Real Estate Valuation Protests - How to Help the County “Get it Right”
Beginning this year, Douglas County property owners have the opportunity for an in-person meeting to make their case for a lower valuation, thanks to legislation passed in 2011. When the law was changed there was also growing concern because statistics suggested that too many Douglas County protests were not getting resolved at the county level, and were instead making their way to the Tax Equalization and Review Commission (“TERC”) which is the next (and more formal) level of appeal in Nebraska.
With the option for a personal meeting with county officials, county officials can give more focused and individual attention to the owner’s reasons for wanting a lower valuation. In this process, there is greater likelihood that the county will “get it right” early in the process.
State law requires that county level protests be filed in the month of June and that results be reported in August. If the valuation is not right following the county level protest, the next step for the taxpayer is the TERC. The TERC, however, is famously backlogged with appeals. For example, as of this publication, the TERC still has cases from 2011 that have not yet been scheduled for hearing. This means the owners involved in those cases have been waiting for three years to get the valuation right. And while they are waiting, they are required to pay the tax based on the higher valuations they are protesting. Granted, if the owner is successful at the TERC (or if the county ultimately settles and a lower valuation is agreed upon) the owner will be refunded or credited the excess tax they paid while waiting for their case to be resolved, but the point is, a failure to get it right at the county level ties up your time – and your money.
There can be a number of reasons why the county has the valuation wrong. Some of the reasons may be:
• An office building may be overvalued because it has less net leasable space than the county’s records show;
• A residential property may be overvalued because it sat on the market for an excessive amount of time even though it was listed at or below the county’s valuation;
• An apartment complex or hotel may be overvalued because the county’s assumptions about income, expenses, vacancy rates, or capitalization rates are not updated or accurate; or
• An owner may be paying more than his or her fair share of property tax because comparable properties are assessed lower than the owner’s property, and the valuations are not, therefore, equalized.
The above are just a few examples of why a valuation may be wrong. Your situation may be simpler, or more complex. We encourage property owners to exercise their right to meet face to face with the county, and come to their protest meetings well prepared. Recent appraisals, financial statements, rent rolls, purchase and listing agreements, photographs, comparable property information, etc., are all important and helpful types of documents to use as you make your case.
IMPORTANT DATES TO REMEMBER
June 1, 2014 – Counties are required to notify owners if their valuations have changed from the prior year.
June 1 – June 30, 2014 - Board of Equalization protests can be filed. This deadline is extremely important. Late filings are not allowed, and a protest that is untimely at the county level cannot be heard by the TERC or any court.
June 1 – July 25, 2014 – Protests may be heard by the Board of Equalization or by Board appointed referees. Douglas, Sarpy, and Lancaster counties have the option to extend the end date for protests to August 10, 2014 if they take formal action to do so.
August 2, 2014 – The county Boards of Equalization are required to notify owners of the results of their protests. Douglas, Sarpy, and Lancaster Counties have the option to extend this deadline to August 18, 2014 if they take formal action to do so.
August 24, 2014 – Deadline to file appeal to TERC. Douglas, Sarpy, and Lancaster Counties have the option to extend this deadline to September 10, 2014 if they take formal action to do so.
Lawyers can help property owners save hundreds of thousands of dollars on their property taxes by assisting with county level protests and appeals to the TERC. Assistance can be anywhere from merely helping behind the scenes, to working with an in-house legal team, or to fully orchestrating the process. Whatever your need is, counsel can help you quickly identify and focus on the reasons why the county’s valuation may be wrong, set a reasonable budget for the work involved, and get to work on making sure the county gets it right.
by James F. Cann