The Dos & Don’ts of Chapter 91 Requests
Every year motion practice heats up in the Tax Court with municipalities armed with “Chapter 91” motions. As previously mentioned many times on this blog, N.J.S.A. 54:4-34, also known as “Chapter 91,” requires income-producing property owners to respond to the assessor’s request for income and expense information. Under the statute, failure to provide the information to the assessor within 45-days of the request will bar any appeal in the subsequent year. Given that Ch. 91 motions need to be filed within 180 days after the filing of the complaint or 30-days before the trial date (whichever comes first), municipalities churn out many Ch. 91 motions to dismiss taxpayer complaints shortly after the filing deadline.
In First Growth Plaza, LLC v. Borough of Raritan, the Borough filed a motion to dismiss the taxpayer’s complaint for failure to respond to the assessor’s Chapter 91 request. The taxpayer’s sole argument to defeat the motion was that the Ch. 91 request sent by the assessor via certified mail was “unclaimed,” and thus the assessor failed to fulfill his/her statutory obligations under N.J.S.A. 54:4-34. The assessor sent the Ch. 91 request to the taxpayer by regular mail and certified mail. The regular mail was returned to the assessor marked as “RETURN TO SENDER INSUFFICIENT ADDRESS UNABLE TO FORWARD.” Meanwhile, the certified request was returned to the assessor marked “UNCLAIMED” with proof of three (3) failed attempts at delivery.
Unfortunately for the taxpayer, the Tax Court judge was not persuaded by its argument. Although the Ch. 91 request sent by regular mail was returned to the assessor for “insufficient address,” the burden does not fall on the assessor to “track down” the taxpayer’s new mailing address. The court stated that placing such obligations on tax assessors would be “impractical and burdensome.” Moreover, the certified mail was returned as “unclaimed” after multiple attempts of delivery evidencing that the taxpayer failed to retrieve the mail after notification by the postal service. In addition, what was more detrimental to the taxpayer was the fact that in a prior appeal the assessor’s certified Ch. 91 request was sent to the exact same address and was signed by an agent for the taxpayer. The court granted the Borough’s Ch. 91 motion and indicated that it was clear that the address “was at one point a correct mailing address for plaintiff.”
Meanwhile, the taxpayer in 2 JFK Blvd., LLC & D. Rubin v. Twp. of Franklin successfully defended a Ch. 91 motion filed by the Township. The facts were undisputed and straightforward. On March 27, 2015, plaintiff filed an appeal with the Tax Court challenging the assessment on the subject property for tax year 2015. Thereafter, the Township filed a motion to dismiss the complaint pursuant to N.J.S.A. 54:4-34. According to the Township’s assessor, a request for income and expense information relating to the subject property was sent via regular and certified mail but plaintiff failed to respond to either request.
Plaintiff opposed the motion on grounds that a timely response was provided to the assessor’s first Ch. 91 request. In support of its position, a certification of the property manager was provided wherein he certified that responses to the assessor’s first income and expense request was sent via regular mail. Plaintiff further certified that the responses were addressed to the assessor at the address which appeared on the letterhead of the Ch. 91 request.
The court was thus confronted by two conflicting testimonies, the assessor claiming that the information sought was never received and the taxpayer claiming to the contrary. The court posited two possible scenarios for the discrepancy: 1) plaintiff’s response was never delivered to the assessor by the postal service at no fault of plaintiff; or 2) the information sent by plaintiff was “misplaced or misfiled in the ordinary course of processing by Township. Ultimately, the court denied the Township’s motion in light of the taxpayer’s certification and the severe penalty of losing the right to appeal the assessment if dismissed pursuant to Ch. 91. “Because of the severe sanction permitted by Chapter 91, this court has been reluctant to award relief in the absence of sufficient evidence of non-compliance by the taxpayer.” The court could not find sufficient evidence of non-compliance based on the credibility of plaintiff’s certification that he responded to the assessor’s Ch. 91 request.
These two recent decisions remind us again that it is always better to make an effort in responding to the assessor’s Ch. 91 request than to ignore it altogether. The courts understand the severe consequences of non-compliance with a Ch. 91 request and are willing to give the benefit of the doubt to the taxpayer when presented with credible evidence of the taxpayer’s compliance.
