A county judge has ruled Nassau's 'block fee' is 'excessive' and must be reduced, court documents show

The $300 fee imposed by Nassau for some real estate transactions is "excessive, inappropriate and serves as an unconstitutional tax," and must be reduced, a county judge has ruled.

In his June 9 ruling, Nassau State Supreme Court Judge Gregg Roth said the county has 60 days to lower its "block fee" — which residents pay to the county clerk's office after recording, satisfying or canceling a lien, such as a mortgage — to an amount that matches the cost to administer the service.

Residents who pay the fee between June 10 and the date the county sets the new amount will be entitled to a refund of the difference, Roth wrote.

The court has not yet determined if individuals who paid the fee between 2017 — when the statute of limitations in the case went into effect — and June 9, 2024, will be eligible for refund or if the plaintiff can file a class-action lawsuit.

The case was brought by John Madson, of Rockville Centre, who on June 5, 2023, paid the $300 fee, along with a $50.50 "mortgage satisfaction fee," after paying off his mortgage. Madson declined to comment on the decision.

On the back of the check Madson used to pay the fee, he wrote: "I hereby pay this $350.50 ‘fee’ under protest on behalf of myself and all others similarly situated who have paid this fee ... and demand that all or part of this $350.50 be repaid or returned to each such person as required under New York law."

"The county charges exorbitant fees," said Jason Giaimo, one of Madson’s attorneys. "And they use the money that they collect from those fees to offset ... general revenue purposes for various departments and expenditures that have absolutely nothing to do with the purpose behind the fee, which is in contravention of the law. What they're essentially doing is charging a tax and calling it a fee so they don't have to tell their residents they've increased taxes." 

Nassau immediately appealed the decision, records show.

The current fee was set during the term of former Nassau County Executive Edward Mangano and approved nearly unanimously by the GOP-controlled Legislature. The only effort to reduce the amount was blocked by the Nassau Interim Finance Authority, a state oversight board in control of the county's finances.

"Two preceding county executives and numerous legislative sessions did not feel it was necessary or advisable to reduce the block fee with the exception of the action of the legislature seeking to reduce the block fee from $300 to $225, which was blocked by NIFA," said Chris Boyle, a spokesman for Nassau County Executive Bruce Blakeman, a Republican.

Blakeman's attorneys argued in court filings the fee was properly enacted and was a "valid exercise of legislative authority."

The block fee was originally $10 but increased to $75 in 2010 under Mangano and hiked twice more by the disgraced former county executive. The fee grew to $150 in 2012 and doubled again to $300 in 2015, with the Legislature voting 18-1 to approve the hike. Mangano attempted to boost the fee to $400 in 2017 but lawmakers blocked the effort.

Current and former county officials deposed by Madson’s attorneys testified Nassau never conducted an analysis to determine how much to charge for the block fee and there's been no significant changes in the costs to administer the fee.

Revenue from the fee goes into Nassau’s general fund and is not used to administer the service, which Roth said runs counter to previous court judgments against the county.

The Long Island Board of Realtors, which has criticized previous hikes of the block fee, said Nassau should set the new amount "commensurate with the services provided" and should not utilize the funds "as a revenue generator or to fund unrelated purposes."

In a separate 2020 case, a Nassau judge ruled the county's $355 fee for verifying tax maps was an "unlawful and unconstitutional tax" on deed filers. The county in 2023 lowered that fee to $270.

 Legis.Seth Koslow, a Merrick Democrat challenging Blakeman in November, called on his opponent to lower the block fee to an amount matching the actual cost of the service.

"The court has now confirmed what every Nassau homeowner already knew: this so-called 'block fee' was never about service," Koslow said. "It was about squeezing residents for revenue. It was an illegal backdoor tax then and it’s unconstitutional now." 

In Suffolk, the general verification fee for all documents is $200. An additional verification fee of $200 is assessed to mortgage-related documents.

By Robert Brodsky

robert.brodsky@newsday.com@BrodskyRobert

Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.