Assessment Presumed Valid – Another Taxpayer Bites the Dust
A recent New Jersey Tax Court case affirmed the long-standing principle that a taxpayer has the burden of proving that the property tax assessment is erroneous. A Monroe Township property owner appealed the judgment of the Middlesex County Board of Taxation to the Tax Court to challenge the affirmance of his 2009 assessment. Much of the subject property consists of wetlands. Plaintiff’s house is located in a flood hazard control (FHC) district, and much of the land surrounding the house is encumbered with wetlands. At trial, the main contention was the extent to which the property could be subdivided and developed. Both parties’ appraisal experts agreed that the existing house is a nonconforming pre-existing condition, and that the entire southern half of the property was in the FHC district and had no further development potential. Plaintiff’s appraiser argued that development of the property was not financially feasible because of the significant cost of clearing trees to create a building envelope, to gain access from the building envelope to Dey Grove Road, and it would be expensive to construct a septic system conforming to current building codes because of the existing soil conditions. Defendant Township of Monroe’s appraiser concluded that the highest and best use of the property was subdivision with development of an additional residential lot.
The Tax Court judge found that plaintiff’s appraiser failed to support his opinion that there was no possible development of the property that was financially feasible. No testimony was provided by the appraiser at trial, or in his report, regarding the costs of tree removal, providing access, or providing a conforming septic system. Additionally, no marketing study was provided to determine whether or not a market existed for a home that would support the costs to develop the property. Thus, the judge found his conclusion as to the highest and best use was a net opinion and his opinion of value was not persuasive. The judge further found that defendant’s appraiser’s conclusion that the highest and best use of the subject included development of a residential building lot suffered from many of the same deficiencies as plaintiff’s appraiser’s testimony. Because neither party provided any market data to support any of their adjustments, the court affirmed the assessment.
A copy of the Tax Court’s opinion in Odra Land Co., Inc., v. Monroe Twp. may be found here.
For more blog posts where the appraiser or expert played a major role in the outcome of the case, please see the following:
Expert’s Mistake Sinks Valuation Case
Failure to Fix Report Dooms Expert’s Testimony
