Apples and Oranges? Another Tax Appeal Dismissed

by: Anthony F. Della Pelle
22 Sep 2011

Failure to make adjustments between alleged comparable sales and subject property spells doom for property owner’s tax appeal

A New Jersey appellate court recently affirmed the opinion of the Tax Court upholding an assessment on plaintiff’s home.  The plaintiff in Roberts v. Newark relied on sales data that he compiled himself and did not offer an appraisal report.  In an unpublished opinion, the court held that in the absence of adjustments to account for the differences between the comparable sales and plaintiff’s property there was “no evidence upon which to determine the value of plaintiff’s home….”  The court found also that since some of the sales relied upon by plaintiff were too remote in time from the assessing date the sales could not be considered without appropriate adjustments to account for changes in the market from the date of those transactions and the assessing date.

Plaintiff’s failure to provide an appraisal report was not fatal to his cause, but the lack of appropriate adjustments.  Earlier this year, in a published opinion, The Tax Court dismissed a tax appeal where appraisers for both the taxpayer and the municipality failed to provide adequate support for their respective opinion of value.   In Greenblatt v. Englewood, 26 N.J. Tax 41 (May 6, 2011), the homeowner challenged the 2009 property tax assessment on his residence located in the City of Englewood.  Relying on the Tax Court’s opinion in Dworman v. Tinton Falls, 1 N.J. Tax 445 (Tax 1980), the Tax Court found that neither appraisal expert sufficiently explained the methodology and assumptions used in making adjustments to the comparable properties.  As the court noted, each expert “failed in the ‘whys and wherefores’ in support of his value.”  The court held that without an explanation of the methodology and assumptions used in making adjustments, it could place little weight on the expert opinions.   The Judge wrote “[m]ere naked assertions as to dollar amount adjustments do not carry the day.”  The court held that the record was devoid of any competent evidence from which it could base a determination of true value and dismissed the homeowner’s appeal.

There is no doubt that when using the comparable sales method to value property an appraiser may adjust the comparable for variations between the properties.  But the tax appeal cases cited above raise the question of whether adjustments are required.  The answer to that question appears to have been answered by a 2000 condemnation case, where the appellate court held that while an appraiser may make adjustments to comparable sales it does not mean that the sales must be adjusted to be admissible. In that case, Casino Reinvestment Development Authority v. Lustgarten, the appraiser explained that he did not make any adjustments because he believed that the most important factor in determining the value of vacant land in Atlantic City was location and that he believed that the location of the subject property there was as good as any of the comparable sales in that case.  The appellate court concluded that the failure to adjust the comparables goes to the weight rather than to the admissibility of this evidence.

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