Nassau and Suffolk counties are again attempting to raise revenue, this time targeting real estate transactions. Those buying or selling real estate on Long Island or looking to borrow funds should be aware of the following new and increased fees:

• Suffolk County Mortgage Verification Fee. Effective January 1, 2017, there is a $300.00 charge at the time of filing of any “mortgage related documents.” It appears that this fee, which would be paid by the Borrower, would apply to mortgages, assignments of mortgage, subordination agreements, home-equity line of credit documents, satisfactions of mortgage and consolidation, extension and modification agreements (CEMAs), all of which are recorded in mortgage books of record (Libers).

This fee is in addition to the “Real Property Verification Fee,” which is already imposed by Suffolk County in connection with the recording of any instrument in the county. The Real Property Verification Fee was increased by Suffolk County in December of 2015 from $60.00 per instrument to $200.00 per instrument and still applies to all recorded documents, including mortgage related documents. Although these charges will likely appear separately on the title bill, for those recording mortgage-related documents in Suffolk County, the total fee per document comes to $500.

• Nassau County Tax Map Verification Letter Fee. Effective January 1, 2017, the Nassau County Legislature, increased the fee for a Tax Map Verification Letter to $355.00. This increase applies to any document to be recorded in the Nassau County Clerk’s office and raises the cost of recording by $130.00 per document. A Tax Map Verification Letter (and the payment of the corresponding fee) is required by the Nassau County Clerk at the time of recording any instrument within Nassau County.

These legislatively imposed fee increases, generally impact either the purchase/sale of real estate and/or the borrowing of funds with which to do so. They are an attempt by each county to offset their budget deficit and increase revenue without enacting an actual across the board “tax” increase paid by all taxpayers. These fees are being imposed at a time when the Buyer/Borrower is already making substantial expenditures. Therefore, the legislators no doubt feel that additional fees will simply go unnoticed. However, these fees are arguably taxes which are not being uniformly imposed upon all taxpayers and a legal challenge to the fees based upon this disparate treatment may not be far behind.

Learn more about our real estate practice.

This post does not constitute legal advice or establish an attorney-client relationship.