“Too Little, Too Late” – Appeal of $118,000,000 Assessment Dismissed as Untimely

Ouch.  This is a huge reminder that, in most NJ towns, property tax appeals must be filed this year on or before April 3, 2023.  And you better be on time!

Last month, the Tax Court of New Jersey dismissed a commercial taxpayer’s appeal of a new assessment resulting from a municipal revaluation as being untimely pursuant to N.J.S.A. 54:3-21(a)(1).  The revaluation resulted in increasing the property’s assessment from $12,554, 400 to $118,398,600, but that fact was not itself sufficient in the Court’s eyes for the taxpayer to overcome the burden upon it to prove that it failed to receive notice of the new assessment in time to satisfy the May 1st statutory filing deadline for tax appeals in municipalities that have undertaken town-wide revaluations.

In Tonnelle Center, LLC v. Tp. of North Bergen, the plaintiff owned commercial property located on Tonnelle Avenue in North Bergen Township and filed a direct appeal of its 2022 property tax assessment with the Tax Court pursuant to N.J.S.A. 54:3-21 on August 12, 2022, which was beyond the statutory deadline of May 2, 2022 (extended 1 day since May 1, 2022, was a weekend or holiday).  The Township quickly filed a motion to dismiss the appeal as untimely and, after briefing and written submissions, the Court permitted additional discovery and heard live testimony from several witnesses before making its ruling on February 10, 2023.

The Court’s fact findings included the following:

• North Bergen’s municipal revaluation for 2022 was conducted by Appraisal Systems, Inc., (“ASI”)which included property inspections of properties including the subject property, and several bulk mailings to taxpayers;
• Bulk mailings from ASI included letters to the plaintiff that were sent by regular mail to the same address listed for its tax bills, and none of them were returned as undelivered;
• The letters included notices sent as early as March 9, 2022, that informed the plaintiff that the subject property’s assessment would increase from $12,554,400 to $118,393,600;
• Information containing the new assessments was posted on a public website contracted by ASI;
• Postcards to all property owners, including the plaintiff, were mailed later in March, 2022, containing the new proposed assessments;
• Plaintiff was an experienced property management company that had a system of receiving correspondence managed by certain employees in the same location as the mailing address used by ASI;
• Plaintiff’s representatives testified that they never received the new assessment notices or mailings, but also testified that they had past issues with mail that had been lost;
• On August 9, 2022, the plaintiff was notified by its bank that its tax escrow account for the subject property was substantially underfunded due to an attempted debit for property tax payment.  Plaintiff’s representative immediately contacted its attorney, received a tax bill for the Q3 and Q4 taxes reflecting the new assessment, and thereafter caused its complaint to be filed with the Tax Court on August 12, 2022.

These facts were then considered by the Court in determining whether the untimely appeal, filed on August 12, 2022, could be permitted.  The Court’s analysis began with a reminder of the critical nature of the timeliness of a tax appeal, and of the legal premise that a failure to timely file a complaint represents a “fatal” jurisdictional defect that divests the court of jurisdiction.  See Regent Care Center v. Hackensack, 18 N.J. Tax 320, 324 (Tax Ct. 1999); Lawrenceville Garden Apts. v. Tp. of Lawrence, 14 N.J. Tax 285, 288 (App. Div. 1994).  Next, the Court reviewed precedent that holds that a taxpayer may overcome the presumption that a mailing constitutes proper notice if it can establish that notice was never received.  For instance, in Centorino v. Tewksbury Tp., 18 N.J. Tax 303 (Tax Ct. 1999), a late filing was permitted because the taxpayer established that notice was sent to the prior owner of the property.  But the Tonnelle Center court also noted other matters in which the evidence presented by the taxpayer was held insufficient to rebut the presumption that notice was validly provided.

Based upon its findings of fact, the Court concluded that, while it did not question that plaintiff’s representatives may have not been aware of the increased assessment until August 2022, and the ASI bulk mailings may have gotten “lost in the mail”, it was “problematic” that certain records were missing from the plaintiff’s files concerning the assessment and also that there had been mail problems in the past which were proactively addressed when plaintiff – a sophisticated real estate owner and manager – failed to receive rent checks, but took no similar actions with respect to notices concerning its tax assessments.  As a result, the Court found that the plaintiff did not overcome the inference of having received implied notice to rebut the presumption of mailing, and concluded that it could not “excuse” the plaintiff’s untimely filing.

The township’s motion to dismiss was granted but, given both the facts and the magnitude of the claim involved in this matter, it won’t surprise us to see this matter end up in the appellate courts. We’ll keep an eye on it and report back.

A copy of the Tax Court’s opinion in the Tonnelle Center v. North Bergen case is available here.