Excessive Assessment Grieving - Case Study #2
This Case Study of a grievance argued for a property owner pertaining to Excessive Assessment was written by Warren Leisenring Jr., a consultant for the Tax My Property Fairly website and a 10-year member of a Board of Assessment Review (BAR) in Upstate NY.
We thank him for sharing this with our readers, for the purpose of giving 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.
In 2019, I shared the process of grieving an assessment with you on the website in a Case Study that I thought may be beneficial to other property owners. Now I have another grievance that is also worthy of a Case Study.
As it was with Case Study #1 I would like to begin by giving you a background of my history with the property tax assessment system. I am not a lawyer, an assessor, a real estate person, or an appraiser. I am a person who knows and wants to share some of the ways that are helpful to property owners who are overwhelmed by the system when grieving their property tax assessment. I was the first person to argue my assessment in Small Claims (1980) against the town in which I live. I won that grievance. After researching some unethical issues, my understanding of the property tax system grew immensely. Since then, I wrote a book that was published on how to lower your property tax assessment. I have served on the local Board of Assessment Review for the past 10 years and have been appointed for another five-year term. I was approached by Tax My Property Fairly to be a consultant and help write content for this website. I have represented property owners with their property tax grievances in upstate New York from Ontario County to Saratoga County, just west of Albany.
This Case Study relates to my experience in the second time I represented the same property owner in grieving their assessment. The first time was a few years ago. I prepared evidence showing the assessment was Unequally Assessed compared to other similar properties on the same assessment roll and explained the evidence to the assessor in an informal meeting. The assessor’s assessment was for $825,000.00 and I had evidence that it should be $460,000.00. After showing the assessor the evidence I had, the assessor and I agreed to an assessment of $575,000.00. A stipulation agreement was signed at that time and it became the new assessment.
In 2021 the property owner received an "impact statement" saying the new assessment was $917,700.00. This was an increase of $342,700.00. The assessor said this was mainly due to the local Real Estate Market and a revaluation of property assessments in the town. Something certainly was not correct. This was almost a 60% increase in assessment over the taxable value from the previous year. My first instinct was that the reduced assessment made at the informal meeting years prior was not entered into the Mass Appraisal System used by the assessor. The overall increase in assessments was approximately 9.8%. Using the old higher assessment this would have produced an assessment of $906,000.00 and with the high real estate market at the time it would seem correct to have an assessment of $917,700.00. However, using the new lowered assessment should have produced an assessment of $631,350.00. This was still an increase of $56,350.00 over the $575,000.00. The asking reduction in my complaint was for an assessment of $640,000.00.
The Informal Meeting
I asked the assessor many times if the correct assessment was entered into the Mass Appraisal System but never received a direct answer. This year I was grieving the assessment by Excessive Assessment and not by Unequal Assessment as it was prior.
The assessor asked me to submit the information I had to prove the property was Excessively Assessed. The property being grieved was a lakefront property. I submitted a spreadsheet of seven comparable properties to the property I was grieving. (attached) All of the properties were within 2.5 miles; all were lakefront properties and all were on the same road as the property being grieved. After removing the high and low values, the average Adjusted Sale Price was $645,511.00. This was approximately $272,000.00 lower than the current assessed value from the assessor.
The assessor replied that the comparables I supplied were not valid because they were not the same style as the property being grieved, not in the same town or on the same assessment roll. It was also stated that the only acceptable proofs were a Market Analysis completed by a Realtor or a current recent appraisal (within the past 12 months). All the reasons for denial given by the assessor contradicted the Real Property Tax Laws for Excessive Assessment. This will be explained later in this Case Study.
At this time, I knew any more discussion with the assessor would go nowhere so I made an appointment to go before the local Board of Assessment Review.
Meeting of the Board of Assessment Review
I was the second person to appear before the Board. The Board consisted of only three members. Two females and one male. I heard one female say that she did not want any of the responsibilities it took to run the meeting. (This was before the first person grieved their property.) The other female was in her first year on the Board and had no prior experience. The male was not present at the meeting but was on Zoom, for reasons unknown, where he could not see any of the evidence being presented. The two females elected the male to be chairperson and to run the meeting from Zoom.
When it was my time to grieve, the chairperson immediately said I only had ten minutes to grieve the property. Right after that, he stated the Board was going to take the last four minutes (of the ten) to ask questions. Next, I had to state my name, whom I represented, and why I was there. Now I was down to four minutes to grieve the property.
I asked the Board if the assessor had made a mistake by not entering the correct assessment into the Mass Appraisal System. Even though the assessor was present at the meeting, the Board never directly asked the assessor the question and the assessor never offered an answer to the question.
I explained the Real Property Tax Laws the best I could in four minutes proving the assessor was incorrect, but I quickly knew the Board did not understand the laws either. However, being prepared, I had a four-page letter completely explaining the grievance along with supporting documentation for each of the Board members. It also explained the laws and requirements for grieving a property assessment by Excessive Assessment. This material was provided for them to review before making any decision. Included in the letter was my request that if the grievance was denied that a legal reason be given for the denial.
It is very important for the readers of this Case Study to know this statement from the Board of Assessment Review Training Manual: (attached)
"The board, acting as a quasi-judicial body, should conduct the hearings in such a manner that all persons involved in the complaint have a full opportunity to make statements, present testimony, and produce evidence."
A timeframe should not be used since the Board can have multiple days to hear property owner grievances. The full opportunity right for the property owner, in this case, was denied by the Board.
The following is a summary of the information that was in the letter.
Board of Assessment Review
Name of Property Owner
Address of Property Being Grieved
Property Identification Number
My credentials were listed for the Board to see as I did earlier in this Case Study. The Board was told that I had grieved this property three years prior and the assessor had agreed the assessment was too high so a stipulation was made to lower the assessment by $250,000.00. If the assessment was too high at $825,000.00 and was lowered to $575,000.00, why would it be assessed correctly at $917,700.00 now? It made no sense other than the correct assessment was never entered into the Mass Appraisal System.
I addressed many errors the assessor had made in determining the assessment and in denying my grievance for the property.
1. I was told in a public statement that only a Market Analysis by a Realtor or a current appraisal were acceptable means of proof. This was also suggested in the "impact letters" sent out to property owners.
- I proved this statement to be false by providing a pamphlet published and recommended by the New York State Department of Taxation & Finance along with the Office of Real Property Tax Services showing and encouraging property owners how to estimate the market value of their home and the expense of a current appraisal is not necessary. When done by the suggested process, this is acceptable proof. (attached - "How to Estimate the Market Value of Your Home")
2. My comparable properties were denied for various reasons.
A. They were not in the same town.
B. They were not on the same assessment roll.
C. They were not the same style as the property being grieved.
A & B: My supporting documentation proved my comparables were valid and should not have been denied. The criteria required for grieving by Excessive Assessment is as follows:
- From the Board of Assessment Review Training Manual, Section 6, Grounds for Complaints on Assessments, Page 5. "Excessive Assessment" - Overvaluation - Proof: The complainant must establish the full (market) value of the parcel. (attached)
- From the RP-524 Instructions form: B. Excessive Assessment 1. Overvaluation. If you believe the assessed valuation of your property is greater than the full market value of the property, you may claim excessive assessment. This refers to all information beginning with General Information on Page 1 to and including the paragraph for Part 3, "Grounds for Complaint" on Page 2. (attached)
- Nowhere pertaining to the instructions for the Board of Assessment Review or to the property owner (RP-524, RP-524 Instruction) does it state that comparable properties "must" come the same town or same assessment roll. In addition it was pointed out by me that if the property owner was grieving by "Unequal Assessment" and not "Excessive Assessment", the requirements are that the comparable properties must then be from the same assessment roll. There is a distinct difference in the requirements to prove a grievance between Unequal Assessment and Excessive Assessment. (RP-524 & RP-524 Ins. - attached)
- I provided a section from the Assessors Manual for Valuation Standards. The section; "1.4.1 The Comparable Sales Approach" under Guidance states:
The Sales Comparison Approach develops a value for a subject parcel by comparing recent similar property sales (comparables) within the same market area to the subject parcel and adjusting the comparables for dissimilarities. Appropriate market areas may cross municipal boundaries.
This statement proves that a Real Estate Market can come from adjacent towns or other assessment rolls. This also proved the assessor was incorrect to deny my comparable properties for reasons A or B.
C: Because the comparable properties were not the same style as the property being grieved.
- It is common knowledge and practice among assessors that if there are not enough comparable sales of similar properties to the property being grieved then other types of properties can be used. I submitted proof that there were no comparable sales to the property being grieved for the past two years. (contains personal information so not attached) Therefore other types of properties can be used if adjustments are made to those properties so they are equal to each other if sold. This is also stated in the pamphlet published by the New York State Department of Finance and the Office of Real Property Tax Services under "What if the characteristics aren't identical?" (See below)
I asked the Board why different styles of residences were accepted three years ago but they are not accepted now? The laws have not changed, only the assessor's requirements. The chairperson stated: "I am not sure but we (the board) go by what sold." This is documented from the minutes of the meeting. (contains personal information so it is not attached)
It is important for the property owner to know what qualifies as "recent property sales" or in the words of the chairperson of the Board, "what sold" for comparison purposes. Recent property sales of similar properties is the core for the assessor to estimate the current full market value of a property. By New York State law the assessor is required to list the current full market value of all residential properties on the current tax roll. Because of this, the property owner does not need to worry about finding recently sold properties comparable to theirs through multiple avenues. This is already done by the assessor. All the property owner needs to do is look on the current tax roll or the local County Website listing the property identifications for the current full market values estimated by the assessor. If all full market values are calculated by recent sales of similar properties, then every similar or different style residential property can be used for comparable purposes when using the process recommended by the New York State Department of Taxation & Finance and the Office of Real Property Tax Services.
This is a clear indication that the chairperson (who is an appraiser) and the members of the Board did not know that the average of current full market values estimated by the assessor from the current tax roll and an average of recent sales for comparable purposes are one in the same. An assessor or Board of Assessment Review cannot just pick and choose what they "think" may be correct.
When an assessor is challenged on an assessment, the assessor is required to provide proof as to how that assessment was determined. I pointed out to the Board that the assessor provided no proof and there were many errors on the assessor's comparable properties.
- The assessor provided only one sheet of paper containing five comparable properties. The paper did not provide any computations for adjustments that were made to achieve a New Adjusted Sale Price.
- Only one of the five comparable properties sold in the past two years and that was for $72,900.00 under the full market value. The criteria for a comparable property was not met and therefore did not show on the comparable property list provided on the local County website.
- Two of the five properties were the same property.
- Three of the five properties were not lakefront properties. The property being grieved was a lakefront property.
- The Adjusted Square Foot Living Area price for all the comparable properties was incorrect. This is a large factor assessors use for comparable properties. The Square Foot Living Area price (the area in which you live inside your residence) included the entire square foot of the property. This is a major flaw in the Mass Appraisal System. A residence with a correct square foot living area price may be $75.00 per square foot but by the assessors method it could show a square foot living area price of $184.00 per square foot. It is all dependant on the amount of acreage, not living area, the property has.
The adjustments made to the comparable properties that I provided were clearly shown through a Comparable Sales Analysis Formula that was provided to the Board. (attached)
During the Board meeting, the Board did not ask the assessor for any documentation substantiating the assessor's assessment. Also, the assessor did not provide any information other than the one sheet of five comparable properties.
The meeting was abruptly adjourned after ten minutes.
I did not receive any notice from the Board on their decision which normally takes only a few days. The meeting was held on May 25, 2021 and it was now June 10, 2021. I sent an email to the town where the meeting was held and under the freedom of information act, I requested the minutes of the Board of Assessment Review meeting. To the best of my knowledge this had never happened before. When I received the minutes (which included the RP-525 form) I was not surprised to see the grievance had been denied. I was surprised to see the decision was made the same day as the meeting and no reason was given for denying the grievance.
I had no other choice than to go to Small Claims Assessment Review.
Small Claims Assessment Review
The first thing that I do not like is to have the SCAR Hearing on the assessor's "home court." That plays out about 70% of the time. I suppose the reason is so they can obtain additional information quickly if needed while the property owner can not.
This was the first time I had this particular Hearing Officer. Before the meeting I thought I noticed a different tone in the assessor’s behavior. I thought that maybe the assessor had obtained one of the copies of the grievance I gave to the Board to review. I asked the Hearing Officer if we had some discussion and before the meeting ended if the assessor and I decided to stipulate an agreement, could that be done? The Hearing Officer replied, yes.
From previous experience, I know some Hearing Officers want everything told to them rather than written done in a form of a letter (added pressure for the property owner). In case this meeting was to be a brief as the Board meeting I had prepared my entire argument in a packet to give to the Hearing Officer as well as explaining it in person. The Hearing Officer stated I had an hour to present the grievance.
I began with my seven comparable properties showing the assessors assessment was $277,700.00 higher than what my Adjusted Sale Price showed. I provided a Comparable Sales Analysis Adjustment Formula showing how and why all the adjustments were made in the comparable properties so to make them equal if sold. I explained that the assessor had denied the comparable properties because they were not from the same town, the same assessment roll or the same style.
Next, I provided the RP-524, RP-524 Instruction form and the section from the Board of Assessment Review Training Manual that explained the criteria and proof needed for Excessive Assessment. None of which stated the comparable properties must be from the same town, same assessment roll or the same style. (proving the assessor incorrect)
The assessor had consistently stated it was the local Real Estate Market and the revaluation that had driven the assessments in the town to such a higher rate. The Real Estate Market in the neighboring towns was much lower but the assessor stated I could not use them.
I provided the section from the assessors manual for "Valuation Standards" which stated the same Real Estate Market can cross Municipal Boundaries. (proving the assessor incorrect)
I pointed out all of the errors in the assessor's comparable properties.
- Not being waterfront properties.
- Same comparable property twice.
- The square foot living area includes the entire property’s.
- The main comparable property did not meet the criteria.
Next, I explained the errors made from the Board of Assessment Review pertaining to this grievance.
- Limiting the timeframe to ten minutes when they are charged with giving all persons in the complaint a full opportunity to make statements, present testimony, and produce evidence.
- Not reviewing the Real Property Tax Laws provided to them to make a competent decision.
- Not giving a reason for denial on the RP-525 form. From the BAR Training Manual: "After the board of assessment review has made its determination on each complaint before it for review, it has a statutory duty to notify the complainant of the board's final determination of the complaint and the reasons for the determination".
- Not asking the assessor to provide proof on how the adjustments and the adjusted amounts were made to the assessor’s comparable properties.
- It was found after discussion that the chairperson of the Board was an appraiser. Oddly enough he must not have understood Real Estate Markets could cross Municipal Boundaries.
When directly asked: "how are the adjustments in the comparable properties made and what are they", the assessor could only state they were made by the Mass Appraisal System and did not know what they were.
At that point, I rested my part of the grievance and now it was time for the assessor. The assessor submitted the same piece of paper with the five comparable properties as was submitted before the Board. This was the only evidence the assessor had to submit.
After 45 minutes of discussion, the assessor basically pleaded no contest and offered a lower assessment than was previously offered. The original offer was for $865,800.00. The new offer was for a rounded figure of $690,000.00. There is a section in the Real Property Tax Law that many property owners, assessors, and boards of assessment review are not familiar with. It is section 730 (Chapter 50-A, Article 7, Title 1-A, C ). If a property's assessment is over $450,000.00, the maximum reduction in assessment is limited to 25% of the assessed value of the property. In this case it would be $688,275.00. Although I was quite sure I could receive the lower assessment of $688,275.00 by having the grievance decided by the Hearing Officer, I took the sure thing and agreed to the stipulation with the assessor for $690,000.00. The SCAR Hearing was now over without the Hearing Officer needing to make a ruling.
My Thoughts on this Grievance and the Real Property Tax System
- Why did this grievance have to go all the way to Small Claims Assessment Review when such overwhelming evidence was provided? The assessor has been in office many years and should have known the basic requirements for proving Excessive Assessment. The assessor should have also known Real Estate Markets can cross Municipal Boundaries.
- Why did the Board of Assessment Review side with the assessor when the assessor was proven wrong and could not provide any proof in defense of the assessor’s comparables? The Board has an obligation to know or research the Real Property Tax Laws before making a decision on a grievance. This was not done.
- How could the chairperson of the Board, being an appraiser, not know or ignore the fact that Real Estate Markets could cross Municipal Boundaries?
- I want to thank the Hearing Officer who heard this grievance. The Hearing Officer had an open mind, knew the Real Property Laws, and let this grievance settle itself without having to make a decision.
- It is clear the property tax system has many problems. One big problem is giving assessors "free reign" with no one to "keep them under control." The offices over the assessors are for guidance only. In my experience, I have not seen any of the "guidance offices" ever tell an assessor they were wrong and correct them. I have seen many assessors across the state and the "good" assessors are a minority. I applaud the "good" assessors who still will take "informal meetings" at any time of the year, which is a requirement according to the Assessors Manual. I applaud the "good" assessors who will sit down with a property owner as an equal and explain their assessment to them.
- Another big problem is training. The training for a Board of Assessment Review member is basically "none." No previous experience in real estate, appraising, building, etc. is required. I have seen members appointed only to balance the membership between the town and the village. There are no tests, only a three hour course that a person needs to attend. They can and have slept through it at times. All who attend receive a certificate that they completed the course and are good for the next five years.
- I filed a formal complaint against the Board of Assessment Review to the town supervisor where the property owner lives. I did not ask the members be removed from office which is normal today. I asked for better training. I also asked this of the County Director. The response from the supervisor was it is a "personnel matter" and he could not comment any further. I do not expect anything to change.
- As for the assessor, I did not pursue a complaint because I believe the assessor learned enough and hopefully will change the way the process is done.
- I hope that everyone from the local assessor, the Board of Assessment Review, the County Director, and the town Supervisor learned something from this grievance. At the very least, maybe they will understand that the person arguing the grievance, whoever it is, may know what they are talking about.
Feb 9, 2022