Excessive Assessment Grievance - Case Study #1
This Case Study of a grievance argued for a property owner pertaining to Excessive Assessment by Warren Leisenring Jr., a consultant for the Tax My Property Fairly website and a chairperson for a Board of Assessment Review (BAR) in Upstate NY. Warren has served on the BAR for the past eight years.
We thank him for sharing this with our readers, with hopes that it will give property owners some insight as to what to expect and how to prepare their grievance.
The following is actual information presented in a grievance from the Informal Meeting with the assessor, and meeting before the Board of Assessment Review to the Small Claims Assessment Review (SCAR). Only personal information was omitted.
All forms, spreadsheets & other informational papers can be found at the end of this case study.
Informal Meeting with the Assessor
I asked and received an informal meeting for me and the property owner with the assessor in her office. We began the discussion using Unequal Assessment as the argument and I quickly saw a defensive nature with the assessor. I showed the assessor ten comparable properties I had taken from the 2019 final tax roll and five comparable properties from recent sales in that town. I explained to her that the comparisons were done according to the published process recommended by the New York State Department of Taxation & Finance and the Office of Real Property Tax Services in their pamphlet "How to Estimate the Market Value of Your Home." The comparable properties showed the current assessment was approximately $58,000 too high. She paid little attention to that information and made a comment of: "if I were to lower him that much then everyone else on the tax roll would have to make up the difference." I guess it didn't matter that the property owner was paying more than he should. The assessor was convinced that the assessment she had on the property was correct and was not willing to change it. Seeing this was not going to be productive, I motioned to the property owner that we should leave.
Later that evening I received a phone call from the assessor. She stated that the property owner's residence was in immaculate condition and reinforced that the assessment was correct and that properties such as this sold for that amount all the time. This was quite the statement considering the assessor had never been in the residence, on the property and that the residence was now 14 years old. The assessor then requested photos of the interior of the residence, which were later supplied. After speaking for about an hour, I could see the assessor would never budge on the assessment and ended the conversation. The following day I spoke with the property owner and told him we were changing his grievance from Unequal Assessment to Excessive Assessment. I was once told by an executive director of the New York State Assessor's Association that it was much easier to prove Excessive Assessment than it was Unequal Assessment.
Appearing before the Board of Assessment Review
When preparing to meet with a Board of Assessment Review it is very important to assume nothing. Prepare your case as if the Board of Assessment Review knows nothing.
I made each member of the Board a complete copy of the grievance so they could listen to me rather than passing around the information to each other. Contained within each copy was a spreadsheet of the ten comparable properties from the same 2019 final tax roll as the property being grieved. A spreadsheet of the five recent sale comparable properties. A Comparable Sales Analysis Adjustment Formula instruction manual. (This manual was developed by myself having had 47 years of experience in the construction trade). A copy of the pamphlet on "How to Estimate the Market Value of Your Home." Supporting documentation that all comparable property information from the County website was accurate as entered by the assessor. (attachments at end)
Seemingly stunned by the information they received, one of the Board members commented that "this wasn't my first rodeo, was it?" I simply replied "no, it wasn't."
I pointed out to the Board what a property owner needs to do to claim Excessive Assessment according to the RP-524 instruction form.
- Overvaluation. If you believe the assessed value of your property is greater than the full market value of the property, you may claim an excessive assessment. To establish the full market value of your property, you should supply the kind of information set forth above. This being:
- In the case of one, two or three family residential real property, you also have the option of proving that the percentage of full market value represented by your assessment is higher than the average at which other residential properties are assessed on the same assessment roll. Once you have established the average percentage at which other residential properties are assessed, you must apply this percentage to the value of your property. If the result is lower than your assessment, you may request that your assessment be reduced to that lower amount.
An easier explanation is: 1) A property owner must prove an estimated full market value less than that of the assessor. 2) The full market value must be at a higher percentage of value than the average of other residential properties on the same assessment roll.
Important note: Assessors will tend to refer back to this statement under Unequal Assessment. "If you believe that your property is assessed at a higher percentage of value than the average of "all other" properties on the same assessment roll, you may claim Unequal Assessment." Assessors will tell the property owner that they must prove their case against every property on the assessment roll which would be thousands. This is not true! Under Excessive Assessment, as stated above, it is against "other" not "all other" which can mean one or a few. It also states "other residential properties" only.
I told the Board members that the Comparable Property Spread Sheet and the new market value that was proven was done according to the recommended approach by the New York State Department of Taxation & Finance and the Office of Real Property Tax Services. I also stated to the assessor and the Board that they did not have to like the approach or agree with the approach but it was done according to the law and was a valid approach. The response was an astounding, "We do not do it that way in this town." I reminded the Board that they took an oath to uphold Real Property Tax Laws.
A Board member asked me if I thought the square foot price of $78.30 at the lower assessment was fair. I replied: "yes I do, considering three of the four comparable property square foot prices of $84.03, $69.44 and $92.98 were submitted as evidence by the assessor."
The assessor then told the Board that my comparable properties were not good comparables due to the fact that the property owners residence was a Contemporary and I used Colonial, Raised Ranch, Ranch & Cape Cod residences for comparables. I immediately pointed out to the Board that the assessor used a log home, two old styles and a Colonial for her comparables. All assessor's know that if there are not enough recent sales of the same type of residence then other types of residences can be used for comparable purposes when adjustments to those comparables are made. For this grievance, that was exactly the case.
The assessor's estimated value of the property was $254,400.00. The new fair market value proven by the property owner was $196,526. This showed a higher percentage of value of 22.75%. All requirements needed to prove Excessive Assessment had been met and the assessment should be lowered to that amount according to the law.
A Board of Assessment Review has the option of not lowering an assessment, making a partial reduction or a full reduction of the requested amount depending on how they feel the case was proven. It was now up to the Board of Assessment Review to decide.
The Board sent back a letter stating there was no reduction in assessment by just checking the boxes on the RP-525 form for: 1) the proof of value you presented was inadequate and 2) the supporting data was insufficient. (see attachment at end)
This was surprising since they had never seen a grievance so well prepared as this one. In my opinion, this is a typical response when a town has a Board of Assessment Review that is not familiar with Real Property Tax Laws. It is told over and over to the Board that the assessor is always presumed to be correct. So when the Board does not know the answer or is influenced by the assessor it is always easier to side with the assessor, right or wrong. Do not accept this type of response. The Board has a responsibility to explain exactly why a grievance is denied.
Small Claims Assessment Review (SCAR)
Being denied by the Board of Assessment Review, I talked to the property owner about filing for SCAR. He said let's just accept our losses and let it go. I said the decision made by the Board was wrong and being a friend, if he paid the $30.00 filing fee I would fight the case for free. He reluctantly agreed. I filed for small claims assessment review. After receiving the appointment date, I went online to obtain some information about the Hearing Officer. It turned out he was a lawyer so I focused more on Real Property Tax Laws for my grievance.
Being the plaintiff I was first to explain the grievance. I had prepared a separate folder with all the information organized within it to give to the Hearing Officer after the case had been heard. I knew he did not like to have the information read to him off a paper but rather explained to him person to person.
I told the Hearing Officer I believed the reduction in assessment was denied due to the fact the Board of Assessment Review did not understand the Real Property Tax Laws or the process for when a property owner is grieving by Excessive Assessment. I also believed the assessor did not reduce the assessment due to her own personal feelings of what the property could sell for if sold, not the facts presented to her. The assessor then commented that the Board of Assessment Review for her town was well qualified.
I explained the grievance was about Excessive Assessment and that Excessive Assessment occurs when you are assessed for items you do not have. I showed the Hearing Officer the pamphlet on "How to Estimate the Market Value of Your Home" published by New York State Department of Taxation & Finance and the Office of Real Property Tax Services. I told him this is referenced in many instructional forms to assist the property owner in contesting their assessment. I showed him my comparable properties and the suggested adjustments that were made to each property to make them the same as if they were to be sold. I then explained that the comparable properties taken off the 2019 Final Tax Roll were the same as if they were recent sale properties. This was done by showing the Hearing Officer a statement on the RP-524 Instruction form. "New York State law now requires that the assessment roll display the assessor's estimate of the full market value of your property". Therefore it makes no difference if the full market value comes from comparison properties of recent sales or off the 2019 Final Tax Roll. They are both the assessor's estimate of the current full market value of each property.
Next I offered the Comparable Sales Analysis Adjustment Formula which explained exactly how adjustments were made and why the amount of the adjustments were as they were. I emphasized to the Hearing Officer that New York State knows and confirms that exact comparables properties are rare (usually track homes) and adjustments need to be made to other comparable properties in order to make them the same if sold. This is exactly what the spread sheet showed.
There were only two requirements for the property owner to meet: 1) An estimated full market value less than that of the assessor. 2) A higher percentage of value than others on the same assessment role.
Both of these had been proven with an estimated full market value of $196,526.00. This was $57,874.00 less than the assessor's full market value. It also proved a higher percentage of value of 22.75% as required for Excessive Assessment.
As for the assessor's square foot price of her comparable properties, I explained there were errors in her evidence. The assessor had included the land price in the square foot price of the residence which you can not do. This dramatically lowered the square foot price of the residence on all of her comparables.
In order to prove fairness, I took the assessor's comparables and ran them through the same approved approach as I had done with my comparables. I then removed the high and low comparable properties from my recent sales, my comparable properties off the 2019 final tax roll and the assessor's comparables. I believe my results surprised both the assessor and the Hearing Officer. My recent sales showed an assessment of $197,149.33. My comparables off the tax roll was $193,683.50. The assessor's comparables was $197,522.50. The average of the three was $74.23 less than the asking reduction in assessment. (attachment at end)
The assessor's only defense provided were the four inaccurate and vague comparable properties and her opinion on she had seen houses like this one sell all of the time for what the assessment was and she felt the assessment was fair and accurate.
In my rebuttal I again brought up the mathematical errors in the square foot price of the assessor's comparable properties, the lack of proof on how and what adjustments were made to her comparable properties to achieve the new Adjusted Sale Price. I also stated that no where in the New York State Department of Taxation & Finance, the Office of Real Property Tax Services or the New York State Assessor's Manual does it say an assessment can be based on personal opinion or personal feelings. It does say assessments are to be done according to current and accurate data.
Decision of the Hearing Officer
The Hearing Officer lowered the assessment from $254,400 to $206,000. The requested amount was $196,526. This is the actual statement from the Hearing Officer:
"This case was presented with neither sides having what normally would be good comparable properties to compare with the Petitioner's property. However, the Assessor's comparable properties were not comparable in many respects and the Petitioner's representative presented a better job at explaining why he chose the alleged comparable properties that he chose. For information to the parties, the writer does not give credit for mere opinions or like the use of averages as neither is necessarily a reflection of the value of the Petitioner's property. The Assessor repeatedly stated that she believed that the Petitioner would ask for more than the assessed value of his property if she was to sell the property, but the property is not for sale. All things considered, the Petitioner's representative made a better case to reduce the assessment of the Petitioner's property. I did not reduce the assessment by the full amount requested because none of the comparable properties were truly comparable. Therefore the assessment of the Petitioner's property will be reduced to $206,000.00 and that is my decision."
Although pleased with the outcome of this grievance, many disturbing obstacles still face the property owner from having a fair grievance.
- The Hearing Officer stated in his determination letter: "the writer does not give credit for mere opinions or like the use of averages." Yet the instructions for the RP-524 form tells the property owner to use the average. It states: "In the case of one, two or three family residential real property, you also have the option of proving that the percentage of full market value represented by your assessment is higher than the average at which other residential properties are assessed on the same assessment roll."
- The Hearing Officer denied the full reduction of the grievance because in his personal opinion none of the comparable properties were truly comparable. He contradicted himself when he said, "the writer does not give credit for mere opinions" but yet denied the full reduction due to his personal opinion of what is or is not a good comparable property and not the facts presented.
- The Assessor's Manual states: "The importance of current and accurate data cannot be overemphasized. More than anything else, the success of systematic analysis and the general accuracy and uniformity of assessments rests on current, accurate data..
- There is still a lot of work to be done. The system is broken and needs to be fixed.
Any questions or comments you may have about this grievance feel free to send an email to: email@example.com
Documents Used in this Case Study Grieving by Excessive Assessment
Comparable Property Analysis Chart 2019 Final Roll
Comparable Sale Analysis Chart - Recent Sales Final Roll
Comparable Sales Analysis Chart - Assessor's Comparable Properties 2019 Final Roll
Estimate Your Own Market Value Pamphlet
Sales Analysis Adjustment Formula
See More Resources on our Web site on Grieving by Excessive Assessment
Grieving by Excessive Assessment
February 5, 2020