Tuesday, October 23, 2012

Court reverses decision on property-tax penalty for Staten Island ...

STATEN ISLAND, N.Y. - A Staten Island judge overreached when he ordered two veteran builders to reimburse a pair of homebuyers who were ineligible for property-tax breaks, an appellate court has ruled.

Two years ago, Supervising Judge Philip S. Straniere of Richmond County Civil Court in West Brighton directed Victor Freudman and Nasser Yaghoobzadeh and their firm, the defunct Smyrna Building Corp., to shell out $12,651 to Joseph and Belle Miranda. They also were told to pay $10,993 to Steven and Chana Cilento.

Straniere ruled, after trial, that the builders had violated the General Business Law by telling the buyers they were eligible for property-tax abatements, when it turned out they were not.

However, the Appellate Division, Second Department, unanimously reversed Straniere's decision, ruling the buyers had not alleged General Business Law violations, and Straniere shouldn't have applied them.

The Mirandas and the Cilentos bought new homes in 1997 on Drumgoole Road West and Smyrna Avenue, respectively, on the Annadale-Eltingville border. They purchased the homes based on the builders' assurances they'd receive tax breaks.

Howard M. File, the builders' lawyer, previously told the Advance his clients received a certificate from the city Department of Housing Preservation and Development (HPD) several months after the closings, stating the properties were eligible for tax abatement. The cash break was to be phased in over eight years, but the city Finance Department refused to apply it.

"The city changed its position after the fact, unbeknownst to the builders," said File then.

Neither the buyers nor the builders produced documentation from HPD or Finance explaining why the abatements were denied, Straniere wrote in his original decision.

The properties, which originally comprised one tax lot, had been classified as commercial, according to court documents and John Z. Marangos, who represented the buyers at the Civil Court trial. An office building and parking area on the land were subsequently demolished in 1995.

To qualify for a residential tax abatement, the lot had to remain vacant for more than a year after the razing and be reclassified as vacant residential land. It was not.

Freudman and Yaghoobzadeh contended they were unaware of that rule when they sold the property to the Mirandas and Cilentos. They maintained they had followed through and filed for the abatements in good faith.

Straniere said the duo should have known better.

He said he was "shocked and dismayed" that two veteran builders with 30 years' experience in constructing and selling homes had tried to "stick" unsuspecting buyers. The judge said they should have offered to adjust the homes' purchase price or refund some money to the buyers.

Court papers said the Mirandas dished out $24,268 in property taxes between July 1, 1997, and June 30, 2005. They would have paid only $12,042, had the abatement been in effect, those documents stated.

The Cilentos paid $15,671 in real-estate taxes before selling their home in 2004. Straniere calculated their loss at $10,568, plus the $425 fee each couple paid Smyrna to file for the tax abatements.

The buyers alleged fraud and negligent representation, and Straniere ruled after trial that they failed to establish those charges, according to the appellate court. Nevertheless, he found "in the interest of just[ice]" that the builders had violated the General Business Law, according to the appellate court.

The higher court, however, said the buyers made no such claim, nor did they allege the builders had misrepresented "members of the public generally," a necessary element to bring a General Business Law claim.

File, the builders' lawyer, said last week the appellate court had "properly" dismissed the suit.

"The higher court found there was no fraud committed by these builders," said File.

The Mirandas' lawyer, Allyn J. Crawford, of Bloomfield, declined comment on the ruling.

The Cilentos' attorney, Ricardo R. Morel, of Queens, did not return a phone call seeking comment. ?

Source: http://www.silive.com/news/index.ssf/2012/10/court_reverses_decision_on_pro.html

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