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Volume 6 - Opinions of Counsel SBEA No. 100

Opinions of Counsel index

Real property, definition of (land under water) (lake bed) - Real Property Actions and Proceedings Law, Article 15; Real Property Tax Law, § 102(12)(a):

Lake beds are real property. Whether the value of the lake bed is to be included in the assessment of property of littoral owners may be affected by the manner in which title to the lake beds is held. Assessment records do not establish title to real property.

Frequently, a tax map program uncovers title controversies of which property owners had been previously unaware. In this inquiry the questions involve the accessibility of a lake bed, the establishment of title thereto, the separation of title to the lake bed from title to the lake front, and the valuation of the lake bed.

The preliminary question is whether the bed of a lake is real property. Real Property Tax Law, section 102(12)(a) provides, in part, that “‘Real property’, ‘property’ or ‘land’: mean and include, (a) Land itself, above and under water. . .”, and section 300 of that law provides, “All real property within the state shall be subject to real property taxation, special ad valorem levies and special assessments unless exempt therefrom by law.” Thus, a lake bed is real property and, absent an exemption, is taxable.

How ownership and value are determined are not so easily answered. The threshold question in dealing with ownership of lake beds is whether the lake is navigable. The test for navigability is a practical one-the capacity and susceptibility of the lake for trade, commerce or travel {Morgan v. King, 35 N.Y. 454; Fairchild v. Kramer, 11 A.D.2d 232, 204 N.Y.S.2d 823). A presumption exists that title to land under a navigable lake is in the State (Commonwealth of Massachusetts v. New York, 271 U.S. 65, 46 Sup.Ct. 357, 70 L.Ed. 838; People v. Foote, 242 App. Div. 162, 273 N.Y.S. 567). A survey of judicial determinations of whether particular lakes are navigable is contained in 63 N.Y. Jur., Waters § 209 (1978).

Where lakewaters are non-navigable, a rule of construction has been applied in New York that, absent express words to the contrary, a grant of lakefront property carries title to the center of the lake (People v. System Properties, 2 N.Y.2d 330, 141 N.E.2d 429, 160 N.Y.S.2d 859). The portion of lakebed owned by a lakefront owner - traditionally referred to as a littoral owner - will generally be determined by the ratio of lake frontage owned to total lake frontage, although more sophisticated geometric computations may be needed for irregularly shaped lakes (see, Calkins v. Hart, 219 N.Y. 145,113 N.E. 785).

It must be understood that these rules are rules of construction, and where evidence exists to rebut them, the presumptions these rules establish are overcome. Thus, it is possible that grants of lake front property may not include any of the lake bed. Conversely, the grant of one lake front parcel may by its terms include the entire lake bed.

As we have noted in other contexts, it is not the function of the assessor to resolve title disputes to property; similarly, assessment records are not proof of title (5 Op.Counsel SBEA No. 34, 6 Op.Counsel SBEA No. 36). The assessor is charged with ascertaining “by diligent inquiry” the ownership of all parcels within the assessing unit (Real Property Tax Law, § 500). However, if after such diligent inquiry, the assessor is uncertain who owns lake bed property, his actions are the same as with any ownership problem: that is, on the assessment roll, the owner may be entered as “unknown” or the prior or reputed owner may continue to be listed (Real Property Tax Law, § 502(2); 5 Op.Counsel SBEA No. 34). Since the real property tax is an in rem tax. the source of the tax payment is immaterial. In any case, the proper means for determining title to property is an action under Article 15 of the Real Property Actions and Proceedings Law, and not through analysis of assessment records.

It might seem that this discussion is primarily academic, since the value of lake bed property for assessment purposes may be minimal, with the real value of such property included in the assessment of the lake front property (see, White v. Knickerbocker Ice Co., 254 N.Y. 152, 172 N.E. 452). However, this is not always the case. New York has not conferred upon littoral owners a package of rights parallel to those possessed by riparian owners. That is, littoral owners possess no general rights to use and enjoy the lake as a result of owning lake front property. Any such rights result from ownership of lake bed property or some source other than mere littoral ownership. When such rights result from ownership of lake bed property, they exist over the portion of the lake bed owned, not the entire lake (Commonwealth Water Co. v. Brunner; 175 App.Div. 153, 161 N.Y.S. 794).

Thus, ownership of the bed of a non-navigable lake may be of considerable value. However, where ownership is divided, it may be practically impossible for one owner to enforce his rights and keep other owners from enjoying the water over his portion (see, Waters of White Lake, Inc. v. Fricke, 282 App.Div. 333, 123 N.Y.S.2d 400, aff’d, 308 N.Y. 899, 126 N.E.2d 568). Conversely, where an entire lake bed is owned by one legal entity, even a property owners association, such a bed may be of value if the bed itself is transferable (see, Grosser v. Graham, 97 Misc.2d 417, 411 N.Y.S.2d 836).

November 8, 1979