14C — November 23 - December 6, 2012 — The Road to Recovery — Mid Atlantic Real Estate Journal
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T he R oad to R ecovery By Jeffrey Hall, Fox Rothschild LLP Superstorm Sandy and your tax assessments
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n March of 1962, a vicious coastal storm devastated the New Jersey coast and
paying full taxes on property that had been substantially altered or destroyed by the Nor’easter. Because of the pervasive ef- fects of that storm, the New Jersey Legislature responded and amended N.J.S.A. 54:4-35.1 to permit claims for assessment relief for destruction to property occurring before April 1, 1962. That statute provides in perti- nent part; “…When any building or other structure which has been destroyed, consumed by fire, demolished or altered in such a way that its value has ma-
terially depreciated, either intentionally or by the action of storm, fire, cyclone, tornado, or earthquake, or other casu- alty, …the assessor shall…after examination and inquiry, deter- mine the value of such parcel real property as of…January 1, and assess the same according to such value.” Today, the special relief af- forded by this statute applies only to events occurring be- tween October 1st of the pre-tax year and January 1st of the tax year provided the property owner notifies the assessor of the loss by January 9 of the tax
year. N.J.S.A. 54:4-35.1. Given the pervasiveness of property damage caused by Superstorm Sandy, the logical question is: “Can the procedure outlined by this statute work?” In other words, can this law, which never contemplated a natural disaster the magnitude of Superstorm Sandy, function to provide relief to those most in need? Before delving in the statu- tory framework, this author stresses that the owner of an affected property should send a letter, e-mail or fax to the assessor prior to January 10, 2013. That notice should (1)
identify the property by street address and tax block and lot (which is on the tax bill), (2) give a brief description of the damage, and (3) specify it was caused by Superstorm Sandy. Fox Rothschild’s website has a resource, the “Fox Rothschild Disaster Recovery Consultation Unit.” A form letter has been posted on that website. See www.foxrothschild.com/hur- ricanesandyrecovery. Generally, statutes dealing with property taxes are inter- preted narrowly against the property owner. Thus, statutes granting exceptions from New Jersey’s assessment framework will be construed in favor of the taxing district. In New Jersey, a municipal assessor is required to value property as of October 1 st each year and certify a list of assessed values by January 10 th of the year of assessment. In the intervening period, the assessor will make adjustments, if war- ranted and time willing, by the January 10 th deadline. N.J.S.A 54:4-35. In a typical year, this can be a daunting task as most municipalities have thousands of assessments which strain an assessor’s abilities to view each property and make adjustments while also attending to his or her other duties that the law requires. N.J.S.A. 54:4-35.1 has been construed narrowly since its adoption. In one case, a fire started on December 31 st and the taxpayer claimed that the building was substantially destroyed before midnight. However, the proofs were not conclusive on that point and the Court ruled that the tax- payer failed to prove that the destruction took place before January 1 st , ruling against the taxpayer. Rutherford Con- struction Co. v. Borough of Rutherford , 6 N.J. Tax 605 (1984). In another case, a taxpayer’s property was totally destroyed but the taxpayer had not notified the assessor and had not filed assessment appeals. Instead, the taxpayer relied on the so-called Correc- tion of Errors statute, N.J.S.A. 54:51A-7, arguing that the list- ing of the building’s assessed value was a clerical error. The Court ruled otherwise noting the narrow scope of that stat- ute. East Washington Realty v. Washington Borough , 14 N.J. Tax 560 (1995). In Galloway Township v. Dorflinger , 2 N.J. Tax 358 (1981), the property continued on page 20C
d e s t r o y e d much of the coastline and homes, busi- nesses and other struc- tures. At the time, the New Jersey tax as- sessment sys- tem had no
Jeffrey Hall
answer for the tax inequities created by this storm. Thus, owners of ravaged property had no way to obtain the relief from
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