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No Tax Free Lunch

taxes1“How could this have happened?”

I thought that the distraught voice at the other end of the line was going to tell me that someone had been run over by a bus, though not recognizing who it was, I wondered why he’d be calling to tell me about an accident involving someone I didn’t even know.

 “Huh?”

 “They emptied out our bank accounts and didn’t pay hundreds of thousands of dollars in real estate tax.”

Once I understood that the victim was a building, not a person, I knew why I’d been contacted, not that it made the news any less incredible

 I’m going to skip over the part about the barren bank accounts and go direct to the non-payment of taxes because there’s just so much bad news anyone can digest in a day.

You gotta pay your taxes.  I’m not telling you anything you don’t know. If you don’t, the IRS will make your life miserable until you do. It’s no different for buildings.  You don’t mess with government authorities because they have the power to inflict real pain – in the form of interest and penalties and liens.  And if it goes on long enough banks won’t lend on the building, so it will be impossible to sell – and it’ll be ONE HUGE MESS.

225PastDue01So back to the question: How could it happen?  It shouldn’t.  NEVER! EVER! Because even if the company supposedly managing your building really isn’t, the board should be paying enough attention to know whether the bills are being paid.  That doesn’t mean blindly relying on monthly statements.  It means reading and signing off on actual bills, especially those over a certain amount, and real estate taxes are usually THE BIGGEST AMOUNT, so there’s no excuse.

So why am I telling you all this?  Because it is that rare case where you can do something about it. As an owner, without rank there is no easy way to tell if your building’s vendors and suppliers are being paid because you don’t have ready access to the bills and payment records.  But you can tell if real estate taxes are being paid because the statements are available online, not that the City makes them easy to find, which shouldn’t be a surprise because the whole system is so Byzantine only an idiot savant could understand it.

Here’s what you do: Log onto the Department of Finance’s NYC Property Information.  You’ll need to know your building’s Block and Lot numbers to gain access  to the system. It says you can use the address, but you really can’t, at least I couldn’t having tried more than half dozen times, each time being told that there was no such thing as 9th Street, which I know there is cause I’ve lived on it for several decades. Just ask the board or your agent, and if they don’t know or can’t find out in a matter of minutes, I’d already be getting nervous

 When you finally get to the Account History, you can see in an instant whether your building is current in its payments, as it should be, in which case you can take a deep sigh of relief, and stick your head back in the sand if you are so disposed

Don’t get excited if the Statement shows that you or one of your fellow tribesman is the owner of the property. No, you didn’t get lucky. It’s not like when a bank accidentally deposits a million dollars in your account and you face the ethical dilemma whether to take the money and flee to South America or disclose the mistake — a problem I had to grapple with when an ATM machine (I won’t say where) spit out hundreds instead of twenties – really!  All it means it that there was some recent transaction involving that particular apartment.

If there is even a single quarter for which the tax is owing and unpaid, Houston there is a problem. If it turns out you are telling the board something it didn’t know, there is a bigger problem, and an even bigger problem if there are multiple unpaid periods of which the board is unaware. This is not one of those times when you can take an aspirin, sit back and do nothing, hoping the problem will go away like a headache. It will only get worse. So if you get no suitable response from the ruling class, it’s time to call a Special Meeting and get answers.

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