Tag Archives: Tax assessment

Tax Court Prefers Quantitative, Not Qualitative Adjustments

Another County Tax Board judgment was affirmed after the property owner and the municipality both failed to overcome the presumption of correctness of the assessment with evidence that was “definite, positive and certain in quality and quantity. . . .” MSGW Real Estate Fund, LLC v. Borough of Mountain Lakes, 18 N.J. Tax 364, 373 (Tax Ct. 1998). The Middlesex County Board of Taxation reduced the assessment on two multi-family homes following evidence presented by the parties. Appeals were filed to the Tax Court, and both parties presented expert witnesses.

At trial, plaintiff’s expert presented three comparable sales that were in the same neighborhood as the subject properties. The expert testified that did not provide adjustments in dollar amounts to any comparables for various elements of comparison on grounds that this was not required when using qualitative adjustments, an accepted appraisal methodology, so that the Subject/comparables will mirror the market. The Township’s assessor utilized the comparable sales approach, also without making any adjustments to the comparables on the grounds that none were required. The Tax Court rejected the methodology applied here, and stated that “what is amorphous to the court is how the expert concluded that $250,000 is that amount. Was it based on his experience and expertise? But courts require an expert’s opinion be based on more than this.” Because the experts failed to provide the “whys and wherefores” of their opinions, the Tax Court affirmed the assessment since there was no credible objective evidence in the record.

A copy of the Tax Court’s unpublished opinion in Ganjoin (34 Highland Avenue) v.Township of Woodbridge can be found here.

A copy of the Tax Court’s unpublished opinion in Ganjoin (308 Avenel Street) v.Township of Woodbridge can be found here.

For more on overcoming the presumption of correctness, please see the following blog posts:

Unreliable Testimony Dooms Taxpayer’s Appeal

Taxpayer Fails to Overcome “Presumption of Correctness”

Appraiser’s Subjective Adjustments Rejected; Owner Loses Appeal

Limited sales data and lack of reasonable adjustments does not doom plaintiff’s appeal

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A Tale of Two Cities . . . Wanting to Tax the Same Property

In a recent appeal, the property owner – a condominium association – filed a tax appeal for its property which straddles the municipal boundaries of South Orange and Maplewood. The condominiums are located on the Maplewood side of the boundary line, and a 1.46 acre parcel containing a driveway, shrubbery, and plantings are located on the South Orange side. The property owner’s complaints alleged that the South Orange portion was not separately taxable from the condominium units because it is excluded from taxation as a common element of the complex, and the assessed value is shared among the individual units. Plaintiff renewed a previously denied motion for summary judgment to settle the legal issue of whether the disputed property qualified as excludable common elements, which South Orange opposed alleging there is no authority for the Township of Maplewood to assess the value of the property located within South Orange.

Common elements are excluded from separate taxation under N.J.S.A. 46:8B-19, which is a section of the New Jersey Condominium Act. Neither party disputed the classification as common elements. However, South Orange argued that it is constitutionally and statutorily obligated to assess the properties within its boundaries. The Tax Court held that, although South Orange is permitted to assess the property, the property is excluded statutorily as a separate taxable item as the common elements of the condominium association. Although potentially an impractical outcome for the parties, the judge did note that her decision did not prohibit the parties from discussing alternative resolutions available by statutes like N.J.S.A. 54:4-25, which permits municipalities to assign who may collect the taxes on a property that straddles multiple municipalities.

A copy of the Tax Court’s unpublished opinion in The Top Condominium v. South Orange can be found here.

For more on how condominium appeals have been handled previously by the Tax Court, please see the following blog posts:

To Conquer, Taxpayer Must Divide

Failure to Fix Report Dooms Expert’s Testimony

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

Taxpayer’s Challenge to Re-Assessment Out of Time

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Comparable Sales From Neighboring Town Not Persuasive Evidence

A Tax Court judge affirmed a property owner’s assessment because the owner only provided comparable sales information from a neighboring municipality without demonstrating how the real estate markets in the two municipalities were either alike or different.  Specifically, the property owner presented four comparable sales from neighboring Ocean Township, which was “six steps” away from the Subject Property.  In fact, the homes across the street from the Subject were in Ocean Township.  Additionally, the property owner testified that he would not market his home as being in Ocean Township because his town had a better reputation.  When questioned why comparable sales were not used from Interlaken, the property owner testified that they were “not within [his] range” because they sold for an amount higher than he was seeking to prove.  The municipality moved to dismiss the case at the conclusion of the property owner’s proofs claiming that the evidence submitted did not overcome the presumption of correctness of the County Board judgment affirming the assessment.

The Tax Court judge held that the comparable sales from the neighboring municipality were not persuasive evidence of the subject property’s fair market value because there was no evidence that the real estate market for single family homes in the borough is the same or very similar to the market in Ocean, and further that the comparable sales were dissimilar from the subject property in age, lot size and quality of location.  The judge also rejected the property owner’s method of averaging the sales prices of the comparables to determine a fair market value and assessment for the Subject Property, so the assessment was affirmed.

An assessment can only be reduced after a property owner rebuts the presumption of correctness granted to the assessment.  To be successful, the 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 is then afforded the 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 Gentile v. Borough of Interlaken can be found here.

For more on how the presumption of correctness has been addressed by New Jersey’s courts, please see the following blog posts:

Taxpayer Fails to Overcome Presumption of Correctness
Appraiser’s Subjective Adjustments Rejected; Owner Loses Appeal
Taxpayer Clears One Hurdle But Trips on Another
Apartment Complex Wins Assessment Reductions at Trial

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Tax Court: No Show, No Go!

In Harshad Patel v. Township of Maple Shade, the New Jersey Tax Court granted Maple Shade’s motion to dismiss plaintiff’s 2012 tax appeal complaint for lack of prosecution because plaintiff failed to appear at the scheduled hearing before the Burlington County Board of Taxation.  The facts were not disputed by the parties.  Plaintiff’s attorney faxed a letter to the County Board, with a copy to Maple Shade’s assessor, requesting that the assessment be affirmed without prejudice because a 2011 appeal was pending before the Tax Court. Plaintiff’s attorney did not fax a copy to Maple Shade’s attorney.  One day before the hearing, Maple Shade’s attorney left a message with a staff member at plaintiff’s attorney’s office that Maple Shade did not consent to an affirmance without prejudice, and no written letter followed the phone call.

The judge noted that, although it is the common practice to affirm matters that have multiple years pending so the matters may be resolved by one tribunal, a party is not entitled to an affirmance by right.  The court reasoned that municipalities have an interest in attempting to resolve matters at the county board level to potentially avoid further litigation expenses at the Tax Court level.  The Tax Court found plaintiff deliberately failed to appear at the hearing even though he had not received word from the board that it agreed to affirm the assessment without prejudice, and the failure to appear supporting dismissing the 2012 appeal for lack of prosecution.

A copy of the Tax Court’s unpublished opinion in Harshad Patel v. Township of Maple Shade, (December 4, 2013), can be found here.

For more on lack of prosecution and county board issues in tax appeal cases, please see the following blog posts:

Another Bite at the Apple For Taxpayer?

Raw Deal by County Tax Board Overturned by Tax Court

Property Owner’s Appeal Dismissed for Failure to Follow Court Rules

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All or Nothing: Appeals Dismissed for Failure to Challenge Overall Assessment by Tenant

Plaintiff/Tenant Brunswick Hills Racquet Club timely filed tax appeals for tax years 2011, 2012, and 2013.  East Brunswick Township moved to dismiss all years under appeal after plaintiff conceded that it was not contesting the total assessed value of the shopping mall where it was located, but was instead only challenging the values allocated to its specific building as part of the overall assessed value.  The Tax Court granted defendant’s motion to dismiss plaintiff’s complaints for the pending tax years because plaintiff was not an aggrieved taxpayer for purposes of N.J.S.A. 54:3-21, and that plaintiff’s complaints should be dismissed as failing to state a claim for which relief could be granted.  Apparently, the Tax Court concluded that the appeal was an “all or nothing” venture.

For the Tax Court to have jurisdiction over a tax appeal under N.J.S.A. 54:3-21, a complaint must be filed by a “taxpayer feeling aggrieved by the assessed valuation”.  Under New Jersey law, a tenant is permitted to file a tax appeal on property occupied by the tenant to challenge the overall assessed value of the property.

A copy of the Tax Court’s unpublished opinion in Brunswick Hills Racquet Club v. East Brunswick Twp., (October 2, 2013), can be found here.

For more on landlord-tenant issues in tax appeal cases, please see the following blog posts:

Wegman’s Ducks Landlord’s Attorneys’ Fee Claim Following Successful Tax Appeal

Court Confirms Tenant’s Right To Control Tax Appeal and to Refund

Retail Landlord Prevails on Right to Control Tax Appeal

Tenant Entitled to Tax Refund, But No More

No Landlord-Tenant Relationship Means No Dismissal Under Chapter 91

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Hilton Hotel Assessment Reduced Following Trial

In this commercial tax appeal involving a Hilton hotel, the taxpayer challenged the assessments on its property for the 2010 and 2011 tax years.  The subject property operates as a 355 guest room Hilton Hotel and executive conference center.  The standard method for valuing a hotel’s real property component is the income approach, which takes a property’s net income (gross income minus gross expenses) and capitalizes it into an estimate of value.  However, this basic approach has been found deficient to capture a hotel’s true value.

Valuation experts, like those employed by the parties in this matter, frequently rely on the “Rushmore Method” of valuation to determine the market value of a hotel based on its component pieces.  The four separate components comprising a hotel are the land, improvements, personal property, and the going business concern.  The Rushmore Approach separates the business component by deducting management and franchise fees from the hotel’s stabilized net income.

The court found that plaintiff produced sufficient valuation evidence to overcome the presumption of validity attached to the assessments.  Examining the information provided by each expert, the court chose the most reliable calculations from each report to establish a new market value which reduced the assessment for each year under appeal.

A copy of the Tax Court’s opinion in BRE Prime Properties LLC v. Hasbrouck Heights may be found here.

For more blog posts on tax appeal litigation involving hotels and casinos, please see the following:

Morristown Hotel Wins Freeze Act Application and Refund

NJ Supreme Court: Failure to Name Correct Plaintiff Not Fatal to Tax Appeal

$54M Property Tax Credit Coming to Trump In Atlantic City

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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

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