Tag Archives: Revaluation

Apartment Complex Wins Assessment Reductions at Trial

A New Jersey Tax Court judge reduced the assessment for two of the three years under appeal on an apartment complex in the Town of Phillipsburg.  The Subject Property contained 96 apartment units on a 4.19 acres parcel in a residential zone.  At trial, the parties agreed that the highest and best use of the property was as an apartment complex, and that the income approach to value was the appropriate method of valuation.  The parties differed though on the appropriate vacancy and collection loss, reserves for replacements, and capitalization rates.  Upon review of the testimony and evidence set forth at trial, the judge agreed with the property owner’s vacancy and collection loss, and reserves for replacements.  However, the judge found the Town’s expert’s capitalization rate analysis more credible.  Once these expenses were applied to the property’s income, the court affirmed the assessment for 2009, but found reductions were necessary for the 2010 and 2011 tax years.

A reduction in an assessment is only possible after a property owner rebuts the presumption of correctness granted to the assessment.  To be successful, a property owner must present sufficient evidence to rebut the validity of the assessment, and then the burden is on the taxpayer to prove, by a preponderance of the evidence, that the assessment is erroneous.  Ford Motor Co. v. Twp. of Edison, 127 N.J. 290, 312-315 (1992).  The municipality will then have an opportunity to present its own evidence to support its value of the subject property before the judge weighs the evidence to decide which witness presents the more credible evidence and establish an assessment based on the information before the court.

A copy of the Tax Court’s unpublished opinion in Corliss Apartments L.L.C., v. Town of Phillipsburg, (November 1, 2013), can be found here.

For more on evidence issues in condemnation cases, please see the following blog posts:

Appeal Involving Apartment Complex Reaffirms Presumptions

Hilton Hotel Assessment Reduced Following Trial

Unreliable Testimony Dooms Taxpayer’s Appeal

Taxpayer Clears One Hurdle But Trips Over Another

2 Comments

Filed under Court Decisions

Despite Threat, Jersey City Reval Still Not Cancelled

Despite threatening to cancel the city-wide property revaluation in Jersey City, Mayor Steven Fulop has not followed through with any formal action to cancel the City’s first revaluation since 1988.  Fulop had voted against the revaluation contract in 2011 as a member of the Jersey City Council, at which time the revaluation company had a former City business administrator on its payroll.

According to Hudson County spokesman Jim Kennelly, the formal process would involve the Mayor writing a letter to county tax officials seeking approval from the state Division of Taxation to cancel the revaluation.  No such request has been sent to date.

The average equalization ratio, used to translate the assessed value to market value, for 2013 is about 33%, meaning that a property assessed at $100,000 has an indicated true value of approximately $300,000.  The average assessed value of a property in the city is about $93,000. The average annual property tax bill is about $6,500.

We’ll keep an eye on this story as the situation develops.  For more on this story, please see the following articles:

Jersey City Mayor Fulop has not officially canceled property revaluation two months after promising to do so

Jersey City mayor-elect Fulop putting halt to property revaluation

For more on revaluations, please see the following blog posts:

Mercer County Board of Taxation Orders Four Municipalities to Undertake Revaluations

Monroe Township Ordered to Undertake Revaluation

Municipalities Reassessing Properties Despite Recent Revaluations

Leave a comment

Filed under In the News

Mayor Voting with His Feet: Selling house because his taxes are too high

The mayor of Egg Harbor Township is selling his home after a revaluation in his municipality caused his taxes to increase 60% to over $31,000.  The home was assessed in 2012 for $463,800, which equated to a market value of roughly $750,000.  The new assessment values the home at $1,100,400.  Currently five homes are on the market in his neighborhood with an average price of $1.3 million which suggests that the new assessments may be too conservative because the asking prices are about 60 percent higher than the new assessments.  McCullough plans to look for a place in Egg Harbor’s West Atlantic City section, but has a back-up plan in place—relocating to his 1,200-foot waterfront condominium in North Palm Beach, Florida where the taxes are only $2,569.

For articles discussing the topic, please see the following:

Egg Harbor Township mayor priced out of home by taxes

Egg Harbor Township mayor is selling his home because taxes are too high, report says

Sandy damage complicates Egg Harbor Township revaluation; even the mayor has filed an appeal

For articles discussing actions taken by other property owners because of high property taxes, please see the following:

High property taxes force owner of historic Ocean City mansion to knock it down – Star Ledger

High taxes force demolition of Ocean City estate – Press of Atlantic City

For previous blog posts on property taxes, please see the following:

Will Income Tax Be Used to Offset Property Taxes?

Senate Passes Tax Appeal Reform for Monmouth County

Property Owner Keeps Tax Abatement After Municipality Failed to “Turn Square Corners”

1 Comment

Filed under In the News

Jersey City Revaluation Imperiled?

English: This is a picture of Steven Fulop

Steven Fulop (Photo credit: Wikipedia)

Jersey City Mayor-elect Steven Fulop has announced that the city-wide property revaluation has been halted, and warned that an audit of the revaluation company hired by the prior administration may be performed because of alleged ties to a former city business administrator.

Fulop’s campaign had impugned outgoing Mayor Jeremiah Healy for ordering the revaluation, suggesting that it would result in property tax hikes that property owners could not afford.

Fulop officially becomes Mayor next week and has indicated that the City will not finish paying for the revaluation, at least not yet.  He had voted against the revaluation contract in 2011 as a member of the Jersey City Council, at which time the revaluation company had a former City business administrator on its payroll.

Jersey City has not undertaken a revaluation since 1988, and the average equalization ratio, used to translate the assessed value to market value, for 2013 is about 33%, meaning that a property assessed at $100,000 has an indicated true value of approximately $300,000.  

More information about this story is available in this story by Terrence McDonald in today’s Jersey Journal.

1 Comment

Filed under In the News

Town’s Failure to Treat Property Owner Fairly Leads to Reversal by Appellate Division

A New Jersey appellate court recently reversed a trial court’s dismissal of a tax appeal, and found that the City of North Wildwood failed to act fairly in litigation with the property owner.  The property at issue is improved with a seven-story mixed-use tower, a 160-slip marina and a 3900 square-foot marina services building, and a one-story restaurant.  Plaintiff Beach Creek owns the land underlying the Towers but not the condominium units. The owner of the tower has a ninety-nine-year lease for the land underlying the Towers, and the rent is income to Beach Creek.  Following a revaluation in 2006, the City increased the assessed value of Beach Creek’s property from $1,526,200 for 2005, with an equalized value of $3,225,247, to $14,612,900 for 2006. The City assessed the property at $14,288,900, for 2007 and 2008. Beach Creek filed a timely challenge to its 2007 assessment on March 15, 2007 and a timely challenge to its 2008 assessment on March 24, 2008.  Beach Creek filed tax appeals for 2007 and 2008, and an action in the Chancery Division to challenge the 2006 assessment.

In connection with the pending Tax Court actions, the City obtained an appraisal report from its expert on March 12, 2009 which concluded that the “retrospective market value of [Beach Creek's] property for 2006-2009 tax years” was $4.6 million.  The City provided its appraisal to Beach Creek in discovery and filed it with the Tax Court.  As of March 2009, the City had information that the full and fair value of the property in 2007 and 2008 was nearly $10 million lower than the assessed value for those years, and the City thereafter assessed the property at $4.6 million for 2010.

At trial before the Tax Court, Beach Creek’s expert separately valued the different uses on the property after determining that the most reliable appraisal would be one reached by using the valuation method most appropriate for each of the property’s several components.  Beach Creek’s expert used the income approach in valuing the marina and the land underlying the Towers, the cost approach to value the marina services building, and the sales comparison approach to value the restaurant. The value he assigned to the entire property for 2007 and 2008 is the total of the separate values of the components in each of those years.

At the conclusion of Beach Creek’s case, the Tax Court granted the City’s motion to dismiss concluding that Beach Creek had not produced evidence sufficiently definite, positive and certain in quality and quantity to overcome the presumption of validity that attaches to the assessment under New Jersey law. R. 4:37-2(b); Pantasote Co. v. City of Passaic, 100 N.J. 408, 412-14 (1985).  The court first determined that the hybrid approach used by Beach Creek’s expert of “taking one approach for each of the three or four aspects of the property and then somehow just adding them together and coming up to value,” was unprecedented.  Next, the court found Beach Creek’s expert’s application of the cost and comparable sales approaches flawed, and therefore the court had no basis for assigning a true value to the property based on Beach Creek’s evidence.

On appeal, the Appellate Division found Beach Creek’s evidence was adequate to withstand the City’s motion. As to a lack of precedent for the hybrid valuation approach, the Appellate Division cited to Livingston Mall Corp. v. Livingston Twp., 15 N.J. Tax 505, 508-09 (Tax 1996), where the court was faced with valuing a mall that included three anchor department stores and non-anchor mall stores that were leased. The Livingston Mall court concluded that the income approach failed to capture the value of the anchor stores because of a lack of data, and therefore it would be appropriate to use the cost approach for the anchor stores, and the income approach for the non-anchor stores which were leased.

Finally, the Appellate Division found the City’s moving for dismissal based on Beach Creek’s failure to overcome the presumption of validity raised a serious question about the City’s performance of its obligation under F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418, 426 (1985), to “turn square corners” in litigation.  The City, intending to rely on the $4.6 million appraisal at trial, was in possession of evidence that the 2007 and 2008 assessments were grossly erroneous. The Appellate Division found the City’s actions were inconsistent with its obligation to “comport itself with compunction and integrity.”  Thus, the Appellate Division rejected the court’s conclusion that Beach Creek failed to overcome the presumption of the validity afforded to the quantum of these $14.3 million assessments for 2007 and 2008.  The undisputed evidence in the City’s report established that the $14.3 million assessments for 2007 and 2008 were well off the $4.6 million report value, and that sufficient to overcome any presumption that the assessments’ quantum was valid.

As outlined in F.M.C. Stores, the square corners doctrine requires that no government action be taken in litigation with the aim of gaining an unfair advantage over a private citizen.  Thus, the government may not “conduct itself so as to achieve or preserve any kind of bargaining or litigational advantage” over a member of the public.  As the F.M.C. Court observed, this means that “government may have to forego the freedom of action that private citizens may employ in dealing with one another.”Litigation strategies and actions that may be expected in litigation between two private parties will be scrutinized when taken on behalf of a government agency in litigation with a provide citizen.

The property owner in Livingston Mall Corp. v. Livingston Twp., 15 N.J. Tax 505, 508-09 (Tax 1996) was represented by Thomas Olson, Esq. of McKirdy & Riskin, P.A.

A copy of the Tax Court’s opinion in Beach Creek Marina v. North Wildwood City may be found here.

For more blog posts on appraisal report issues, please see the following:

Experts’ Opinions Accepted Over Town’s Objections

Real Estate Tax Appeal Evidence: Admissible in Eminent Domain Case?

Expert’s “Gut Feeling” on Costs Survives Dismissal Claim

Court Disapproves Averaging of Comparable Sales

3 Comments

Filed under Court Decisions, Settlements and Awards

No Second Bite at the Apple for Taxpayer

Following a revaluation by defendant West Caldwell, a pro se plaintiff successfully challenged the assessment of his property before the Essex County Board of Taxation.  Unsatisfied with his success, he then appealed for a further reduction to the Tax Court.  At trial, both parties provided comparable sales information which was rejected by the Tax Court.  A judgment was entered October 12, 2012, affirming the County Board’s judgment.  On November 2, 2012, plaintiff sent the Tax Court judge an email seeking reconsideration of the court’s judgment, but failed to copy defendant’s attorney on the email.  Plaintiff requested a status update on November 20th, and the judge’s law clerk replied on November 26th by email that the request did not comply with R. 1:6-2(a), and that plaintiff failed to serve notice on defendant.  Plaintiff immediately served defendant, who submitted opposition, and the matter was scheduled to be considered on December 21, 2012.

The judge found plaintiff’s email requesting reconsideration was timely filed, but failed to satisfy the standard in R. 4:49-2 necessary to grant a motion for reconsideration.  The rule requires a party “state with specificity the basis on which it is made, including a statement of the matters or controlling decisions which counsel believes the court has overlooked or as to which it has erred.”  The judge determined plaintiff’s motion arguments merely repeated the arguments made at trial and considered by the court without providing any controlling decisions which the court overlooked, or showed how the court erred in its analysis.  Therefore, the court refused to vacate the judgment, and denied the plaintiff’s motion.

Motions for reconsideration are granted under very narrow circumstances, and typically denied because a party merely rehashes its original arguments while adding that the court was wrong in its holding.  As noted in the oft cited case D’Atria v. D’Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990), motions “must come to an end at some point, and if repetitive bites at the apple are allowed, the core will swiftly sour.”

A copy of the Tax Court’s opinion in Matthew Tuck v. Tp. of West Caldwell may be found here.

For more blog posts on different type of motions considered by courts in valuation litigation cases, please see the following:

Tax Court: No Harm, No Foul

Two More Taxpayers Victims of Chapter 91 “Litigation Gamesmanship”

No Relaxation For Lakewood Taxpayer

NJDOT Complaints Dismissed for Failure to Engage in Bona Fide Negotiations with Property Owners

Leave a comment

Filed under Court Decisions

“Day of Reckoning” for Monroe Township following Years of Successful Tax Appeals

The Township of Monroe says it has lost millions of dollars, and exhausted cash reserves, due to successful tax appeals by property owners.  The Township’s total assessed value has fallen over $140 million dollars in the last two years, in large part because of bulk appeals by the ten retirement communities in the Township.  The Township expects an average increase of $393 for a home assessed at $165,900, although that figure will be higher once school and county taxes are added to the bill.

Monroe Township will be undergoing a revaluation, the first since 1993, to reset the property assessments to current market values.  The revaluation was ordered by the Tax Court in 2010 after more than 1,000 residents filed a complaint alleging that the Chapter 123 ratio for the Township is skewed and discriminatory based on the Township’s failure to properly categorize sales between 2001 and 2005.

New Jersey residents have a constitutional right to be uniformly assessed with similar properties in their taxing districts.  Specifically, the Uniformity Clause of the New Jersey Constitution provides that property “shall be assessed according to the same standard of value, except as otherwise permitted herein, and such real property shall be taxed at the general tax rate of the taxing district in which the property is situated.”  Municipal budget woes are arguably created by towns who are unwilling to revise assessments to reflect current market values, and not by the property owners who successfully appeal their property assessment to only pay the taxes due on a correctly valued property.

For more on this story in the Star Ledger, please click here.

For more blog posts on municipalities addressing revaluations and budget woes, please see the following blog posts:

Atlantic City Borrowing to Pay Property Tax Refunds

Tax appeal refunds continue to take bite out of municipal budgets

Lyndhurst Borrows Nearly $4 Million to Refund Successful Tax Appeals

Property Tax Appeals in New Jersey – Increased Volume Meets Resistance

Mercer County Board of Taxation Orders Four Municipalities to Undertake Revaluations

Towns Nationwide Swamped with Property Tax Appeals

Municipalities Reassessing Properties Despite Recent Revaluations

Leave a comment

Filed under In the News, Settlements and Awards

Montclair Tax Assessment: Might be Wrong, But Not In Error

Property Owner Incorrectly Argues for Refund Under Correction of Errors Statute Following Revaluation

 A taxpayer alleged that he had been overcharged for property taxes following a 2007 revaluation. The taxes increased on one unit he owned in a two-unit condominium in Montclair following the revaluation, and he alleged his land value was too high because the assessor mistakenly failed to divide the land portion of the assessment between the two owners, and used an incorrect acreage factor.  Montclair countered that the tax assessor used his judgment and discretion to determine the proper land value.

 The taxpayer’s complaint was dismissed after the parties moved for summary judgment.  The taxpayer argued that the assessor made a clerical error in calculating the wrong land value, so a refund was due under the correction of errors statute, N.J.S.A. 54:4-54.  Montclair disagreed.  The Appellate Division agreed with Montclair and the Tax Court judge by finding that refunds were only proper when there are duplicate assessments on one parcel, an assessment intended for one parcel is mistakenly placed upon another, or one person mistakenly pays the tax on another property instead of his own.  The Appellate Division found the claim to be a challenge to the assessment and not a clerical error, so the correction of errors statute did not apply.

 For more articles discussing revaluations, please see the following:

 N.J. towns reassess property values after housing market drop – Star-Ledger

 Mercer orders property revaluation in four towns – Trenton Times

 Paying the Piper in Maplewood – Wall Street Journal

 For previous blog posts on property taxes, please see the following:

 Will Income Tax Be Used to Offset Property Taxes?

 Senate Passes Tax Appeal Reform for Monmouth County

 Property Owner Keeps Tax Abatement After Municipality Failed to “Turn Square Corners”

 The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.

5 Comments

Filed under Court Decisions

April 1st Tax Appeal Deadline Approaching

Property owners looking for ways to reduce expenses may consider filing an appeal of the property’s 2011 local property tax assessment.  The New Jersey Tax Court and County Boards of Taxation are flooded with appeals filed by owners who are asserting that their property values have declined and that a reduction of a property’s assessment and taxes is warranted as a result.

 

McKirdy& Riskin’s attorneys have successfully prosecuted taxpayers’ appeals throughout New Jersey before the Tax Court and various County Boards of Taxation in tax appeals involving properties of all kinds.   In order to contest a 2011 assessment, appeals must be filed by April 1, 2011, unless a municipality is undergoing a municipal-wide reassessment or revaluation or later filing deadline is ordered.  If an appeal is not filed on time, the opportunity for lower taxes in 2011 may be lost. 

For a complimentary evaluation to determine the viability of pursuing a tax appeal on your behalf, or for additional information concerning property tax appeals, please contact McKirdy & Riskin partner Thomas Olson, Esq. at 973-539-8900, or via email at tolson@mckirdyriskin.com.

4 Comments

Filed under In the News

April 1, 2011 Tax Appeal Deadline Looms

REDUCING REAL PROPERTY TAX EXPENSES IN THE CURRENT REAL ESTATE MARKET

 As certain sectors of the real estate market in New Jersey continue to be in flux, owners, operators and property managers of commercial, industrial and other investment properties may look to reduce real estate tax expenses by considering an appeal of  their 2011 local property tax assessments.  On or about February 1, 2011, the local tax assessor in every municipality across New Jersey must notify each taxpayer by mail – usually a white and blue post card – of the 2011 assessment on each parcel of real estate in the municipality.

 For 2011, local property tax assessments are required to represent the assessor’s estimate of the market value of the property (the so-called “true” value) as of October 1, 2010. Taxpayers are cautioned to note that the assessed value may either reflect (a) the fair market value of the property, or (b) a percentage of the fair market value which can then be applied to a ratio of the assessed value to the market value of properties in the municipality in order to calculate the true value. This average ratio is determined by the State Director of Division of Taxation.

An appeal from the 2011 assessment must be filed on or before April 1, 2011, unless the assessment is the result of a municipal revaluation or reassessment, in which case a later deadline may apply.  Appeals are filed with the local County Board of Taxation, except where the assessment exceeds $1,000,000, where an appeal can be filed directly with the New Jersey Tax Court.

Attorneys at McKirdy and Riskin, P.A., have appeared as counsel of record for both property owners and municipal taxing authorities in numerous precedent-setting cases, involving complex real estate value litigation concerning commercial, industrial, special purpose and residential properties.

Since its founding in 1967, McKirdy and Riskin has concentrated its practice in property tax appeals, condemnation, and eminent domain matters.

For a complimentary evaluation to determine the viability of pursuing a tax appeal on your behalf, or for more information concerning property tax appeals, please contact partner Thomas Olson, Esq., or one of our other tax appeal attorneys at 973-539-8900, or via email at tolson@mckirdyriskin.com.

Please also feel free to visit our firm’s website for further information.

 

4 Comments

Filed under In the News