Court of Appeals Sets the Record Straight For Commercial Tenants in DCH Auto V. Town of Mamaroneck

September 08, 2022

On June 16, 2022, the Court of Appeals issued its decision in Matter of DCH Auto v. Town of Mamaroneck et al., ruling that a net lessee has the right to challenge real estate tax assessments even though it leases, not owns, the property. The unanimous ruling held that the petitioner, a net-lease tenant, had the right to grieve the tax assessments levied by the Town and Village of Mamaroneck, overruling and finding the Appellate Division, Second Department, erroneously dismissed DCH Auto’s assessment challenges based on its lessee status.

DCH Auto settled a matter of statewide importance in reaffirming the rights of commercial tenants to file complaints pursuant to Real Property Tax Law (“RPTL”) §524 where, pursuant to a net lease, they are contractually obligated to pay real estate taxes on the leased parcel of real property. Historically, a generally accepted tax certiorari principle is that net-lease tenants possess standing to maintain RPTL review proceedings as a party aggrieved by the assessment. However, in DCH Auto, the Second Department restricted the right to file RPTL §524(3) complaints to the property owner or an agent authorized in writing by the owner. As such, DCH Auto deprived a non-owner aggrieved party of standing to file the predicate administrative complaints necessary to obtain judicial review of the assessment.

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Reprinted with permission by the Nassau County Bar Association

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  • Related Practice Areas: Tax Certiorari & Condemnation
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