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Subject: Should the HOA pay for property tax appeal?

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JimF2
(New Jersey)

Posts:7

10/08/2008 7:34 AM
Our 262-unit new construction condo development is assessed out the hoo-ha as far as municipal property taxes go. Everyone's assessed value is way higher than the market value, and in most cases, what people paid for the units. This obviously is a hot topic within our community, so we've been discussing a tax appeal for the past year or so. The way it works in NJ is that you can appeal your property tax assessment based on the market value of the home as of the previous October, so we all decided to wait until '09 to file the appeal based on the current (low) values. We know we want to do a group appeal, possibly using the same attorney to help those who are interested file the paperwork and do the actual appeal. The issue is that some on the board think that the HOA should either pay for the attorney or pay rebates to the homeowners. I think this is a ridiculous idea for a variety of reasons, such as - why is it the HOA's responsibility to reimburse homeowners for previously paid taxes? It's not like that money came to us in the first place. The HOA can be used to organize the appeal, but I don't like the idea of the HOA laying out the money to do the appeal on behalf of the homeowners. What does everyone here think? Good idea or bad idea? -Jim

KirkW1
(Texas)

Posts:1190

10/08/2008 8:34 AM
I would be inclined to organize the group appeal and setup a fund to do said appeal. Now in my area there are companies that will handle the appeal and charge based on the amount of savings they bring. You may want to look into that option. If you need money up front, I would find out how much and set a fee to be paid in if you want to be part of the group. The more people who participate the lower the fee needs to be. OR, another idea is to make a special assessment to fund this thing and represent everyone. But that should have very heavy support. And you should be relatively sure that the amount they save will be worth the cost.

SusanW1
(Michigan)

Posts:2316

10/08/2008 9:08 AM
What board do you go in front of where you have to have an attorney? Around here, any indivudual owner can go in front of the township assessors and plead the case at appeal time. Good luck in getting any adjustment, especially at this time. The lines will be around the block with people appealing. This is not a good time to try to get property taxes lowered. Pray they don't get increased!!

MaryA1
(Arizona)

Posts:2485

10/08/2008 9:13 AM
Jim, I'm not clear how taxes are levied on condos, but my opinion is that whoever pays the taxes has the right of appeal and pays any expense associated with it. If a tax bill that is paid by the HOA is being disputed then the HOA takes care of the appeal and the unit owners aren't involved. If the tax bill being disputed is paid by the individual unit owners then it's their resp. to appeal and the HOA shouldn't even be involved. Just my opinion!

KirkW1
(Texas)

Posts:1190

10/08/2008 6:28 PM
While i generally agree with the idea Mary advances that the person who benefits pays, I also think it could be beneficial for the HOA to help the process. The HOA (in my opinion) should be about helping the residents. But I would lean heavily toward a system where those who contribute are represented as the group. Those too cheap are on their own. As for the thought that you can't protest as the line will be long, don't listen. Those in line will see their values lowered while the others won't.

BruceD
(Ohio)

Posts:9

10/08/2008 8:41 PM
I have to agree with Mary, whomever is paying the taxes (owner) has to appeal, there is absolutely no justification for the HOA to get involved. At least not out of HOA funds, if a group of owners want to get together and fund the appeal themselves, that would be fine. As far as rebates being provided by the HOA. that is totally off the wall.

JimF2
(New Jersey)

Posts:7

10/10/2008 8:07 AM
Posted By SusanW1 on 10/08/2008 9:08 AM What board do you go in front of where you have to have an attorney? Around here, any indivudual owner can go in front of the township assessors and plead the case at appeal time. Good luck in getting any adjustment, especially at this time. The lines will be around the block with people appealing. This is not a good time to try to get property taxes lowered. Pray they don't get increased!! It works a little differently here. We would go to our county board first and then if they rule that our argument has merit, the town then gets involved. And in our judgment this is a great time to appeal our tax assessment, since home values are so much lower now than what our assessment is. -JF

JimF2
(New Jersey)

Posts:7

10/10/2008 8:14 AM
Posted By KirkW1 on 10/08/2008 6:28 PM While i generally agree with the idea Mary advances that the person who benefits pays, I also think it could be beneficial for the HOA to help the process. The HOA (in my opinion) should be about helping the residents. But I would lean heavily toward a system where those who contribute are represented as the group. Those too cheap are on their own. I agree that the HOA can play an important role in organizing the appeal, getting the word out etc. The only thing that would throw a wrinkle into the idea of who should pay, is that if 4 people decide to appeal (1 for each style of unit), the assessments on every other style of that unit in the development would change, too. So if only 4 people pay, everyone benefits. From the homeowners POV, why should I pay if someone else is going to - be it another homeowner or the HOA. From the HOA POV, why would we pay for each individual to appeal their taxes? Why should that come out of our funds? Doesn't make sense. We like the idea of a group appeal (strength in numbers, economy of scale, etc.), so we want to get as many people involved as possible. -JF

KirkW1
(Texas)

Posts:1190

10/10/2008 6:58 PM
... The only thing that would throw a wrinkle into the idea of who should pay, is that if 4 people decide to appeal (1 for each style of unit), the assessments on every other style of that unit in the development would change, too. So if only 4 people pay, everyone benefits.... That would not be the case where I live. If four people appealed, then four people would have lower taxes. I do not in any way get an automatic benefit from someone else's appeal. But I could use the success of a similar unit in my appeal. As a note, in my area there is no real need to employ a lawyer in appeals. The first step is to go to an informal meeting and show why you are appraised too high. Most people find that is all they need.

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