One Step Forward, Two Steps Back for West Orange Taxpayer

Last week, the Tax Court of New Jersey dismissed a multi-year tax appeal filed by a commercial property owner in the Township of West Orange that challenged the assessment on a retail property in that municipality, which assessment had been set by a town-wide revaluation in 2011.  The plaintiff WKJ Realty Co., Inc. relied upon its expert appraiser who used an income method of valuation to arrive at a market value conclusion of approximately $290,000, as compared with the assessment of $452,600. The defendant township relied on the presumptive validity of the assessments and did not present any testimony in defense of the assessments.

The Tax Court concluded that the taxpayer produced sufficient evidence to overcome the “presumption of validity” attached to assessments on the subject property and the county tax board judgments affirming the assessments.  However, while the court considered the taxpayer’s evidence, it court was not persuaded that opinion of the plaintiff’s expert should be given much weight because the expert had limited knowledge of the subject property, was unfamiliar with the relevant properties and comparable leases, and relied upon a questionable capitalization rate. As a result, the court concluded that the taxpayer failed to prove by a preponderance of the evidence that the assessments in question were incorrect, and therefore dismissed the complaint and affirmed the assessments.

A copy of the Tax Court’s opinion in WKJ Realty, Inc. v. Township of West Orange, is available here.