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Zoning Violations Preclude Property Tax Exemption for Religious Corporation

The Appellate Division upheld a Supreme Court determination granting summary judgment against a not for profit religious corporation seeking a real property tax exemption on property it owns and uses for religious purposes. In Congregation Ateres Yisroel v. Town of Ramapo, the Court held that the failure of the religious corporation to obtain permits for the occupancy of structures on the property precluded the granting of a tax exemption.

The property at issue was originally granted a certificate of occupancy as a single family residence in 1954. Sometime thereafter, the property was acquired by the not for profit religious corporation. From 2008 through 2011 the property was granted a real estate tax exemption by the Town. The decision does not explain why the exemption was issued or exactly what changed. However, in 2012 when an application for renewal of the exemption was submitted, the Town denied the renewal of the tax exemption. The Corporation commenced this action challenging the denial and the Supreme Court granted the Town’s motion for summary judgment dismissing the claim.

In upholding the decision of the lower court, the Appellate Division determined, despite the fact that the Corporation met the criteria for a not for profit religious corporation and owned the property at issue, the lack of zoning compliance precludes a tax exemption.

“‘Real property owned by a corporation or association organized or conducted exclusively for religious, charitable, hospital, educational, or moral or mental improvement of men, women or children purposes . . . and used exclusively for carrying out thereupon one or more of such purposes . . . shall be exempt from taxation as provided in this section” (RPTL 420-a[1][a]). “In order for an entity to be entitled to this tax exemption, (1) the entity must be organized exclusively for purposes enumerated in the statute, (2) the property in question must be used primarily for the furtherance of such purposes, . . . (3) no pecuniary profit, apart from reasonable compensation, may inure to the benefit of any officers, members, or employees, and (4) the entity may not be simply used as a guise for profit-making operations” (Matter of Miriam Osborn Mem’l Home Ass’n v Assessor of City of Rye, 275 AD2d 714, 715; see Matter of Mount Tremper Lutheran Camp v Board of Assessors of Town of Shandaken, 70 AD2d 984, 985). However, even where an entity otherwise meets the foregoing test, such entity’s “use of [its] premises in violation of [the local] zoning law prohibit[s] it from receiving a property tax exemption pursuant to RPTL 420-a” (Congregation Or Yosef v Town of Ramapo, 48 AD3d 731, 732; see Matter of Oxford Group-Moral Re-Armament, MRA, Inc. v Sweet, 309 NY 744).
Here, the defendants established their prima facie entitlement to judgment as a matter of law by demonstrating that the plaintiff’s use of the property violated the Town zoning law, thereby prohibiting the plaintiff from receiving a real property tax exemption pursuant to RPTL 420-a (see Zuckerman v City of New York, 49 NY2d 557, 562). The defendants’ proof established that the plaintiffs had illegally erected two trailers on the property without obtaining the proper permits and, during the relevant time period, used the primary structure on the property as a dormitory and living quarters for over 20 students in contravention of its certificate of occupancy (see Congregation Or Yosef v Town of Ramapo, 48 AD3d at 732; cf. Community Humanitarian Assn., Inc. v Town of Ramapo, 137 AD3d 736, 738)”

– Steven Silverberg