Volume 7 - Opinions of Counsel SBEA No. 12
Correction of errors (refunds - sewer rents) - General City Law, § 20; General Municipal Law, § 451; Real Property Tax Law, § 556:
A property owner, who was charged and paid for use of a public sewer system to which his property was not connected, is not entitled to a refund of those payments under the Real Property Tax Law. A refund may be available, however, under the provisions of section 20 of the General City Law.
Our opinion has been requested as to the applicability of the so-called “correction of errors law” to an error which occurred in the extension and payment of sewer rent. A local law of the City of Hudson requires homeowners to install sewer facilities and connect them with the public sewer system within 90 days after notice by city authorities to do so, provided that the public sewer is within 100 feet of the property line. Property of one homeowner was not connected to the public sewer (although it was within 100 feet of his property line); nonetheless he was charged for and paid for the use of the sewer system for a number of years. He now has requested a refund of these payments, and we have been asked whether the City may comply with his request.
Section 20 of the General City Law sets forth the specific powers of cities, and subdivision 26-a authorizes a city legislature to establish and impose sewer rents pursuant to Article 14-F of the General Municipal Law, known as the “Sewer Rent Law”. “Sewer rents” are defined in subdivision 1 of section 451 of the General Municipal Law as a scale of annual charges based on either:
(a) the consumption of water on the premises connected with and served by the sewer system;
(b) the number and kind of plumbing fixtures on the premises connected with and served by the sewer system;
(c) the number of persons served on the premises connected with and served by the sewer system;
(d) the volume and character of sewage, industrial waste and other wastes discharged into the sewer system; or
(e) any other equitable basis determined by the local legislative body, including but not limited to any combination of the foregoing.
Notwithstanding the language of (e), above, section 451(1) has been interpreted as generally limiting the right of municipalities to impose sewer rents upon users of the system. For example, in Rock Hill Sewerage Disposal Corporation v. Town of Thompson, 27 A.D.2d 626, 276 N.Y.S.2d 188 (3rd Dept., 1966), it was stated that:
Sections 451 and 452 of the General Municipal Law. . .limit the authority of municipalities. . .to fix sewer rents on the basis of actual use of the sewerage system by property owners. Although section 451 lists several methods of fixing rentals for the use of sewerage systems under sub-div. l(e), and permits a Municipal Board to fix the charge on any other equitable basis, the statute generally limits the method employed to the use of the sewerage system. (276 N.Y.S.2d at 190, emphasis added).
This interpretation of the statute has been followed in opinions issued by State administrators (9 Op.State Compt. 320 (1953); 10 Op.State Compt. 150 (1954); 12 Op.State Compt. 480 (1956); 1967 Op. Atty.Gen. 110; 24 Op.State Compt. 873 (1968); 1969 Op.Atty. Gen. 114).
The City of Hudson has, in fact, provided that only “users” of the sewerage system are liable for its charges. This is so stated in section 3 of Local Law number 3, 1969, of the City of Hudson:
The sewer use charges or rents as finally adopted by the common council shall be applicable and imposed upon all users of the city sewer system. . .(emphasis added).
The property in question was not connected to the sewerage system. The owner was not then a “user” and therefore should not have been charged a sewer rent. May the City reimburse him for these charges?
Generally, an administrative a refund of taxes may only be made in accordance with the provisions of sections 556 and 556-a of the Real Property Tax Law. The right to a refund under such circumstances is dependent upon a showing that an error as defined in section 550 has occurred. In this instance, however, the charge in question is a rent and not a tax (although enforcement of collection of delinquent water rents may be had in the same manner as delinquent taxes, see General Municipal Law, §452(4)). Therefore, any right to reimbursement must be found in some other section of law.
In 17 Op.State Compt. 418 (1961), certain property owners were erroneously billed by the City of Beacon for sewer rentals although their properties were not connected with the city sewer. The State Comptroller held that the owners of such properties had equitable claims in contract against the city, and the city could therefore pay those claims under subdivision 5, section 20 of the General City Law. Subdivision 5 provides that a city council has the power “to pay or compromise claims equitably payable by the city, though not constituting obligations legally binding on it. . .”.
Thus, the homeowner must base his claim on an equitable right in order to be able to recover these payments. However, he can only recover a maximum of charges for six years because “where a purely equitable remedy is involved, there is a six-year statute of limitations, applicable to cases not otherwise provided for, which applies thereto” under section 213 of the Civil Practice Law and Rules (36 NY Jur., Limitations and Laches §153 (1964); see also, 35 NY Jur., Limitations and Laches §§26, 27, 28 (1964); 3 Op.Counsel SBEA No. 11). And, subdivision 5 of section 20 specifically prohibits a city from waiving the defense of the statute of limitations, regardless of the equity of the claim (see, 9 Op.State Compt. 440 (1953)).
It is assumed that the homeowner was not instructed by City authorities to connect with the public sewer system. If he was notified and failed to act as required by the City Code, he would be in violation of the local statute. Therefore, his alleged equitable claim for recovery of the sewer charges might fail on the ground that he had not shown good faith in his dealings with the City (see generally, 20 NY Jur., Equity §§102-116 (Rev., 1977)). It is a question of fact to be answered by local officials whether or not this property owner received notice and failed to act.
April 16, 1979