We previously reported on a Second Department case that held a municipal agent (including a private appraiser hired by a municipality) is not automatically entitled to an inspection of a private residence to prepare an appraisal report in a real property tax assessment review proceeding. As the holding indicates, the issue requires a balancing of an individual’s right to privacy against a municipality’s ability to obtain the information appraisers and assessors arguably “need” to determine a property’s fair market value.

The issue came up again, this time before the Appellate Division, Fourth Department, in February 2015 in Matter of Aylward v. Assessor, City of Buffalo. Here, as in the Second Department case, the Fourth Department denied the City’s motion to compel an interior inspection of the petitioners’ private homes. Like the Second Department case, the Court in Aylward balanced the property owners’ Fourth Amendment right to privacy against the City’s alleged need for the interior inspection. The Court ultimately concluded that the municipality failed to meet the high threshold required to warrant an interior inspection based on the testimony of the property owners’ appraiser that interior conditions do not significantly affect residential value and the admission by the City’s appraiser that, while he believed that such conditions do affect property value, professional appraisal standards do not require such an inspection. The City of Buffalo promises to appeal the decision. We’ll keep you posted as the matter progresses to the Court of Appeals.

In the meantime, it’s key to note that as of March 2015, two separate Judicial Departments in New York have held that interior property inspections of private homes will not be permitted in tax assessment matters unless the municipality can show the balancing test weighs in their favor. The burden is squarely on the municipality. Is this fair? Appraiser John Zukowski, MAI, from ENPM, Inc., who testified in the Aylward case for the City of Buffalo, says that this ruling puts an unfair burden on the municipalities and makes the appraiser’s job that much harder. Zukowski believes that proper inventory is key to proper assessing and proper appraisal practices. But is the interior home inspection necessary to determine an opinion as to the market value of a residential property? Other appraisers disagree with Zukowski and the City, believing that the decisions in these two cases will streamline the residential assessment appraisal process. Both sides have good points. It will be interesting whether or when the Court of Appeals will rule on this issue, but until then, municipalities are under a greater burden to weigh how much difference internal home inspections make in terms of actual tax dollars and cents as compared to the privacy rights of their citizens.