Q&A: Use of the STAR Abatement

Q Our co-op owners were just notified that the board has decided to appropriate the New York state School Tax Relief (STAR) tax abatement due to us for 2001/2002 and 2002/2003 as an assessment to do work on the building. Is this legal? We are also getting a maintenance increase as of April 1st.

I applied last August for the Senior Citizen Homeowners’ Exemption (SCHE) property tax exemption, for which I qualify on all counts—over 65 years, income below maximum level, etc. I understand that if I get this relief I automatically qualify for the “enhanced STAR” exemption. Although I mailed the applications last August, I’ve had no response, nor has my managing agent heard anything from the city.

Please give me any advice on this matter—especially about the board’s confiscation of our two STAR refunds and calling them assessments.

—Manhattan Shareholder

A According to Attorney Kenneth Jacobs, a partner at Smith, Buss & Jacobs, LLP, with offices in New York City and Yonkers, “The STAR exemption program, as applied to cooperatives, provides that the assessor will credit the individual exemption against the taxes assessed against the building. After receiving the exemption, the cooperative corporation is to credit the reduction in real property taxes attributable to each eligible shareholder against the share of the co-op’s taxes otherwise chargeable to the shareholder.

“Only shareholders of the cooperative who use the unit as their primary residence are eligible for STAR. Based on information previously furnished by the co-op, the municipality usually credits the rebate and provides a list of eligible shareholders to the cooperative, together with the credit allocable to each.

“Many cooperatives elect not to return any money to their shareholders. Instead they take a “shortcut” by assessing all shareholders roughly the amount of the credit, and apply the STAR credits due to individual shareholders against the assessment. Since all shareholders must be assessed equally based on their share ownership, though, this leads to some inequities. For example, a shareholder that does not use the unit as his primary residence will have to go out-of-pocket again to pay the amount of the assessment rather than having a credit applied. On the opposite end, if a shareholder is entitled to an “Enhanced STAR” credit (which exceeds the typical STAR credit), they may still be entitled to a credit even after applying the assessment.

“You probably fall in the latter category now, even if you didn’t in 2001/02 or 2002/03. Therefore you should ask management to verify the amount of the credit that you are entitled to and the proportional share of the assessment. If they don’t match, you should get an additional credit. The bottom line is that the credit and the assessment should be applied separately in order to avoid inadvertent overpayments by shareholders.

“I also note that many cooperatives are caught short in maintenance due to the STAR credit and other municipal real estate tax rebates. They take only their net real estate taxes into account in setting their budgets. Therefore, when it comes time to return money to individual shareholders they scramble for funds and have to impose the additional assessment.”

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13 Comments

  • You stll don't say if this is an illegal practice nor how to stop them.
  • i only receive the STAR (no enhancements). i received my maint bill for July and the credits were applied but the coop also assessed each shareholder $.73 per share. therefore my rebates (STAR and property tax rebate) was less than the $.73 assessment meaning my maintenance and the maintenance of other shareholders who receive STAR was between $10.00 to $22.60 more than the credits applied to our maintenance bill payable over a 6 month period. therefore, those who pay the 22.60 will over 6 months pay a total of $135.60 more than the amount of the credits received. we were told it was to be a "wash" that the credit would be equal to the assessment but it was not. if the STAR appropriated to each shareholder how does the city of ny figure the actual STAR abatement, on a share basis or is it another formula?
  • i am trying to find out when my coop 1st entered the star abatement program. WTHDFC is located at 465-483 17st. ty
  • What is the legal monthly application for the Star to be applied to Shareholder's Maintenance. Is it 3, 6, 8, or 12 months?
  • My co-op take's my star money, Is this legal
  • My question. Is this legal for the coop management to take 27 years of my STAR abatement without any notice regarding the taking to offset their management expense or whatnot ? Please respond. So many of us have the same question and yet do not get an yes or no on legal or not, from you.Why? it's a simple question of yes it is or no it's not legal. Could you answer this question once and for all?4j csf e
  • As president of my coop for 15 years I am always asked about the Star abatement and assessments. We have found that it's just easier to assess when necessary at the same time we appropriate the exemption. We have not done so every year, only when suggested by our accountants to build up our operating funds. We are not really assessing the abatement just recovering funds as needed. It has never been a legal question as our proprietary lease allows for assessments as necessary.
  • There is a bill pending (A4090) that requires board of directors to distribute the STAR exemption in a timely fashion .If not the entitled shareholder can withhold their maint. until they recoup their STAR exemption. Also the board can be fined $500 for each violation.
  • I have not received my rebate although all other coop owners have received theirs 5wo months ago
  • If the coop and my management know that I use my residence as a primary, but they still bill me the amount of the assessment which is meant to be cancelled out by the abatement, are they double dipping?
  • I purchased my Co-op in 2013 and had received a notice in the mail addressed to "Property Owner" w/my address on it asking to register for the Star Rebate program online. I included all of my information, including SS# and was given a confirmation #. I thought I was good to go. However, this May 2015, my cooperative will start giving out the rebate and I'm not on the list. It shows up that my Star Rebate information is still under the previous shareholder's name. I didn't know I had to fill out a form and send it to my assessor. The instructions never mentioned anything about what "new owners" need to do. Can I fight this so that I can get my rebate this year?
  • My concern about the legality of a coop's grab-back is that an exemption granted me (credited), based on my being qualified for that exemption, is taken away (assessed) and the benefits effectively distributed to all shareholders. However, not all shareholders are qualified for STAR, so why are they allowed to benefit from my exemption? How is that justified legally? Put another way: The assessment has all the appearance of a discriminatory act that seizes a STAR-qualified owner's benefit and effectively distributes it to benefit non-qualified owners.
  • ive lived in my coop for 30 yrs-i am 65yrs old- wi received my bill for june with a letter that I will be charged 12.78 per share-55 shares-on junes bill-don't I qualify for a rebate not an assessment? I live in nyc 10025 ny thank you