Mamdani Crackdown Targets Condo and Co-op Tax Cheats

In 1993, the late Assembly member Howard Lasher’s bid for City Council was saved by a pair of boxer shorts he had left in his Brighton Beach apartment.

This might soon be relevant to owners of co-op and condo units in New York City.

Lasher was using his former bachelor pad as his voting address but had since married and moved to a house in swankier Manhattan Beach, out of the district. He was even subletting the apartment.

Lasher’s primary opponent, an ambitious, backroom dealmaker appropriately named Shelly Plotnick, filed a residency challenge to knock him off the ballot.

But Lasher argued in court that he intended to return to the apartment some day, citing the boxers as evidence. The courts deemed that sufficient, Lasher won the race, and Plotnick faded into obscurity.

To the surprise of no one, Lasher never moved back to Brighton Beach. But he had established a legal precedent.

What does this have to do with co-ops and condos?

The Lasher-Plotnick case made clear that primary residency is a fuzzy term when it comes to voting in New York. That is also true for rent-stabilized tenants, as landlords know all too well. But what about condo unit owners and co-op shareholders?

The Mamdani administration is introducing a document requirement for co-op and condo tax abatement recipients, as the Daily Dirt first reported last week.

I called it a revenue grab by the mayor, though not in a negative sense. Rather, it seemed the mayor was looking for ways to balance the city budget without the across-the-board property tax increase that he had foolishly floated.

My instincts were confirmed the next morning when City Hall released a list of budget-saving moves — one for each agency. Some were laughably small, like canceling a Slack subscription to save $20,000. The budget gap is $5.4 billion!

The condo and co-op abatement savings made the list. It was a bit more substantial: $13 million.

I am sure some of that $13 million will come at the expense of condo and co-op owners who legitimately receive the abatement but fail to upload their documents. (Owners who lose the tax break can appeal.) One condo owner I know — a former city commissioner — emailed me that his first attempt to upload his driver’s license to the Department of Finance website was a failure.

But it’s also true that many owners continue to claim the abatement despite no longer living primarily in their condos and co-ops.

“This crackdown is long overdue,” one reader emailed me. “As the longtime president of a co-op somewhere in the five boroughs, it has always pissed me off that five nonresident owners (three of whom have sublet their units for years) are claiming the rebate, and the city has never had any interest in verifying by, say, cross-checking the address on tax returns.”

I also know nonresidents who do that. However, I’m not ready to call them cheaters. Perhaps, like Howard Lasher, they just have to intend to return to their units.

“There’s nothing specific about ‘primary residency’ in the statute authorizing the abatement,” noted Lloyd Reisman, a partner at Belkin Burden Goldman. “DOF typically relies on the applicant’s statement that the apartment is the owner’s primary residence and that the apartment is actually occupied by the owner.”

The Department of Finance cites a city rule that says “a dwelling unit must serve as the primary residence of one or more of the owners … as of the taxable status date for the fiscal year to which the abatement applies.”

Owners who move out of their units will probably just keep their driver’s license under the old address. But as a backup, it can’t hurt to leave some underwear behind too.