Real Property Income and Expenses New Finance Rules Changes

The New York City Department of Finance (DOF) utilizes income and expense information to estimate a property's market value, which in turn is used to calculate the real estate taxes levied thereon. The DOF culls this information from a variety of sources, most notably the Real Property Income and Expense Form (RPIE). Now is the time of year when your managing agent typically completes your RPIE Form, and there is some good news in that the due date has been postponed from what had generally been an early September deadline to September 20, 2004. The reason for the delay is to afford owners the opportunity to comply with the newly "streamlined" filing requirements. While many filers will appreciate that the multiple forms and addendums previously required have been consolidated into one newly designed RPIE Form, those who were previously exempt from filing may not feel as fortunate as they too are now subject to certain reporting requirements. This latter group includes cooperatives that are either exclusively residential or have less than 1,000 square feet of commercial space and any properties with an assessed value below $40,000.

September 20th Filing Deadline

Up until recently, when a cooperative was exempt from filing, exempt meant exempt. Additionally, the DOF published an RPIE Status checklist by block and lot number, whereby owners could check a property's filing status and whether any further action was required. I do concur that the process for commercial buildings and for cooperatives with more than 1,000 square feet has greatly improved. However, the new reporting process now requires all income producing properties to partially complete the RPIE Form, thereby providing the DOF with updated owner and contact information, as well as to indicate and re-confirm the reason for their exempt status. While these new requirements are certainly not onerous, the tricky part is to be aware of the change.

Some cooperatives are aware of the change. Mary Ann Rothman, the executive director of the Council of New York Cooperatives & Condominiums (CNYC) worked with the Department of Finance to publish a memo which was sent to the council's members and subscribers and which offered a most helpful and comprehensive analysis of the new filing requirements.

The Department of Finance's goal is to improve the valuation process, making it simpler and fairer, which includes being able to assess cooperatives and condominiums in a manner that would equate their values to those on small homes. In concert with this, an RPIE-EZ Form is additionally being offered to owners of exempt properties not legally required to file an RPIE, but who may still want to provide information about their properties.

The EZ Form, however, is still very involved. It asks for property use and vacancy information, including such details as gross square footage, which in our experience is something cooperatives have difficulty in determining. The DOF is strongly encouraging exempt properties to complete the RPIE-EZ. Hopefully by doing so, some future benefit would be derived and your efforts rewarded. Forms are available on the DOF's website at www.nyc.gov/finance. No matter what you decide, failure to file an RPIE could lead to penalties and also impede any real estate tax reduction proceedings commenced in the future.


Stephen Beer is a certified public accountant with the Manhattan-based firm of Czarnowski & Beer.

Related Articles

Financing Investor-Held Condominium Units

What You Should Know When It Comes to Loans and Choosing a Mortgage Expert

Inadequate Reserves

The Risks of Not Keeping Up

New York City Co-op and Condo Tax Distribution

Abatements and Exemptions