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NYC requests asbestos info on RPIE statement.

While the New York City Real Property Income and Expense statement filing date has been changed to Oct. 1, the city is attempting to compile data on asbestos contamination in buildings for use in real property tax assessments.

An asbestos notification form, subject to public disclosure, is included as the last page of the Real Property Income and Expense Booklet sent to owners last week. The city's chief assessor says the information will be used to reflect the economic effects of contamination in upcoming assessments but an attorney cautioned that completing this form could cause other problems for the owners.

This information is being requested directly as a result of the One New York Plaza case, confirmed Assessor, Patrick M. O'Connor. Although under appeal by the city, the lower court awarded $369 million in assessment reductions to the owner primarily as a result of asbestos contamination.

In discussing the inclusion of the form in the RPIE booklet, Deputy Commissioner of Finance, Manuel Pardo, said "We would like to identify those buildings with asbestos problems and we thought this would be a quick way to identify them." Although the RPIE forms are to be filed by Oct. 1 at the 25 Elm place, Brooklyn, processing center there is no due date for the asbestos form which is also to be returned separately to the chief assessor.

The survey would give the city another way to analyze the impact of asbestos should anybody else contest an assessment because of asbestos, O'Connor noted. The forms allow more input from the taxpayers and will give the city a better idea of how extensive asbestos contamination is in the city. He said they will also enable the assessors to reflect mitigating expenses in the assessments.

Some asbestos is better off to be left where it is, O'Connor added, if it is properly sealed up. Where there are problems of airborne asbestos, he said , steps have to be taken to remove it and these costs could be reflected as expenses.

Joel Marcus, a certiorari partner with Pottish & Freyberg, is one of the attorneys who tried the One New york Plaza case which is formally known as Bass vs. Tax Commission. Marcus said the notification form itself solicits information and admissions which can be used against the building owner. One question, for instance, asks, "How has it affected tenancies?"

"It is not the job of the taxpayer to demonstrate to the city, before it's assessed, that there is or is not, an asbestos problem," Marcus said, "but it would be to their advantage to let the city know."

In a letter to his clients, Marcus said, he is recommending that they exercise extreme caution in filling out the form. "My preferences is that it should not be supplied where it is discoverable, but provided to the attorney so that it can be disclosed in a more confidential manner to the proper authorities," he said.

In the past, the city has not recorded this information, but the new computer data base system, known as CAMA (Computer Assisted Mass Appraisal), will allow the city to keep track of more property characteristics, O'Connor said. Programs also will help assessors calculate assessments using different standard appraisal approaches. "They have to maintain more information but it will be better for the assessors and the taxpayers as we go along," he added.

Assessors as we go also not specialists in asbestos or its removal, O'Connor noted, and while the assessors are not going to be "looking through drywalls," O'Connor said he thought if taxpayers had serious concerns about the amount of asbestos, "we should have a form for them to fill out."

Marcus said he is concerned about the way the city is asking for this information because, since the income and expense reporting law does not cover the asbestos questionnaire and the city admits this is the case, it is not confidential. "The danger is that people who complete the form might be put on a list of contaminated buildings," he said. "And this listing does not indicate the gravity, which might be slight or great, or the efforts made by the owner to remedy the problem. Nonetheless, the stigma and chilling effect on tenants and purchasers and lenders could be serious."

The information is subject to public disclosure and, O'Connor said, "if an owner does not want to fill this out, that is their prerogative." Where this might be a problem, he said, information could be supplied on the actual RPIE form, which is not subject to disclosure.

O'Connor said the form is to the taxpayer's advantage from an assessment point of view but as the lawyers are pointing out, he said, the owners might not be able to disclose the information without it becoming public. O'Connor also noted that Tax commission documents are subject to public disclosure and a court case would also be public.

Marcus said, "The ultimate determination by the taxpayer and the court is whether the presence of asbestos impacts the value of the property. Whether or not the taxpayer has provided the information, the fact that there might be an asbestos related problem would be taken into account whenever the information was made known, even on the eve of trial."

"We're trying to make an honest effort to identify where the asbestos exists and come up with some reasonable reduction in value," O'Connor noted. "If an owner had costs we want to know how to evaluate them. It would be an extraordinary expense towards income but in calculating value, we would want to be able to use that information." But, he said, through the information, the city might also discover that a building of a certain age might be renting for less than its neighbor because of the age of the building and not due to the asbestos contamination.
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Title Annotation:Real Property Income and Expense
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Aug 7, 1991
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