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CONDO TAX REBATES, P.2

Condo Tax Rebates, p.2

Some boards — after having their accountant or a volunteer with accounting experience figure out the rebate percentages, based on how much each owner paid during the covered period — set up an escrow account "in case these people resurface," says CPA Cesarano.

Must you look for them? "I'm not aware of any legal requirement for a condo to use heroic efforts to track people down," says veteran real estate attorney Bruce Levinson, in private practice in Manhattan. "If you use the last known address, I think you will have fulfilled your legal obligations. As a courtesy, you might ask the current owner to look at their contract of sale and see if there's a forwarding address for the seller, or alternatively, an address for the attorney who handled the closing for the former owner and might still be in touch with them."

Attorney Martin Friedman, a partner at Sonnenschein, Sherman & Deutsch, agrees. "The condo board should send a letter to the last known address of the prior owner. Presumably, they got a forwarding address at the closing."

Beware: If the board gives the rebate to a new owner who hadn't paid the original tax, that's considered "unjust enrichment" under the law. Indeed, notes Levinson, "Ofttimes, there's a rider in the contract of sale obligating the buyer to remit to the seller any refunds received post-closing, which arose out of taxes paid prior to transfer of ownership."

"I don't think anyone could make the case that locating the sellers and sorting out these few transactions is any more difficult than correctly apportioning refunds to those who have paid," says one former Manhattan condo board president. "I know if I were the guy left out and missed a $2,000 refund, I'd be plenty upset."

That said, it's every taxpayer's responsibility to be aware of his or her own tax payments and to check the publicly available record (see sidebar) occasionally to see if one's old condo unit was issued a rebate.

Ultimately, it comes down to transparency. Tax assessments, rebates, and pro rata calculations based on calendar dates and exemptions are complicated. Boards and their professionals may not get these things perfect. But they can make their processes and reasoning clear. As Cesarano says simply, "You put out a memo explaining what you're doing."

 

Adapted from Habitat May 2009. For the complete article and more, join our Archive >>

 

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