When An Appraisal And Financial Strain May Not Be Enough To Win A Property Tax Reduction

It’s common for lawyers to say or think that when they have good facts, they should argue the facts, and when they have good law, they should argue the law. A recent New Jersey Tax Court case involved circumstances where the law trumped the facts.  It involved a Ridgefield office property which was appraised at $1.3 million, less than half of its $2,726,500 tax assessment.  Yet the owners lost their 2025 tax appeal before the court decided what the property was worth.

In Zivkovic, Dragomir, and Koviljka v. Borough of Ridgefield, the New Jersey Tax Court held that it could not relax the tax payment requirement in an appeal filed directly with the court.  The decision shows how unpaid taxes and the choice of where to file can determine whether an assessment challenge can be heard.

Rising Assessments and a Vacant Building

Dragomir and Koviljka Zivkovic (collectively referred to as “plaintiffs”) owned a two-story commercial office building at 610 Broad Avenue.  According to Dragomir’s certification, the property had barely changed since 2006, but its assessment had consistently risen.  He described the property as an office space with relatively low ceilings and a weakened market for that type of building.  He additionally stated that they had suffered financial strain and that the former tenant had departed two years earlier due to the increasing property taxes.

On March 13, 2025, plaintiffs timely filed a direct appeal in the Tax Court of New Jersey to challenge the 2025 assessment.  Their appraisal report valued the property at $1.3 million as of October 1, 2024, the relevant valuation date.  Although they also had appeals pending for 2023 and 2024, the motion addressed in this decision concerned only 2025.

Unpaid Taxes Put the Appeal at Risk

Ridgefield filed a counterclaim and moved to dismiss plaintiffs’ complaint because property taxes remained unpaid.  The relevant arrears were approximately $22,393, plus interest, for the fourth quarter of 2024 and the first quarter of 2025.

Plaintiffs asked the court to relax the payment requirement in the “interests of justice,” arguing that their appraisal showed a grossly excessive assessment.  The court then raised a threshold question: did the applicable statute authorize that relief in a direct appeal?

After allowing additional briefing, the court held a second oral argument on February 13, 2026, at which point the required taxes were still unpaid.

New Jersey’s “pay now, litigate later” rule protects the revenue that municipalities need to operate while assessment disputes proceed.  Under N.J.S.A. 54:3-27, taxpayers must pay all taxes and municipal charges due through the first quarter of the appeal year, including delinquent taxes from prior years.

Different Statutes – Different Requirements

The court identified an important distinction in the statutes.  N.J.S.A. 54:3-27 governs appeals filed with a county tax board and appeals filed directly in Tax Court.  Its relief provision expressly permits a county board to relax the payment requirement when justice requires.  And if the board refuses to relax the payment requirement and the taxpayer appeals, the Tax Court may hear all issues without remand to the county board of taxation.

A separate statute, N.J.S.A. 54:51A-1(b), expressly authorizes the Tax Court to relax the payment requirement when reviewing a county board judgment.  However, the court concluded that neither N.J.S.A. 54:3-27 nor N.J.S.A. 54:51A-1(b) gives it that same authority in an appeal filed directly in Tax Court.

If you’d like to learn more about how these statutes require tax payments before an appeal can be pursued, we suggest taking a look at our previous blog posts here and here for more information.

There is also a crucial difference in payment timing.  In a direct appeal, a taxpayer can avoid dismissal for nonpayment by paying the required arrears before the dismissal motion is heard.  In an appeal from a county board judgment, all taxes or installments then due for the year under review generally must have been paid when the Tax Court complaint is filed, subject to the court’s authority to relax that requirement.

The Court Applied the Statute as Written

After examining the 1999 amendments and later recommendations to expand the Tax Court’s authority, the court found no statutory basis to grant relief from the tax payment requirement in a direct appeal.  Although the New Jersey Supreme Court’s Committee on the Tax Court had repeatedly recommended adding that authority, the Legislature had not adopted the change.  The court therefore could not insert language that the statute lacked.

Plaintiffs also argued that treating direct appeals differently violated their rights to due process and equal protection.  The court disagreed.  Plaintiffs could have initially filed their appeal with the county tax board and requested payment relief there, with subsequent Tax Court review if necessary.  Additionally, plaintiffs retained the opportunity to avoid dismissal of their direct appeal by paying the outstanding taxes before the hearing.  The court therefore concluded that the different statutory requirements did not violate plaintiffs’ constitutional rights.

On August 6, 2026, the court dismissed plaintiffs’ 2025 complaint with prejudice, meaning they could not simply refile the same complaint.  The decision did not determine the property’s value or resolve Ridgefield’s counterclaim.

Why the Appraisal and Financial Strain Were Not Enough

Although its statutory ruling resolved the motion, the court added that the owners would not have qualified for relief even if it had authority to consider their request.

An appraisal is an expert’s opinion.  Here, the report had not been admitted into evidence or tested through sworn testimony and cross-examination.  The court had therefore made no determination that the property was overassessed.  Producing the report itself did not justify withholding payment.

The claimed financial hardship also lacked supporting detail.  Plaintiffs’ general statement that taxes had strained their finances did not demonstrate an inability to pay.  They had not shown that they could not obtain funds from sources other than the property’s rental income.

Preserving the Opportunity to Be Heard

For property owners, the practical lesson begins before an appeal is filed: review unpaid taxes and consider how the choice of forum affects the relief available.  A county board filing does not guarantee an exception to the tax payment requirement, and a direct Tax Court filing does not eliminate the tax payment requirement.

Paying disputed taxes does not concede that the assessment is correct.  Owners can pay the required taxes, continue contesting the assessment, and seek a refund if they establish an overpayment.  Importantly, property owners should remember that addressing payment obligations at the outset helps preserve the opportunity to have the valuation evidence heard.