget, enacted on April 7, 2009 as Chapter 56 of the Laws of 2009, amends Subdivision "3" of Real Property Law Section 333 ("When conveyance of real property not to be recorded") to increase the filing fee for the State Board of Real Property Services Real Property Transfer Report, generally known as the RP-5217 and the RP-5217NYC or as the Equalization and Assessment Form. The increased fees are required for all deeds submitted for recording on and after June 1, 2009. When the property being transferred is a “Qualifying residential property” or a “Qualifying farm property” the filing fee will increase from the $75.00 now being charged to $125.00. The filing fee for the transfer of any other type of property will increase from the $165.00 now being charged to $250.00. The fee to file the New York City Real Property Transfer Tax Return when the Equalization and Assessment form is not required to be filed, such as on the transfer of a cooperative interest or of a controlling economic interest, will increase from $50.00 to $100.00

“Qualified residential property” is defined in Section 333 as property which satisfies at least one of the following conditions:

1. The property classification code assigned to the property on the latest final assessment roll, as reported on the transfer report form, indicates that the property is a one, two, or three family home or a rural residence, or

2. The transfer report (Equalization and Assessment) form indicates that the property is one, two or three family residential property that has been newly constructed on vacant land, or

3. The transfer report (Equalization and Assessment) form indicates that the property is a residential condominium.

“Qualifying farm property” is defined in Section 333 as property for which the property classification code on the latest final assessment roll, as reported on the transfer report (Equalization and Assessment) form, is in the agricultural category.

The New York City Register has advised a committee of the New York State Land Title Association that Condominium Declarations and Floor Plans may now be submitted for recording in any of the offices of the City Register, regardless of the County within the City (excepting Staten Island, which is not a part of the City Register's office) in which the property is located. In addition, the Department of Finance intends to require that all condominium Floor Plans be submitted to the City Surveyor's Office on 8 ½" X 11" sized paper, enabling their recording and viewing in ACRIS (the Department's "Automated City Register Information System").

The City Register has advised that the effective date of this change is presently intended to be June 1, 2009 and that the Department of Finance will issue a notice of the procedure before the effective date.

The 2009 versions of New York State Department of Taxation and Finance's Non-Resident Real Property Estimated Income Tax Payment Form ("IT-2663") and "Non-Resident Cooperative Unit Estimated Income Tax Payment Form" (IT-2664") have been revised to reflect the recent change in the applicable personal income tax rate on the sale or transfer of real property in New York from 6.85% to 8.97%. The prior versions of these forms for 2009 are not to be used as doing so would incorrectly calculate the tax.

A box in the upper right corner of the forms identifies the version to be used by reference to "(4/09").

The previously issued Instructions for 2009 have not been changed.

The revised forms can be obtained on the Department's web site at http://www.tax.state.ny.us/forms/form_number_order_income.htm

New York State's Budget, Chapter 56 of the Laws of 2009, has changed the interest rates to be charged on late payments and assessments for the mortgage recording tax and the State's Real Estate Transfer Tax effective April 7, 2009. The interest rate for late payments and for assessments is 8% per annum compounded daily for the period April 1, 2009 through June 30, 2009. The rate for the period January 1, 2009 through March 31, 2009 was 7% per annum compounded daily, and the rate for the period April 1, 2009 through April 6, 2009 was 6% per annum compounded daily. The interest rate for refunds for the period April 1, 2009 through June 30, 20098 is 3% per annum compounded daily. The Department of Taxation and Finance's press release is posted at http://www.tax.state.ny.us/press/2009/int0409.htm.

Memoranda drafted by members of the Real Property Section's Legislative Committee on Bills under consideration in the New York State Legislature are posted to the www.nysba.org at the following address:

http://www.nysba.org/AM/Template.cfm?Section=Legislative_Memoranda_2009_20101&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=25717

The Office of Counsel of the Advisory Opinion Unit of the New York State Depatment of Taxaton and Finance has issued an Advisory Opinion on the application of the mortgage recording tax to a mortgage made to an exempt entity which is assigned immediately after the mortgage is recorded to the true lender. See TSB-A-09(1)R, dated March 17, 2009 at http://www.tax.state.ny.us/pdf/advisory_opinions/mortgage/a09_1r.pdf.