Property owner survives Verona’s “Chapter 91” attack

N.J.S.A. 54:4-34, also known as Chapter 91, is often used by municipalities to attack property owners’ tax appeals on procedural grounds, rather than on the merits of whether the property is over-assessed.  This statute, which allows a municipality to request income and expense information and requires a property owner to respond within 45 days, is often an effective weapon in the municipal arsenal to counter tax appeals.  However, in an unreported decision, the New Jersey Tax Court recently denied a motion to dismiss by the Township of Verona based on the plaintiff’s alleged failure to respond to a properly served Chapter 91 request.

In Cam Gar v. Verona Township, the plaintiff filed a complaint challenging the assessment on real property for the tax year 2011.  In opposing the Township’s motion to dismiss, plaintiff argued that it had mailed the assessor a timely response.  The Township claimed it never received a response.  The court scheduled a plenary hearing during which the plaintiff provided testimony of a bookkeeper for its parent company who testified how she has handled Chapter 91 requests, not only for the year in question, but for prior years as well.  The court found this testimony credible and was satisfied that in 2010, as in prior years, the bookkeeper followed the established and routine practice and procedure for responding to Chapter 91 requests.

The Township argued that ruling in favor of the plaintiff would be tantamount to allowing “the check is in the mail” argument to be a satisfactory reply whenever the tax assessor does not receive a Chapter 91 response.  In response, the court noted that this very concern was addressed in J & J Realty v. Township of Wayne, 22 N.J. Tax 157, 162 (Tax 2005).  While a plaintiff can falsely claim to have sent the response or a tax assessor can falsely claim that he never received the response; relying on the prior holding in the reported J & J Realty case, the court found that it “is well situated to determine credibility and truthfulness and can do so in the context of Chapter 91 motions as effectively as they do in other contexts.”

Score one for the property owner here.