Four Family Brownstones Getting Slammed
We received a bunch of emails about this article over the weekend for obvious reasons. The city is clearly over-penalizing people who want (or need) to divide their brownstones into four units. They also are creating an adverse incentive not to play by the book in performing renovations since the trigger for these massive tax…
We received a bunch of emails about this article over the weekend for obvious reasons. The city is clearly over-penalizing people who want (or need) to divide their brownstones into four units. They also are creating an adverse incentive not to play by the book in performing renovations since the trigger for these massive tax hikes in most cases appears to be the DOB filings that result in new assessed property values. Rather than harp on the obvious imbalance in the system, we’d like to hear some concrete advice. One is to reduce the number of units from four to three, but that will more than likely result in a drop in income as well. Please share your war stories as well as recommendations of lawyers, expediters and anyone else who could be useful in fighting a steep tax hike.
In Brownstones, Taxes Suddenly Rise [NY Times]
Anyone know more about how a four family house could have a 2 family tax base? I’m in contract on a house now that has that situation. I’m concerned about the tax consequences if it’s determined that it should really have a 4 family tax base. After buying the brownstone, I plan on renovating it to a two family. I’m addtionally concerned that filings with the DOB for such renovations and conversion will alert the Finance Board of this four family w/ a 2 family tax base and trigger a huge tax increase. Also, if they do find that the house should’ve been taxed as a four family, could they charge me with back taxes even though I would be a new owner? Any help would be very much appreciated!!
I think this is a very good idea! We were thinking to do this, but still could not master details. How long did it take for you to convert?
The idea of asking your architect or contractor intentionally to lowball anything in publicly filed documents just so that an owner can keep possible tax increases down is a REALLY bad idea.
A prosecutor could easily bring charges of fraud and conspiracy to defraud and probably a host of other things. If the investigators get wind of it, it will be a race between the owner and the architect to see who will rat the other one out first. Plus, I hate to think what an overzealous prosecutor might do in terms of seeking forfeiture in connection with that filing.
If you plan a renovation in the future. Ask your architect to lowball the estimated renovation cost on the schedule A. This should keep the taxes at bay unless your angry contractor rats you out.
Second, instead of renting and paying a ton of taxes, change your building into condos and sell them. We did and it paid for our reno plus private school plus new car and new mortgage in Sag Harbor. No more landlord issues. 1/3 the costs of upkeep and taxation.
Thanks for the info on landlord/tenant records.
I still think the thread is a good idea.
BTW, doing a free search at 141 Livingston only works if the prospective tenant’s a local; it won’t give you nationwide results.
There are a number of agencies specializing in tenant screening services – you can search them online and buy the reports, but I can’t recommend one in particular. Last year the NYTimes ran an article about First American Registry, which purchases L/T litigation records nationwide and provides that data to landlords, in addition to other checks. Don’t know how long it takes info to get into that type of database. But it’s easy to do your own litigation check. The last time I did one was a few years ago. At that time, in Brooklyn, you just went to the window upstairs at 141 Livingston Street (L/T Court, I forget which floor) where they have the L/T litigation files. It’s all a matter of public record. You give the clerk the name of the prospective tenant, and they check to see if there’s an L/T litigation file on that person. If there is, they let you read it – and make photocopies, if you like. You may have to file a request slip and wait for the file to be pulled from storage, but it’s worth it to avoid a real nightmare.
I believe many RE agents limit their screening of potential tenants to references, credit and sometimes criminal checks, if the landlord requests it. They might run a litigation check as well, upon request. So when dealing with a RE agent, make sure you call the references, and know precisely what checks the RE agency has run, and demand to see the actual reports. If they’re full of unintelligible code numbers, demand the key to the code. Rental agents are generally more interested in getting their fee than in protecting a landlord. When I first bought my house, I almost rented to a tenant (who came through a RE agency) with a perfect credit history and glowing work and personal references. Then I decided to run a criminal check, which the RE agency maintained it couldn’t do. Turned out the reason his credit was perfect was he hadn’t had an opportunity to bounce a check in a long time…he’d just finished doing 10 years for bank robbery.
To the posters who suggested a thread on renter horror stories, I’m all ears. Any chance we could email offline about this? I’m about to rent a floor of our b/s and would love any extra education!
To the posters who suggested a dedicated rental horror stories thread, I’m all ears! (I’m about to buy and rent a floor of a brownstone.)
How does one do a litigation check by the way?