What's the latest with the second home tax?

Well, an appeals court yesterday vacated a judge's ruling that the Mondani administration had to start over because they had so botched the rollout.

Not on the merits that the Mondani administration had botched the rollout, but on a legal issue called standing.

Because what happened in the case was every time somebody would come forward to be a plaintiff and they joined the lawsuit, the city would immediately say, say, oh, you don't owe the tax because they were trying to avoid the merits of the litigation.

And the appellate court found that, therefore, none of my clients had what's in legal terms called a concrete injury since they'd been cleared and don't owe the tax.

Well, of course, that's why they sued in the first place, because they were harassed by the city, threatened by the city with owing a pied-à-terre tax that they don't owe.

So the ruling is a disappointment because it means that demerits will never be reached, and that's a shame because there are still thousands of New Yorkers being harassed by this administration to pay this tax who don't owe it, who this administration has tried to switch the burden to.

laymen who are listening? Does this mean that it's not going, that that aspect is not going for thousands of people? What does that mean?

What's the latest with the second home tax?

Well, an appeals court yesterday vacated a judge's ruling that the Mondani administration had to start over because they had so botched the rollout.

Not on the merits.

That the Mondani administration had botched the rollout, but on a legal issue called standing, because what happened in the case was every time somebody would come forward to be a plaintiff and they joined the lawsuit, the city would immediately.

say, oh, you don't owe the tax because they were trying to avoid the merits of the litigation.

And the appellate court found that, therefore, none of my clients had what's in legal terms called a concrete injury since they'd been cleared and don't owe the tax.

Well, of course, that's why they sued in the first place, because they were harassed by the city, threatened by the city with owing a pied-à-terre tax that they don't owe.

for laymen who are listening? Does this mean that it's not going, that that aspect is not going for thousands of people? What does that mean?

Well, Randy Mastro, where do we start on a Sunday morning?

Well, John, we are now challenging the constitutionality of that pied-a-terre tax, trying to get rid of it altogether.

We won a case that the Mondani administration had botched the rollout and had to do a do-over.

That case is on appeal.

And now we are challenging the legality, the constitutionality of that pied-a-terre tax, because it violates the federal and state constitutions.

That case was brought out in Suffolk County, and it's going to proceed on an expedited schedule.

So by December, we should be in a position to get a ruling whether or not that pied-a-terre tax is wiped out as unconstitutional and illegal.

How about the other lawsuit that you have where you're fighting the fact that they're freezing the rents and expenses are going up and some of the people that own buildings could go out of business?

And does this go under state law or federal law? Both.

Under the federal constitution, the governor, state legislators, the mayor admitted at the time this was passed that they were doing this to target out-of-state billionaires who had second homes in New York City.

And that is blatantly illegal under the federal constitution, both the Privileges and Immunities Clause, which makes it illegal, unconstitutional to discriminate against out-of-staters, and the Dormant Commerce Clause, which bars states from interfering with interstate commerce.

Also, under the state constitution, because, John, they called this a surcharge, even though a tax by any other name would cost people as much.

Obviously, a tax on top of your real estate taxes.

But they did that to try and get around Article 8 of the state constitution, which places a cap on how much of revenue can be raised through real estate taxes.

So they attempted to exempt this pied-a-terre tax from that cap.

Is that correct?

Do you really feel in your heart of hearts you've got a pretty good case to make this whole thing go away?

Oh, I, I think we have a, a great case because the core of the case, federal constitution, the founders, they, they embodied in the constitution you can't discriminate...

A state can't discriminate against citizens of another state, and the state can't burden interstate commerce.

Well, that's exactly what this tax was intended to do.

Uh, we don't have to guess.

The intent and effect of the tax is to go after out-of-staters who have a second home in New York City.

The governor said it.

So it's not a win for the mayor and New York City either, is it?

Is that correct?

Well, that, that's exactly what happened here, right? And now, uh, you know, the response by the city is, is not, you know, to acknowledge that that's what happened.

So that's why the city is to say, oh, well, there, there were, you know, there were communications in the Adams administration when, uh, with the Rent Guidelines Board.

Yeah, guess what the communications were.

Communications were the Rent Guidelines Board was independent, it did its own thing, it raised rents even more than the mayor wanted them to raise rents.

Okay? That's how the process is supposed to work.

What happened here, okay, is the mayor preordained an outcome.

some people call it a criminal act.

Is that correct?

Well, that, that's exactly what happened here, right? And now, uh, you know, the response by the city is, is not, you know, to acknowledge that that's what happened.

So that's why the city is to say, "Oh, well, there, there were, you know, there were communications in the Adams administration when, uh, with the Rent Guidelines Board." Yeah, guess what the communications were? Communications were the Rent Guidelines Board was independent.

It did its own thing.

It raised rents even more than the mayor wanted them to raise rents, okay? That's how the process is supposed to work.

What happened here, okay, is the mayor preordained an outcome.

He stacked the board with six acolytes.

Some people call it a criminal act.

Is that correct?

That's exactly what happened here.

Right.

And now, you know, the response by the city is not to acknowledge that that's what happened.

So I'm sure the city is to say, oh, well, there were, you know, There were communications in the Adams administration with the Rent Guidelines Board.

Yeah, guess what the communications were? Communications were the Rent Guidelines Board was independent.

It did its own thing.

call it a criminal

Well, Randy Mastro, is it a big victory for New Yorkers? Describe to us what the heck is going on.

It is a huge win for New Yorkers, particularly the thousands, indeed hundreds of thousands, who were doxxed by the Mondani administration with threats of a pied-à-terre tax.

imposition that turned out to be apocryphal.

They had never owed the tax.

They never will owe the tax.

They never should have been put in that position.

And that's exactly what the court on Staten Island has now ruled after hearing from the city, multi-hour hearing.

So what does this mean timing wise?

Yeah

...

the state statute put the burden on the city to make an individualized initial determination who owed the tax and only demand it from people it had determined owed the tax.

Instead, the city, whether out of negligence, laziness, or just intentionality to try and ensnare people into having to pay the tax, it switched the burden to taxpayers to prove they live in their own home, as Craig just pointed out, required them to give up their tax returns and other personal information, private information, to try to get an exemption, and if they didn't seek an exemption or didn't get one- They were gonna be deemed to owe the tax when they live in their own homes.

That never should have happened, that burden shifting.

And that exemption process, nowhere to be found in the state statute.

So that's why a judge declared all of this illegal and the city has to start over.

[laughs]

Well, Randy Mastro, is it a big victory for New Yorkers? Describe to us what the heck is going on.

It is a huge win for New Yorkers, particularly the thousands, indeed hundreds of thousands, who were doxxed by the Mondani administration with threats of a pied-à-terre tax imposition that turned out to be apocryphal.

They had never owed the tax.

They never will owe the tax.

They never should have been put in that position.

And that's exactly what the court on Staten Island has now ruled after hearing from the city, multi-hour hearing.

He ruled that exactly what we were saying was true.

So what does this mean timing wise?

What about today?

Well, first of all, from your lips to God's ears, a lot of good things are happening, but cases aren't over until they're over.

On the Pieta tear tax, which is called a surcharge, we're waiting for a decision from our judge on Staten Island.

We had a two-hour hearing there on August 31st.

We expect a decision any day now.

And that's the same judge who said there should be a temporary restraining order against the city for their botched rollout.

So we remain hopeful that the judge will once again tell the city, hey, you've got to do it over again because you screwed up.

What are your thoughts on Bibi coming here a week from today?

[laughs]

...for 40 years.

I had to legally live here to be first deputy mayor last year, but I got one.

Um, you know, uh, um, the governor, uh, who has been, you know, the mayor's sponsor of this bill, um, sh- she did say, "Hey, this has gotta be cleaned up.

This has gotta be fixed." And basically the city has now been, because we brought this lawsuit, forced to admit they massively screwed up and sent this to 7,000 people they shouldn't have.

Um, but there's more to come because there's gonna be other New Yorkers, you know, who are residents, who never should have gotten these nasty grams.

People who own their properties, yeah, in some other form like an LLC or a partnership or a trust.

So how's that going?

Are you worried at all?

Different case.

The Pieta tear surcharge case remains on Staten Island and will be back in court on August 31.

And by the way, the city has moved the deadline for applying for exemptions again, this time until October the 6th.

That's the second time that has happened.

That, again, is entirely in response to the lawsuit.

Query why the city didn't move that date till after October 15th.

What did we used to call it in the American Revolution, double taxation without representation? Well, you know,

You give us the update on the pied-à-terre tax.

Um, John, uh, city admitted a few things that were not right.

It basically admitted to, uh, a massive screw-up of unparalleled proportions.

Uh, it admitted that, you know, it sent threatening notice letters to thousands and thousands of property owners, um, claiming they may owe a surcharge unless they apply for an exemption or else be deemed to owe the tax, that that was just flat out wrong.

Never mind, it was our mistake.

Uh, and only because of the pendency of this lawsuit, you know, are we where we are now, where the city's feet have been held to the fire.

The Mondale administration has been made to admit the mistakes it made.

Uh, and to, to move it to Manhattan, uh, are you worried at all?

You give us the update on the Pierre Duterte tax.

John, Citi admitted a few things that were not right.

It basically admitted to a massive screw-up of unparalleled proportions.

It admitted that it sent threatening notice letters to thousands and thousands of property owners claiming they may owe a surcharge unless they apply for an exemption or or else be deemed to owe the tax, that that was just flat-out wrong.

Never mind.

It was our mistake.

And only because of the pendency of this lawsuit are we where we are now, where the city's feet have been held to the fire.

And to move it to Manhattan, are you worried at

Well, John, you know, it's

kind of incredible that that the city isn't owning up to the mistakes it made in rolling out this pied-à-terre surcharge and how badly botched the rollout was.

They appealed.

They appealed the judge's TRO order, staying their enforcement of the botched rollout notices, and their filing of an appeal gives them a stay on appeal, even though...

In 18 days, we will be back in court on Staten Island for a ruling on the merits that the city broke the law and has to do it over again.

So this is going to be resolved, and the city is going to be held accountable, and people are going to get justice here.

Because what the city did here was...

What is the status of that case? Well,

Well, John, you know, it's

kind of incredible that the city isn't owning up to the mistakes it made in rolling out this Pierre de Terre surcharge and how badly botched the rollout was.

They appealed.

They appealed the judge's TRO order, staying their enforcement of the botched rollout notices, and their filing of an appeal gives them a stay on appeal, even though...

In 18 days, we will be back in court on Staten Island for a ruling on the merits that the city broke the law and has to do it over again.

So this is going to be resolved, and the city is going to be held accountable, and people are going to get justice here.

Because what the city did here was it failed to do its homework.

What is the status of that case? Well,

Well, John,

you know, it's kind of incredible that the city isn't owning up to the mistakes it made in rolling out this pied-a-terre surcharge and how badly botched the rollout was.

They appealed.

They appealed the judge's TRO order, staying their enforcement of the botched rollout notices, and their filing of an appeal gives them a stay on appeal, even though...

In 18 days, we will be back in court on Staten Island for a ruling on the merits that the city broke the law and has to do it over again.

So this is going to be resolved, and the city is going to be held accountable, and people are going to get justice here.

Because what the city did here was it failed to do its homework.

What is the status of that case?

Well, John, you know, it's

kind of incredible that the city isn't owning up to the mistakes it made in rolling out this surcharge, and how badly botched the rollout was, they appealed.

They appealed the judge's TRO order, staying their enforcement of the botched rollout notices, and their filing of an appeal gives them a stay on appeal, even though In 18 days, we will be back in court on Staten Island for a ruling on the merits that the city broke the law and has to do it over again.

So this is going to be resolved, and the city is going to be held accountable, and people are going to get justice here.

Because what the city did here was it failed to do its homework.

and make a determination who actually owed the tax.

It spread the landscape, 17,000 notice letters, even to me, switching the burden to us to prove we don't owe the surcharge.

What is the status of that case? Well,

Randy Mastro worked with Giuliani in the US Attorney's office, and later as his first deputy mayor, and he witnessed Molinari's relationship with Giuliani firsthand.

A lot of, uh, similarities in backgrounds, Italian Americans, uh, working class family backgrounds, shared a lot of the same values.

And while some Staten Islanders were trying to leave the city entirely, Molinari was looking for someone who could remake it in Staten Island's image.

I think there's definitely a sense on both their parts about being fair to every borough, and that Manhattan had probably been favored by many prior mayors.

She said she's wondering if this is a class action suit, and is it too late for people to join this lawsuit? What are the answers to those two questions?

Okay, well, I appreciate Vicky's question.

It's not a class action, but the ruling... will apply to similarly situated people because the city will have a ruling that the way it rolled out this pied-a-terre tax was not only a fiasco, a debacle, it's illegal.

And you know why it's illegal, Sid? Because the state legislation required the city administration in implementing this surcharge to make a determination, an initial determination in the first instance, who's covered by the tax.

Okay.

And, and that's who they were supposed to reach out to.

Instead, this administration sent out 17,000 threatening letters that said, you may be subject to the tax unless you apply for an exemption.

listing every New York home on a roll they published,

Uh, can you give us an update what's happened in the last 24 hours since the big announcement yesterday?

Sure, John.

It's a pleasure to be back.

Um, we went to court yesterday on behalf of New York City homeowners who showed up on a, a log, a roll filed by the Mondale administration of over 900,000 homeowners, their addresses and their property values, and 17,000 of them who got notice letters, you know, basically threatening them with imposing this second home surcharge.

We went into court to say what the Mondale administration did was illegal because instead of following the state law that authorized the imposition of a second home surcharge, uh, and making that determination in the first instance using the information available to it, the Mondale administration shifted the burden to homeowners to have to prove they actually live in their own homes.

That's not what that state law said.

That state law said you, Mondale administration, have to make the, quote-unquote, "initial determination" and only then do you notify those select few homeowners who are actually subject to a second home surcharge that they may be subject to the charge and should appeal if they disagree.

Now, i- isn't that what happened in World War II where, where, where, where people were put on notice and, uh, that, uh, they may be guilty of something that they may not even know about?

Can you give us an update what's happened in the last 24 hours since the big announcement yesterday?

Sure, John.

It's a pleasure to be back.

We went to court yesterday on behalf of New York City homeowners who showed up on a log a role filed by the Mondani administration of over 900,000 homeowners, their addresses and their property values, and 17,000 of them who got notice letters basically threatening them with imposing this second home surcharge.

We went into court to say what the Mondani administration did was illegal because instead of following the state law that authorized the imposition of a second home surcharge and Making that determination in the first instance, using the information available to it, the Mondani administration shifted the burden to homeowners to have to prove they actually live in their own homes.

That's not what that state law said.

That state law said you, Mondani administration, have to make the quote unquote initial determination.

isn't that what happened in World War II, where people were put on notice that they may be guilty of something that they may not even know about? And guess what?

Can you give us an update what's happened in the last 24 hours since the big announcement yesterday?

Sure, John.

It's a pleasure to be back.

We went to court yesterday on behalf of New York City homeowners who showed up on a log a role filed by the Mondani administration of over 900,000 homeowners, their addresses and their property values, and 17,000 of them who got notice letters basically threatening them with imposing this second home surcharge.

We went into court to say what the Mondani administration did was illegal because instead of following the state law that authorized the imposition of a second home surcharge and Making that determination in the first instance, using the information available to it, the Mondani administration shifted the burden to homeowners to have to prove they actually live in their own homes.

That's not what that state law said.

That state law said you, Mondani administration, have to make the quote unquote initial determination.

isn't that what happened in World War II, where people were put on notice that they may be guilty of something that they may not even know about?