Déjà vu all over again – Taxpayer fails to overcome presumption of correctness.

by: Anthony F. Della Pelle
19 Sep 2016

The New Jersey Tax Court recently issued another opinion finding that a taxpayer failed to overcome the presumption of correctness that attaches to a real property tax assessment.  While we have, in the past, expressed frustration with the seemingly endless run of decisions that raise the bar for taxpayers, the Court had little choice here.  It is important to note that this case was prosecuted by a pro se plaintiff with an inexperienced appraiser.

The Court found that the plaintiff’s appraiser did not engage in any meaningful review of the property’s highest and best use.  The subject property consists of a modest single family home on 1.29 acres.  The lot is more than three times the minimum lot size required under local zoning and the appraiser acknowledged that it was over-sized.  He acknowledged also that the property might have use as a “knock down.”  Incredibly however, the appraiser testified that he only considered the current use as a single family residence “because his ‘assignment’ was what ‘mattered.’”  He conceded that “he did not consider the four elements of highest and best use because his report was a ‘summary report’ and that his ‘assignment’ was to complete an ‘AS IS’ appraisal for ‘tax appeal’ purposes.”  As noted by the Court, the first step in any market value opinion is the highest and best use analysis, “[e]ven the simplest valuation assignments.”

The plaintiff’s appraiser conceded also that he did not consult with any participants in the comparable sale transactions upon which he relied.  The appraiser testified that he relied exclusively on the MLS for the information in his report.  The court did not accept this as reliable information.

Finally, the Court found that the expert’s adjustments between the subject property and the comparable sales, which ranged from 33% to 48%, were based solely on the appraiser’s “experience.”  He failed to provide any market data or analysis to support his adjustments.  Also, because of the degree of the gross adjustments, the Court questioned the comparability of the sales.  Here, the Court stated that “[a]djustments to sales of a large magnitude ‘vitiate comparability.’”

This case provides another cautionary tale for taxpayers and practitioners. It is imperative that the appraiser not only understand the assignment, but that he or she is familiar with the standards imposed by the Tax Court, which is where experienced legal counsel comes in handy.

A copy of DiSenso v. Wyckoff Twp. may be found here.


Related posts:

Taxpayer Foiled Despite Overcoming Presumption of Validity

Another Taxpayer Fails to Overcome Presumption of Correctness

Taxpayer Fails to Overcome “Presumption of Correctness”