Owners and managers of New York City property should take notice that the City has become more serious about issuing statutory penalties for non-filing or incomplete filings of the annual RPIE (Real Property Income and Expense) statement with the NYC Department of Finance.
What is the RPIE? Owners of income-producing properties in New York City must file an annual RPIE statement online with the Department of Finance (a property manager can file it on the owner’s behalf). This income and expense information allows the City Assessor to estimate the value of every property in New York City. The Department of Finance also uses this valuation (based on information provided by owners) to assess income-producing properties such as office and apartment buildings. Since these valuations are annual, assessed property values can, and historically do, change yearly.
An RPIE statement is required for all income-producing properties with an actual assessed value of more than $40,000. This includes commercial properties such as office buildings and retail stores, industrial sites, as well as certain residential properties, including rental apartment buildings, co-ops and condominiums.
Historically, the City has been inconsistent in pursuing penalties against late or non-filers, however, the City has recently stepped up its enforcement efforts. Some property owners that meet the RPIE filing requirement, but did not file an RPIE, have seen dramatic increases of their property assessment.
Owners can also claim an “exemption” but must still submit an RPIE statement indicating the property’s exempt status or penalties can apply. Examples of exempt properties include exclusively residential properties with 10 or fewer apartments, properties with six or fewer residential units and one commercial unit, properties that are owner occupied, and vacant or uninhabitable property. If a property was recently purchased or operated for less than a full year, an owner can file the RPIE statement showing less than a full year’s income and expense. While a property may qualify for an exemption to the filing requirement, an RPIE statement must still be filed.
Penalties can be severe. Failure to file, non-compliant filing, or non-timely filing may result in a penalty of up to 3 percent of the assessed value of the property or up to 5 percent for consecutive non-filings. In addition, delinquent filers seeking a reduction in assessments face disqualification from hearings before the Tax Commission.
This year’s RPIE is due on September 1, 2011. The form must be submitted electronically here unless you have been granted a waiver (which had to be requested by August 2, 2011) allowing an owner to file a paper version.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.