December 3, 2020

NYREJ: Massive jumps in expenses result in decreased NOI’s and increased tax rates

Decreased revenues as a result of COVID-19 has been well reported amongst all property types, but significant increases in expenses are frequently overlooked. Sophisticated owners understand that it’s not how much money you earn, it’s how much you keep. As the calendar year nears an end, additional expenses incurred as a result of COVID are being totaled for 2020 and the figures are startling. Expenditures on protective items such as masks, hand sanitizer stations, and plexiglass dividers are seen daily for those not working from their homes. However, there are other tremendous adjustments being made by owners and businesses as they implement new systems to make themselves safe and operational during the pandemic.

There is a disparate impact among different types of operations. For example, restaurant owners have had to pivot on multiple occasions—from complete shutdown, to take out only arrangements, to finding a sustainable business model at less capacity, navigating outdoor dining and now adjusting to a statewide curfew—the constant regulatory yo-yo is not only difficult to manage, but comes with increased costs with each change.

Growing expenses are one area where both property owners and governments can both commiserate. Municipal budgets have been pushed to the brink as they deal with decreased revenue and climbing costs. Local governments have been at the forefront of managing the pandemic response since March. With almost no time to plan, spending reserve money became necessary to stay operational.

Unfortunately, when municipal budgets increase, some of those costs are passed through to property owners in the form of tax rate increases. With limited aid, municipalities are forced to utilize already depleted reserves or raise taxes.

School budgets, the largest component of the tax rate, were dramatically impacted. The monumental task of operating schools in a safe manner involved large expenditures on equipment, additional staff, transportation adjustments, and providing technology upgrades for remote learning. With the number of positive COVID cases again on the rise, these costs are sure to endure through the winter.

The problem thus becomes a double hit for property owners: Endure their own increased expenses while also having government’s rising expenses passed onto them in property taxes. With Long Island already at the top of the nation in property tax burdens, these increases can make property operations unsustainable.

The problem thus becomes a double hit for property owners: Endure their own increased expenses while also having government’s rising expenses passed onto them in property taxes. With Long Island already at the top of the nation in property tax burdens, these increases can make property operations unsustainable.

Under these dire circumstances it becomes absolutely critical that each property is assessed at an accurate value that takes into account the ongoing burden of these increased expenses. While lost and deferred rents are easy to understand, the costs and time associated with running a property amidst a pandemic must be meticulously quantified and presented to the assessor as well.

In Nassau County, the time to grieve these taxes begins in January with Suffolk County and the majority of New York jurisdictions following just months later. These are the first grievance periods that will actually account for the impact of COVID under the law. It is important to document and quantify all changes a property owner has made since March. Assessors will have the unenviable task of sifting through thousands of property tax grievances and attempting to understand the extent by which each property was impacted by COVID.

No property owner will be telling the municipality that their operations were helped by COVID, so it becomes the responsibility of the property owner, in conjunction with their counsel, to make clear just how each property was impacted. On the other side, assessors and the administrative bodies that defend assessments will be mindful to protect their assessment roll.

Municipalities already saw a decline in collections from property tax bills. This decline was minimized by the influx of cash from the Paycheck Protection Program (PPP). Now with PPP money spent and operations still impacted by COVID, collections are likely to decline further when the next set of tax bills come due. A second round of PPP or other Federal fiscal stimulus looks likely, though probably not before the Presidential inauguration in January. Municipalities are always diligent in defending the assessment roll. However, with so many owners seeking reductions, they will be under a great deal of pressure to maintain a stable assessment roll as a sharp decline in assessments would cause a spike in the tax rate for all owners. In short, not every property owner with a grievance is going to receive the relief to which they believe they are entitled, underscoring the importance of working with counsel to build a diligent game plan.

After seeing some operations resume over the summer, the ongoing second surge is again altering the realities on the ground for many property owners yet again. The situation remains fluid, with rules and protocols seemingly changing by the day. Assessors will examine the facts for each property, which is why quantifying the exact impact specific to each individual property will be of the utmost importance in obtaining a reduction in your property taxes.

Click here to view the full article.

Brad W. Cronin, Esq.

Brad W. Cronin is the founding Partner at Cronin & Cronin Law Firm. He has over 40 years of Legal Experience. Brad represents a cross section of many of the largest New York developers, property owners, national corporations, REITs and retail chains. He has extensive trial experience having successfully litigated and resolved high profile cases throughout New York State which has resulted in a number of landmark decisions in the field of Tax Certiorari. 


Over the years Brad’s reputation for honesty and integrity has led to long term relationships with municipal assessment officials. His expertise and extensive experience along with his reputation has resulted in some of the highest property tax reductions in New York State.


Brad has been selected as a Who’s Who of Long Island Business News for the past 7 years in the fields of Tax Certiorari law and Real Estate Law. Each year Long Island Business News honors business leaders whose creative approach to challenges and positive results help to make Long Island better.

For over 30 years Brad has earned the highest rating awarded by Martindale Hubbell in both competency and ethics in his field. This is an honor bestowed on him by his peers for his professional excellence.


Brad is a columnist for the New York Real Estate Journal’s “Ask the Expert” quarterly feature discussing current real property tax issues. Some issues addressed are Hurricane Sandy’s effect on property taxes, Nassau County’s Disputed Assessment Fund, emerging market trends, New York’s property tax rates, and how your purchase price can affect your taxes.

Brad has been an invited speaker and participant on various panels involving different subjects affecting tax certiorari and valuation of property such as condominiums, environmental contamination, and reviewing changes in the tax certiorari field. As a member of the Nassau and Suffolk Condemnation and Tax Certiorari committees, he has worked to implement changes to facilitate the timely resolution of commercial tax protests.

Brad currently serves as executive member of the steering committee and served as Co-President of the Long Island Real Estate Group for three years. This organization has supported various Long Island charities, as well as real estate related projects, educational real estate programs and networking events. He is Cofounder of the North Shore University Hospital Department of Medicine Leadership Circle Committee and serves on the Village of Plandome Planning Board.

Sean M. Cronin, Esq.

Sean M. Cronin is a founding partner at Cronin & Cronin Law Firm with over 20 years experience. He specializes in negotiating tax certiorari matters for prominent developers, national REITs and tenants in Nassau, Suffolk, and Westchester counties, as well as the five boroughs. He is responsible for successfully reducing the assessments, and thereby the real estate taxes, on many of the largest properties in New York State thanks to his expertise in property valuation issues and knowledge of market conditions and demographics. His clients include developers and owners of all property types, including office buildings, industrial buildings, shopping centers and retail locations, restaurants, apartment buildings and condominium complexes, golf courses and assisted living facilities. 


Sean is an Executive Board member and past Co-President of the Long Island Real Estate Group, a charitable organization created to support local communities.   He is an Executive Board Member of Vision Long Island which advances more livable, economically sustainable, and environmentally responsible growth on Long Island through Smart Growth.   Sean is an Advisory Board Member of the Viscardi Center and on the Board of Advisors of the Energeia Partnership. He is an active member of the Chaminade Lawyer’s Association and Real Estate Group as well as the Washington & Lee Alumni Association. 


Sean is featured regularly in the New York Real Estate Journal’s “Ask the Expert” section and has been quoted in various publications, including the Long Island Business News and Newsday. He has been recognized by the Long Island Business News as a “Who’s Who in Commercial Real Estate” multiple times, most recently in 2023 and by the Long Island Herald as the Top Tax Certiorari Attorney in 2023. 

Get In Touch

Our staff is knowledgeable in all areas related to property tax. We regularly consult with clients regarding purchasing a property or possible major construction by projecting future property taxes and values as well as aid in obtaining any exemptions they may be eligible for.
Share this post:

Speak to a Member of Our Team