Rent Receiver Has Standing to Prosecute Tax Appeal

The New Jersey Tax Court this week held that a court-appointed rent receiver has a sufficient interest in a commercial property to prosecute a property tax appeal.  The property, a 90,000 square foot commercial building located in Evesham Township, Burlington County, was assessed at approximately $12,000,000 for 2014.  The owners had failed to make mortgage payments, triggering a loan default and prompting a foreclosure action on the property.  During the foreclosure action, the Court appointed the rent receiver to “take charge of” the property, and the Order appointing the receiver vested broad powers in the receiver with respect to operating the property and responsibility for its income and expenses.

Shortly after the receiver filed a Complaint in the Tax Court challenging the 2014 assessment, the township moved to dismiss the Complaint for lack of standing.  The township argued that the receiver was not a “taxpayer” aggrieved by the assessment within the meaning of N.J.S.A. 54:3-21, and therefore was not entitled to prosecute the appeal.

The Tax Court disagreed with the township’s argument.  It noted that “taxpayers” within the meaning of the statute are not limited to owners of the property in question.  In fact, tenants, mortgagee, the holders of tax sale certificates, and a non-owner spouse have all been held to have standing to file property tax appeals pursuant to N.J.S.A. 54:3-21.  With this in mind, the Court compared the receiver in the case at hand to the mortgagee, and reasoned that while the receiver does not own a property interest in the property under appeal, it does have a fiduciary obligation to protect the property and the Order appointing the receiver was broad enough to conclude that the receiver had a sufficient stake in the property’s assessment to challenge it in the pending appeal.  Accordingly, the township’s motion to dismiss was denied and the appeal was allowed to continue.

A copy of the Tax Court’s opinion in NNN Lake Center, LLC v. Tp. of Evesham is available here.