Retail Landlord Prevails on Right to Control Tax Appeal
A recent decision by the New Jersey Tax Court has examined the limits of a commercial tenant’s right to control a property tax appeal on property which it leases. Target Corp., one of six tenants at a retail strip mall, filed complaints challenging the assessments on the property for tax years 2009 and 2010. The owner of the property, SDD Inc., also filed complaints challenging the assessments for those tax years. Target is responsible for the payment of a portion of the taxes based on the percentage of the mall that it occupies. Target moved to consolidate the appeals, and SDD opposed the motion and cross-moved to intervene in the Target appeals for the purpose of seeking dismissal. Lowe’s Home Centers Inc., another tenant, moved to intervene. While the motions were pending, SDD submitted to the court a fully executed stipulation of settlement between SDD and Toms River Township, reducing the assessment on the property for both tax years.
Relying on the factors outlined in Village Supermarkets, Inc. v. Twp. of West Orange, 106 N.J. 628, 630-32 (1987), the Tax Court judge agreed with SDD that, as owner of the property, it had the right to control the challenge to the assessments. The court found Target’s lease did not give it the exclusive right to appeal. Moreover, Target only occupied 38% of the property, whereas the landlord had an interest in 100% of the property. Additionally, SDD was able to reach a settlement with the town for the pending years which highlighted its ability to adequately represent all of the parties’ interests. Thus, the court granted SDD’s motion to intervene in the Target appeals and dismissed Target’s motion and appeal. Lowe’s motion to intervene was also denied.
For an opinion where the tenant successfully won the right to appeal, please see Aperion Enterps., Inc. v. Bor. of Fair Lawn, 25 N.J. Tax 70 (2009).
For more blog posts on the impact of landlord-tenant relationships in tax appeals, please see the following:
Tenant Entitled to Tax Refund, But No More
Court Confirms Tenant’s Right To Control Tax Appeal and to Refund
No Landlord-Tenant Relationship Means No Dismissal Under Chapter 91
The author wishes to thank Cory K. Kestner, Esq. of McKirdy & Riskin, PA, for his assistance in the preparation of this blog post.
