Co-op Shareholder Entitled to STAR Exemption

Landlord cooperative corporation sued to evict tenant cooperative shareholder for nonpayment of rent or maintenance. Tenant withheld a portion of July 2006 maintenance representing a school tax relief ("STAR") exemption. Landlord claimed that tenant wasn't entitled to the exemption, even though prior co-op shareholder received it before selling the apartment to tenant in May 2006. The court ruled for tenant. Generally, when property subject to a tax exemption is transferred to someone ineligible to receive the exemption, the exemption ends on the transfer date. But RPTL Section 425(2)(k)(I) gives new co-op shareholders the right to continue to receive tax exemptions prior shareholders received. So tenant was entitled to receive former tenant's STAR exemption after she bought the apartment even if she was otherwise ineligible for the exemption.

Village in the Woods Owners Corp. v. Powles: NYLJ, 8/1/07, p. 28, col. 3 (Dist. Ct. Suffolk, Spelman, J)