2D — December 18 - January 14, 2020 — Year in Review 2020 — M id A tlantic Real Estate Journal
Y ear in R eview 2020
By Neil A. Stein, Kaplin Stewart How to lose a commercial property tax assessment case in ten easy steps
have represented hun- dreds of taxpayers over my thirty year career and
the nuances of the process, can kill a good case. Many assess- ment appeals are litigated in trial courts where the rules, written and unwritten, differ from administrative appeals and common trials. 2. The heyday of Valley Forge may be over. If you don’t know what I am talking about, then you are behind the curve. Using Valley Forge as your sole defense to a tax- ing authority appeal may be a losing argument. 3. Commercial properties valued by the income ap- proach may require multiple strategies. The is more than
one method of calculating a cap rate or a tax load factor. Remember, an appraisal is more of an art than a science. There are no “slam dunks,” so have more than one strategy mapped out. 4. If you appeal an assess- ment without strong factual or legal support, you take the risk that a board of assessment may elect to deny your re- quested reduction and instead increase the assessment. Yes, I have seen it happen. 5. One size does not fit all. A residential property of 50 acres with a mansion is not the same as a home on a half-acre.
A mixed-use office and retail building, land subdivided into lots and thereafter improved, shopping centers with big-box users and stand-along net lease properties, all demand specialized arguments and strategies. 6. A lawyer who talks too much will detract from an appraiser’s presentation. A board of assessment hearing is often a quick affair, and there is little time for puffery. Get to the point. Not allowing a valuation expert sufficient time to make a presentation to a board can be deadly. 7. An appraiser who talks
too much is also a problem. Many appraisers are accus- tomed to the relative informal- ity of a board of assessment and have limited courtroom experience. Proper witness selection and trial preparation requires hard work. The same is true for attorneys as well. I’ve seen some very competent attorneys and appraisers per- form poorly in a courtroom due to inadequate preparation. 8. Understand the issue. Valuation may be only one ele- ment of an assessment appeal. Understanding uniformity and ratios are also important. If your team does not have a good grasp on predetermined ratios, implied values, and common level ratios, and the method of calculation and the importance of each, you have a problem. 9. Hubris, arrogance, and stubbornness will get you into trouble. A good settlement beats a bad verdict. Push- ing a bad case is a bad idea. Sometimes you need to hold your nose and accept a modest increase. 10. Do not buy commercial real estate without consider- ing the possibility of a taxing authority appeal and what it may mean for your operating expenses. Proper planning prior to a purchase may just save you from an after-the- purchase headache. I’ll say no more since this one is more complicated than it appears. Please heed my advice, and your chance of success will improve. Neil A. Stein is a princi- pal of Kaplin Stewart and a member of the Land Use, Zoning & Development De- partment. MAREJ
h a v e h a d to clean up some mess- es caused by prior coun- sel. I thought it might be u s e f u l t o unve i l my shortlist of
Neil A. Stein
ten recondite dangers in the assessment appeals process. 1. Assessment appeals re- quire specialized counsel and experts. An inexperienced professional, unschooled in
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a section of the Mid Atlantic Real Estate Journal 350 Lincoln Street, Suite 1105 Hingham, MA 02043 P: 781-740-2900 • fax 781-740-2929 www.mare J.com Publishers Linda Christman firstname.lastname@example.org Lea Christman email@example.com Editor Karen Vachon firstname.lastname@example.org The Year in Review 2020 Spotlight
Contact: NEIL A. STEIN • email@example.com 910 Harvest Drive, Blue Bell, PA 19422-0765 • 610-941-2469 • kaplaw.com Other Offices: • Cherry Hill, NJ 856-675-1550 • Philadelphia, PA 215-567-3120 Kaplin Stewart A t t o r ne y s a t Law
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