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Volume 3 - Opinions of Counsel SBEA No. 74

Opinions of Counsel index

Real property, definition of (modular bank vault) - Real Property Tax Law, § 102(12)(f):

A modular bank vault is taxable real property within the meaning of section 102(12)(f) of the Real Property Tax Law and should be included in the assessment of bank property in which it is installed.

Our opinion has been requested as to whether a particular kind of bank vault called the Mosler Modular Vault would be real property includable in the assessment of any bank in which it is installed.

The material provided us indicates that the modular vault is constructed in modules ranging from 4′ 4½″ wide, by 9′ 10″ long, by 8′ 9″ high, with a weight of 9,050 pounds to 33 1/8′ wide, by 9′ 10″ long, by 8′ 9″ high, with a weight of 4,500 pounds. Two or more of the modules can be put together to form vaults of different sizes. (One should note that a typical four modular vault with front, rear and center sections weighs 27,950 pounds.) The specifications further show that elaborate electrical, ventilation, light and alarm systems found in the typical bank vault are required as is the installation in a pit if a level walkway through the vault door is desired.

The apparent advantage of this vault is that it can be installed “free-standing” and is therefore removable without injuring the building or, because of the “modular” construction, the vault itself.

Subdivision 12(b) of section 102 of the Real Property Tax Law includes in the definition of real property “. . . other articles and structures, substructures and superstructures erected upon, under or above the land, or affixed thereto . . . .”

In order for “articles . . . erected upon, under or above the land, or affixed thereto” to be considered real property, the courts have held that the following conditions must be met: (1) the article must be actually annexed to the realty or something appurtenant thereto; (2) the article must have been adapted to the use or purpose to which that part of the realty with which it is connected is appropriated; and (3) the party installing the article must have intended to make a permanent accession to the freehold (People ex rel. National Starch Co. v. Waldron, 26 App. Div. 527, 50 N.Y.S. 523; People ex rel. New York Edison Co. v. Wells, 135 App. Div. 644, 119 N.Y.S. 1057, aff’d, 198 N.Y. 607, 92 N.E. 1097; People v. Longwell, 131 N.Y.S. 361).

First, we think that there is no question but that such a vault would be considered “actually annexed” to the realty even though it is “free-standing.” For example, in Snedeker v. Warring, 12 N.Y. 170, a statue weighing three or four tons was found to be annexed although it was “attached” to the land only by its weight.

Secondly, an installed vault for bank use is unquestionably “adapted” to bank use. (It is not only “adapted” but “essential” for bank use.)

Thirdly, we believe a sufficient “permanent intent” exists as permanency of intent has been found by the courts under similar circumstances.

In all three cases cited in the fifth paragraph above, the court found that machinery being used in connection with a business being conducted on leased premises which was removable without injuring either the machinery or the building had been installed with a permanent intent and was therefore taxable real property. The clear inference of these cases is that “permanency” means so long as that business (i.e., banking business) is being conducted on the premises.

In conclusion, therefore, it is our opinion that a Mosler Modular Vault which is installed by a bank for use in connection with bank business is real property for taxation purposes under the principles discussed above.

We might note that no consideration has been given to paragraph (f) of subdivision 12 of section 102 of the Real Property Tax Law. This paragraph provides for the exemption of certain movable equipment owned by a 9-A corporation (Tax Law, Article 9-A) and used for trade and manufacture. Banks are not 9-A corporations.

April 13, 1973