The Ding an Sich

The Ding an Sich

At a table in the back of the Media Res, the Founder sat with a rainbow and a unicorn.  ‘Where the hell were you guys in Hamilton’, he asked.  ‘I could have used you.’

‘Dude’, the rainbow said.  ‘’There’s two of us.  There are how many of you?’  If he had hands, he would have extended them palms up.

‘I am troubled’, the Founder said.

The rainbow looked at the unicorn.  ‘What letter does the name of the current day of the week end in’, he asked.

The unicorn blew some forelock hair out of his eyes.  He looked kind of like Owen Wilson, the Founder thought, if Owen Wilson had, you know, a big horn growing out of his forehead and hoofs for hands and feet.  The Founder reflected that the unicorn did not look very bright.

‘’Y’’, the unicorn said.

‘The day ends in ‘y’ and the Founder is troubled’, the rainbow said.  ‘What a fucken surprise.’

.

The Founder stood up, made his way to the bar and claimed his thirteenth beer.  The bartender had a triangular, sallow face.

‘Could I get some delirium tremens with that’, the Founder asked.

‘That will cost you’, the bartender said.

‘But the thirteenth is free’, the Founder said. 

‘DTs are extra’, the bartender said.

‘Fuck you’, the Founder said, and went back to join the rainbow and the unicorn.

.

‘Two things are troubling me’, the Founder said.  ‘The first is the problem of The Thing Itself.’

‘You mean the world itself, independent of our perception of it?’

‘Correct.’

‘You are troubled because we know it’s there, or at least we think it is there because that is the easiest way to explain things, but we can’t know it.  Trying to know it is like asking what color a gallon is.  What we know as knowing and the world itself are incommensurable with each other.’

The rainbow was bent over.  If he had elbows, they would be resting on where his knees would be, if he had knees.  The unicorn positioned his head in front of the stage where live music performed on Friday and held his phone out for a selfie.  ‘What letter does ‘Friday end in’, he asked the rainbow.  The Founder reflected that he could see how some women would be attracted to the unicorn as a sperm donor.  He also reflected that the rainbow was kind of a putz.

‘The other thing that is bothering me is the Attorney General’s position on park owners who include reimbursements for property tax attributable to a tenant’s home in lot rent.’

‘Why is that?’

‘Because the Attorney General does not understand that you can never, ever get to the thing itself.’

‘Isn’t that the Attorney General’s problem?’

‘It would be, if the AG’s office would stop busting people for it.’

.

The beer tasted like Guiness, but it was heavier and more bitter.  ‘Isn’t this when the strippers appear’, the Founder asked the rainbow.  ‘That’s what usually happens around now.’

‘The bartender thinks you have had enough of the strippers’, the rainbow said.

‘But can I keep drinking the beer?’

The rainbow made some semaphore signs to the bartender.  The bartender held his arms over his head, pushed his elbows out, and held a thumb and forefinger parallel to the floor.  The rainbow turned to the Founder and said, ‘The boss says, so long as you have the money to pay for fourteen through twenty-five, knock yourself out.  Just don’t break any crockery.’

.

‘The AG thinks that RPL §233(g) prohibits park owners from seeking reimbursement for property tax through rent’, the Founder said.

‘Last time we came here’, the unicorn said, ‘I met a chick from Kansas.  I wonder if she will be here tonight.’

‘That was the time before last’, the rainbow said.  ‘And you are a dumbass.’

The unicorn sucked on his beer and pouted.

.

‘Why is this even an issue’, the unicorn said, ‘Allocation of property tax, I mean?’

‘Who owns a mobile home in a park’, the rainbow asked the unicorn.

‘The tenant’, the unicorn said.  ‘The park owner owns the land.’

‘So the park owner has none of the attributes of ownership regarding the home?’

‘None at all.’

‘But the park owner owns the land?’

‘That is right.’

‘So the park owner owns the land but the tenant owns the structure?’

‘Yes.’

The rainbow reached the point where he would take a swig of beer if he had a hand, a mouth and a liver.  ‘Are manufactured homes real property or personal property’, he asked.

The unicorn looked to the Founder for help and then back at the rainbow.  ‘Why are you asking me’, he said.  ‘You’re the smart one.’

‘Answer the question’, the rainbow said.

‘Well, they’re called mobile homes’, the unicorn said.  ‘Real estate is property that can’t be moved.  That’s why the French call it immobilier.  The adjective ‘mobile’ implies that they can be moved.  So, they should be personal property.’

‘Could you and a team of your friends pull a mobile home that has been blocked, leveled and tied down?’

‘I’m not a horse’, the unicorn said.  He looked like Owen Wilson would look, if the rainbow had called Owen Wilson a horse.

‘Can a person drag a mobile home behind a Ford F-150, as if it were an RV?’

‘No.’

‘Why not?’

‘Because you need a special truck, a special license and very expensive insurance to move a manufactured home.’

‘What does it cost to do that?’

‘Movers charge seven to ten grand to tear down, move, block, level and tie down a home.  It’s another three to five grand to hook up utilities, skirt the home and build steps.’

‘And can the average tenant in a manufactured housing park afford that?’

The unicorn looked nervously from the founder to the rainbow.  A drop of sweat fell from his forelock.

‘It’s not a trick question’, the rainbow said.

‘On second thought, I think mobile homes are not mobile’, the unicorn said. 

‘If they are not mobile, are they real or personal property?’

The unicorn’s hoofs began to sweat.  ‘Real property is not mobile’ he said.  ‘So, I think they should be real property.’

‘Will banks take mobile homes are security for a mortgage’, the rainbow asked.

‘No.’

‘And why not?’

The unicorn looked to the rainbow and the Founder for an answer.

‘Banks say that manufactured homes are personal property’, the rainbow said.

‘But – didn’t we just say that they are real property?’

‘You said that they are real property’, the rainbow said.

The unicorn looked like Owen Wilson would look like if a bird shat on his convertible.

‘How are mobile homes attached to a foundation depreciated for federal income tax purposes?’

The unicorn looked like he really missed the woman from Kansas.  ‘They are depreciated as residential real property’, he said.

‘So – a mobile home is both real property and personal property’, the rainbow said.

The unicorn looked like a one-point deer caught in the headlights.

‘Can a triangle be both equilateral and scalene?’

‘No.’

‘Can it be acute and obtuse?’

‘That’s not what I said.’

‘Can it be isosceles and –‘

‘Knock it off’, the Founder shouted.  A few people looked over to the table where the three sat.  The bartender reached for something under the bar.  A pink flamingo walked over from the bar and told the rainbow to keep it down.  It was a respectable establishment, she said, and what would the neighbors think?

‘Kiss my ass’, the rainbow said.

‘You are a rainbow’, the pink flamingo said.  ‘You don’t have an ass.’

‘Dude’, the flamingo said.  ‘I just work here.’  Then, she flapped a wing and waddled off toward the bar.

The Founder took a drag on an imaginary cigarette and said, ‘I thought DTs were extra.’

The rainbow nodded toward the bartender and said, ‘It looks like he likes you’.

The Founder looked toward the bar and said, ‘Manufactured homes on foundations are like light, which is a wave or a particle depending on how you observe it.  A mobile home on a foundation is real property for some legal purposes and it is personal property for others.’

The rainbow turned to the unicorn with a smug look and said, ‘Imagine how much sense this man would make when he is sober’.

.

The rainbow produced a sheet of paper that was limp and wet, like a sheet of paper in a Marx Brothers movie and said to the unicorn, ‘Read’.  The unicorn sat up straight and held the paper in his hoofs.  The Founder reflected that he was, actually, very handsome and that he had a great speaking voice.  He wondered if he could sing, too.

‘RPTL §102(12)(g)’, the unicorn read.  “Real property”, “property” or “land” mean and include: Forms of housing adaptable to motivation by a power connected thereto, commonly called “trailers” or “mobile homes”, which are or can be used for residential, business, commercial or office purposes, except those (1) located within the boundaries of an assessing unit for less than sixty days, (2) unoccupied and for sale or (3) “recreational vehicles” that are four hundred square feet or less in size, self propelled or towable by an automobile or light duty truck and used as temporary living quarters for recreational, camping, travel or seasonal use.’

‘So, for municipal finance purposes’, the unicorn said, ‘manufactured homes are real property.’

‘Keep reading’, the rainbow said.

‘The value of any trailer or mobile home’, the unicorn read, ‘shall be included in the assessment of the land on which it is located; provided, however, that if either the trailer or mobile home or the land on which it is located is entitled to any exemption pursuant to article four of this chapter, other than the exemption authorized by section four hundred twenty-five of this chapter, such trailer or mobile home shall be separately assessed in the name of the owner thereof.’

‘So, what does that mean’, the rainbow asked.

‘I think it means that, even though a mobile home in a park is owned by the tenant instead of by the park, its value is included in the park’s property tax assessment and the park owner, rather than the tenant, is subject to property tax thereon.’

‘So the park owner is subject to tax on property that he or she does not own.’

‘Correct.’

‘Oh, man’, the Founder said, ‘I am glad you guys did not show up in Hamilton’.  Then, he put both palms over his mouth and sprinted toward the jacks.

.

After the Founder returned, he asked, ‘Isn’t that unconstitutional?  Taxing X on Y‘s property?’

‘You would think’, the rainbow said. ‘The issue was litigated in New York State Trailer Coach Association v. Steckel, 215 N.Y.S.2d 487 (N.Y. 1961).  Until the 1950s, mobile homes were treated as personal property.  Since people lived in mobile homes and people used municipal services like schools, fire and police departments and since personal property is not subject to school and property taxes, towns found that they were short revenue.  The law was changed to address that.  The predecessor to RPTL §102(12)(g) stated that manufactured homes in parks are real property and that park owners are responsible for paying property tax thereon.  A park owner in Vestal sued and the case made it to the Court of Appeals.

‘In Steckel,the park owner cited Hoeper v. Tax Commission of Wisconsin, 284 U.S. 206 (1931) as authority for the position that requiring a taxpayer to pay tax on property owned by someone else is a violation of due process under the fourteenth Amendment’, the rainbow continued.  ‘In Hoeper, the taxpayer was a married man who filed an income tax separately from his wife.  The Wisconsin taxing authority required him to include his wife’s income in taxable income even though he did not own that income under state law.  The Supreme Court held for the taxpayer, stating, ‘[A]ny attempt by a state to measure the tax on one person’s property or income by reference to the property or income of another is contrary to due process of law as guaranteed by the Fourteenth Amendment.’

‘Sounds like Steckel should have been a slam dunk for the taxpayer’, the unicorn said

‘You would think’, the rainbow said, ‘But the Court of Appeals distinguished Hoeper because it was an income tax case.  The difference, the Court of Appeals said, was that a park owner can pass the economic burden of property tax on to a tenant through rent, while the taxpayer in Hoeper couldn’t shift his wife’s income.’

‘Sounds like the Court of Appeals was cutting the baloney kind of thin’, the Founder said.

‘Yes, it was’, the rainbow said.  ‘But it’s the law.’

‘I would really like to see the strippers’, the unicorn said. 

‘The Third Department re-examined the issue in 1990’, the rainbow said, ‘in People ex rel. Higgins v. Leier, 564 N.Y.S.2d 539 (N.Y. App. Div. 1990).  In that case, a park owner attempted to charge each tenant a separate fee for the share of the park’s property tax attributable to the applicable tenant’s home. The court held that that contravened RPL §233(g), which prohibits park owners from charging a separate fee for property tax.  So, park owners can’t make tenants directly liable to the taxing authority for their share of property taxes or charge a fee attributable to property taxes.  Park owners may, however, pass the economic burden of property tax on to tenants.  In its own words, the court said, ‘The operating expenses of a park owner, including real property taxes, are properly recouped through the rent charged.’’

The unicorn looked puzzled.  ‘So, let me get this straight’, he said.  ‘A park owner can charge a tenant money to offset the cost of the park owner’s property tax attributable to the tenant’s home.  She just has to call that money ‘rent’.’

‘I think it is more than what you call it’, the Founder said.

‘What do you mean’, the unicorn said.

‘I think it goes to the issue of the thing itself.’

.

‘What do we know about the facts of Higgins’, the Founder asked.

‘We know that the park owner explicitly said that these fees were not rent and that they had to be paid separately from rent.  From the statement of facts, it is unclear whether the park owner instructed the tenants to pay their share of the park’s taxes directly to the taxing authority, or whether the fee was paid to the park owner on the tenants’ behalf.  If it was paid to the park owner, it is not clear whether it was put into a separate account or commingled with the park owner’s funds.’

‘Why is that relevant’, the unicorn asked.

‘If it was commingled, it looks more like rent.  If it was kept in a segregated account, it looks more like a tax or a fee.’

‘Did the Higgins court allow park owners to pass on the economic burden of property tax attributable to tenants’ homes even if they did not charge a separate fee for rent’, the unicorn asked.

‘Yes’, the rainbow said.  ‘In its own words, the court said that ‘The operating expenses of a park owner, including real property taxes, are properly recouped through the rent charged’.  The issue is whether money charged by a park owner to a tenant is a fee or rent.’

‘None of these cases or statutes define ‘rent’, ‘fee’ or ‘tax’’, the Founder said.  ‘Isn’t that a problem?  I mean, if the court held that a park owner can’t make tenants directly responsible for tax or charge a fee for tax but can charge rent equal to tax, don’t these terms need to be defined?

‘Listen to the man’, the rainbow said to the unicorn.

‘What man’, the unicorn asked.

‘The only man sitting at the table, dumbass.’

.

‘What is rent’, the rainbow asked the unicorn.

‘Ask me something easier’, the unicorn said, ‘Like, ‘What is love?’’

‘Under RPL §6-A(5) (Good Cause Eviction Law)’, the rainbow said, ‘rent is consideration demanded or received for or in connection with the possession, use or occupancy of housing accommodations.  The Glossary of Rent Regulation Terms published by the NYC Rent Guidelines Board is not authority, but it is illustrative, and it contains a similar definition.’

‘A fee, by contrast’, the rainbow continued, ‘is a separate item charged to a tenant by a landowner in consideration for a specific good or service provided by the landowner to the tenant, or as compensation paid by the tenant to the landowner as compensation for damage or harm done.  Fees might include water and sewer fees, gym dues, parking fees, storage returned check fees, or background check fees.’

‘So, a fee is completely different from rent’, the unicorn said.

‘Not completely’, the rainbow said.  ‘A fee is different from rent in that it is charged for a specific item that arises from the parties’ dealings with each other separate from possession, use or occupancy of land.  It is similar to rent in that it is a contractual charge imposed by a landowner on a tenant.’

The unicorn walked to the bar and ordered a dirty martini.  When he returned, the rainbow asked him, ‘What is a tax.’

‘How does the Internal Revenue Code define that term?’

‘It doesn’t.’

‘So, why are you asking me?

‘A tax’, the rainbow continued, ‘is a mandatory payment or charge collected by local, state or national governments from individuals or businesses to cover the costs of general government services, goods and activities.’

‘How can we distinguish these items’, the unicorn asked, ‘Rent, fee, tax?’

‘I ask the questions here’, the rainbow said.

The unicorn took a whetstone out of his backpack and began to sharpen his horn.

‘There are two distinctions’, the rainbow said.  The first is the remedy available in case of a breach.  A tenant can be evicted for non-payment of rent.  By contrast, a tenant can not be evicted for nonpayment of, say, a late fee or a water bill.  The only remedy available to a landlord in that case is a money judgment.  So, that’s one distinction between a fee and rent’

‘But if a tenant makes a lump-sum payment’, the Founder interjected, ‘How do you allocate those monies between fees and rent?’

‘Shut up’, the rainbow explained.  ‘That’s a can of worms.  And ‘money’ is a non-count noun.’

‘How do you put up with him’, the Founder asked the unicorn.

‘I don’t’, the unicorn said.

‘In the case of non-payment of property tax’, the rainbow continued, ‘the town can seize the taxpayer’s property in an in rem proceeding.  That is a remedy that only the taxing authority can exercise.  This remedy can only be exercised against the taxpayer.’

‘So –‘, the unicorn asked, ‘liability for an in rem proceeding can never be transferred?’

‘What do you think’, the rainbow asked.

The unicorn looked to the stage where the strippers performed, when they performed.  Someone had wrapped a red ribbon around the dancing pole so that it looked like the pole in front of a barbershop.

‘Answer the question’, the rainbow said.

‘I think not’, the unicorn said.  ‘Liability for an in rem proceeding travels with the assessment.  The party listed on the assessment, and only the party listed on the assessment, can be vulnerable to an in rem proceeding.’

‘Not bad for a dumbass’, the rainbow said.

The unicorn pawed a hoof and glowered.

‘So, what happens if a park owner does not pay the property tax attributable to a tenant’s home?’

‘The town can seize the park in an in rem proceeding.’

‘And can the town seize the home from the tenant?’

‘I do not believe so, although if they take over the whole park, the tenant might lose the home.’

‘And what happens if a tenant does not pay money for property tax attributable to the tenant’s home?’

‘The park owner can seek a money judgement against the tenant.’

‘And can the park owner seize the home in an in rem proceeding?’

‘Of course not.  That remedy belongs only to the town.’

‘But if the tenant shorts the park owner and the park owner defaults on her taxes, the town can start an in rem proceeding?’

‘Correct.’

‘So, the remedies available to the town and the park owner are different?’

‘Yes.’

‘So, the rights and obligations are different?’

‘Yes.’

‘Can you really pass on a right if you can not pass on the remedy?’

‘It is the issue of the thing itself’, the Founder said.  ‘A park owner can’t pass on a tax liability, because of the nature of a tax liability.  Once the obligation runs to a party other than the assessed party, it is a contractual obligation rather than a tax liability.  It becomes something else.’

‘So that means it is not a tax’, the rainbow said.  ‘How do we know it is not a fee?’

‘Because a fee is paid in exchange for a specific, stated good or service, like water, sewer or bike storage.  In this case, the item is not a fee for, say, bike storage, and it can’t be a fee for the payment of taxes because the tenant is not the taxpayer and you can’t pass on the obligation to pay taxes for the reasons described above. It is, however, paid by a tenant, who pays the park owner a fee for the use, occupancy and possession of land. That means that the item can only be a portion of the fee paid for the use, occupancy and possession of the lot, because that is what the tenant generally pays the park owner, and it can’t be anything else.’

.

‘You said there were two ways to distinguish between rents, taxes and fees’, the unicorn said.  ‘One is the difference in remedies.  What is the other?’

‘What you call them is important’, the rainbow said.  ‘I think that, if you call an item ‘rent’, it is rent.’

‘Isn’t that just semantic mumbo-jumbo’, the unicorn said.  ‘I mean, money is fungible.  Calling Y X doesn’t make it X’.

‘I taught you that word’, the rainbow said.

The unicorn pawed the ground.  A whisp of vapor blew out of one nostril.

‘It is semantic mumbo-jumbo only if you apply the definitions after the fact’, the rainbow said.  ‘By contrast, if the lease states explicitly that an amount to be paid is rent and if both parties read, understand and agree to the lease, I believe that that makes it rent.’

‘Why is that?’

‘Because a lease is a contract and a contract is a meeting of the minds.  Rent is consideration for the use or possession of housing.  A fee is an item charged for something else, like water, sewer or a bounced check.  If the lease says that an item is rent, that means that the parties agree that the tenant pays it in exchange for the use or possession of property, rather than in exchange for something else.  If that’s what the parties agree, that’s what it is.’

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The unicorn furrowed his comely brow.  ‘That all makes sense’, he said, ‘but in this case, the item that you claim is rent is measured with reference to something else.  In most cases, an item of rent is defined as a dollar figure.  In this case, it is defined as the portion of the park owner’s property tax attributable to the assessed value of the tenant’s home.  For example, if tax millage is $8.05 per $1,000 value and a tenant’s home is assessed at $18,000, $145 of the park owner’s annual property tax bill will be attributable to that structure.  To offset this cost, the park owner might charge the tenant $12.08 per month.  Since that item is measured with reference to the park owner’s tax bill, doesn’t that make it something other than rent?’

‘Do you invest in futures and options’, the rainbow asked.

‘My uncle does’; the unicorn said.

‘Does he trade ag futures?’

‘Sometimes.’

‘Has he ever taken a position in soybeans?’

‘I believe so.’

‘What are the specs of a soybean futures contract?’

‘5,000 bushels or 136 metric tons per contract.’

‘Does he ever take a position in physical beans?’

‘No.’

‘What is the delta of a futures contract?’

The unicorn looked to the Founder for help.  The Founder wiped his mouth with the back of his hand.  ‘It’s a futures contract’, he said.  ‘I don’t think it is a trick question.’

‘A futures contract has a delta of one’, the unicorn said.  ‘If beans increase in value by one dollar, the contract increases by a dollar.  If they fall in value by a dollar, it decreases in value by a dollar.’

‘So a long position in a soybeans contract is the same as ownership of soybeans.

‘I believe so.’

‘When your uncle is long a contract, does he have to pay to store the beans?’

‘No.’

‘Does he have to pay to insure them?’

‘No.’

‘Can he lend them out or borrow against them?’

‘No.’

‘If there is a fire in the grain bin, is he on the hook?’

‘To the contrary.’

‘Can he eat them?’

‘Of course not.’

‘Why not?’

‘Because he doesn’t own them.’

‘But you just said that he owned them.’

The Founder remembered that, after a group of Oxford dons met with Gandhi, one remarked, ‘Now I understand why they killed Socrates.’  The Founder moved the whetstone from the unicorn’s bag to his own.

‘So, delta one exposure to an item does not mean ownership of the item’, the rainbow said.

‘No.’

‘Economic exposure is not legal ownership.’

‘I believe not.’

‘Wouldn’t this also mean that the fact that an item of rent is measured with respect to a portion of the park owner’s property tax does not make it a tax or a fee.  It just means that that is how the that item of rent is calculated.  It is not the thing itself.  It is just measured with reference to the thing itself.  The thing itself – the legal rights and liabilities inherent in an item of payment, in this case – are determined by the agreement between the parties and the remedies available to the parties in case of breach, not the method for calculating the item.’

The unicorn looked weak and pale.  ‘Yes’, he said. 

.

‘What does this have to do with reality’, the unicorn said.  ‘Or do you just like torturing me?’

‘Oh, I like torturing you’, the rainbow said.

‘The Attorney General’s office has been busting park owners’, the Founder said.  ‘They take the position that rent measured with reference the portion of a park owner’s property tax attributable to the assessed value of the applicable tenant’s home is prohibited by RPL §233(g).  They have asked park owners to disgorge years of rent payments and they have subjected the park owners to draconian discovery requests.  The park owners would like to provide clean, safe and affordable housing to their residents, but they can’t do it when they are under attack like this.’

‘They have their head up their ass’, the rainbow said.  ‘The AG, I mean’

‘They will have to take it out’, the Founder said.  ‘A park owner who they have busted for this issue has filed for a declaratory judgment.  That head will be handed to them in court.’

‘They haven’t read Steckel, the rainbow said.

‘They haven’t read Kant, either.’

‘Where are the strippers’, the unicorn asked.

‘Wait a while’, the rainbow said.  ‘This is the Media Res.  We will be here for a very long time.’