Tax Court “Joins” Government Entities In Case Of First Impression

by: Allan Zhang
25 Nov 2020

In Metz Family LTD. Partnership v. Twp. of Freehold, the New Jersey Tax Court recently analyzed whether the Chapter 123 “equalization” ratio should apply under relevant state law, N.J.S.A. 54:51A-6, to the value determinations made by the Court. In addition Tax Court Judge Mala Sundar’s recent opinion ruled on the motions filed by the defendant, Twp. of Freehold (“Freehold”) to have the Court join the Monmouth County Board of Taxation and the Director, Division of Taxation under R. 4:28-1, to aid in the determination of this issue.

This matter stems from the Tax Court’s March 9, 2020 opinion establishing the value of the subject property for tax years 2014-2017 and April 14, 2020 opinion denying Freehold’s motion to reconsider the value conclusions. The value conclusions made by the Tax Court were less than the local property tax assessments. The subject property is a retail shopping center with a warehouse.

Plaintiff, Metz Family LTD. Partnership (“Metz”), along with the Monmouth County Board of Taxation and Director, Division of Taxation opposed Freehold’s motions citing the application of the ratio is “a routine exercise in any local property tax appeal” and is a matter “which can be decided by the court without their joinder.”

Freehold argued the ratio does not apply as the municipality’s annual local property tax assessments are “annual reassessments” pursuant to N.J.A.C. 18:12A-1.14(i). The Director and Board contend, inter alia, that the mere fact that they have “regulatory administrative or quasi-judicial oversight or authority at some point” does not mean they should participate. Judge Sundar opined that this case of first impression in the Tax Court involves “significant public interest since it can impact all the assessments in the Township, and implicates the Uniformity Clause of our State’s Constitution.” Accordingly, the Tax Court agreed with and granted the Township’s motions to join the Director and County Board for purposes of resolving the outstanding issue of applying the average ratio under R. 4:28-1(a).  This cliffhanger decision leaves us with much anticipation for Judge Sundar’s ruling on the application issue.

To review the Metz Family LTD. Partnership v. Twp. of Freehold decision in its entirety click here.