Assessment Revaluations Demand Owner Attention

by Pullman & Comley, LLC
Contact

Hartford Business Journal - December 17, 2012

While it is December, many Connecticut assessors are not dreaming of sugar plums or dancing elves. Those assessors conducting townwide revaluations as of Oct. 1, 2012 are thinking about how many property owners — mostly commercial parcels — will appeal their new values.

"Revaluation" in Connecticut means the periodic determination of new market values and assessments for every parcel of real estate in a municipality. This can be a daunting project, given that a municipality can have thousands of assessment parcels. Many assessors outsource at least part of their revaluation responsibilities to a state-licensed revaluation company. Some delegate revaluation of their residential portfolio to a revaluation consultant and keep all or a portion of the commercial and industrial portfolio in house. They may take on the entire task themselves or seek assistance from appraisers to "benchmark" property types such as office buildings or shopping centers. Benchmarking is the development of metrics for a statistically valid sampling of a property type which, in turn, enables the assessor to determine the values of the remaining properties.

The lack of a consistent revaluation cycle in Connecticut used to be a standing joke. For decades the law mandated a maximum of 10 years between revaluations — which could be a virtual light year depending on underlying economic and market changes. Some communities managed to obtain a "bye" from the General Assembly for more than 10 years. For example, one Connecticut municipality successfully delayed its revaluation by almost 20 years. This made a mockery of the reassessment process, leaving many properties valued at a small fraction of what they were currently worth. It also put assessors in the impossible position of attempting to trend back the value of new construction in order to fairly equalize assessments.

Last, but certainly not least, the gambit of postponing revaluation hurt business personal property and automobile owners in a major way. How? Because by postponing revaluations and keeping real estate property values artificially low, it was necessary to raise the tax (mil) rate to an absurdly high number in order to generate necessary revenue. This in turn resulted in eye-popping tax bills for owners of personal property and automobiles, which unlike real estate, are revalued every year. All in all, it was an inefficient and even ludicrous situation.

The General Assembly addressed this mess in 1995 when the mandatory cycle was reduced to four years (later increased to five years in 2004) thereby injecting a major dose of equity into the process. However, Connecticut still drags out its revaluations when compared with other states that accomplish their revaluations every year or two.

Hopefully all this demonstrates that a revaluation is an important event for commercial real property owners. The old saw that revaluation is not relevant because the tax rate will be altered to reflect the community's revenue needs, multiplied by the changing trends in assessments, is way off the mark. Similarly, while valuation reductions may be expected in many communities, tax rates will likely be increased to compensate for these declines.

Initially, a revaluation assessment can be substantially inaccurate and result in an artificially high tax bill, if not challenged. Even if a proposed revaluation assessment reasonably reflects the market, property owners in a revaluation town should take care to confirm that the owners of substantially similar properties are being treated in the same way. For example, if your strip shopping center is being valued at $95 per square foot and several (similar) other strips in the community are at $50 per square foot, something may be wrong.

Thirty-seven communities across Connecticut are scheduled to enjoy the pleasure of revaluation on their Oct. 1, 2012 Grand Lists, a process which will play out in time to be reflected on tax bills due July 2013 and January 2014. Owners can expect to be contacted either by the assessor or the revaluation company with a tentative new assessment and an invitation to discuss any concerns. At the very least, owners should be certain that the size and configuration of the property is properly reflected on the assessor's records.

Once data are verified, owners should analyze the proposed value as suggested above. Experience teaches that a fair and equitable revaluation assessment is easier to attain if the owner participates vigorously in the informal process. If an acceptable result is not obtained, an appeal must be filed with the local board of assessment appeals in February or March. This filing will be succeeded by an informal hearing before the board.

An owner dissatisfied with the new value after this process has concluded must file an appeal to Superior Court within two months from the date of mailing of the board's decision. If an informal settlement cannot be reached, Superior Court trials are conducted before a judge without a jury and can consume anywhere from one day to a week or more depending on the scope of factual and expert appraisal testimony. Properties with engineering or environmental issues affecting value are especially complicated and expensive to litigate and may require more trial time.

 

Elliott B. Pollack is chair of the Pullman & Comley Property Valuation Department.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pullman & Comley, LLC | Attorney Advertising

Written by:

Pullman & Comley, LLC
Contact
more
less

Pullman & Comley, LLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!