Our law firm represents a broad range of clients that include many of the world’s largest property owners, tenants, and management companies. We also represent a select list of significant local governments.
Our services all relate to the same thing: property taxes and the assessment of real estate. This includes the various tools local governments and schools sometimes use to generate revenue in lieu of those taxes, such as payment in lieu of taxes agreements and user fees.
Tax Appeals (Certioraris)
The majority of our assignments are tax appeals. In New York State these are known as Article 7 proceedings, and are commonly referred to as “tax certioraris”. Tax certiorari proceedings are not for the faint of heart and are rarely pursued by general practitioners. The rules and deadlines are generally unforgiving and complex, and it is the norm for commercial tax appeals to extend for at least several years before the court approves a reduction in assessment. Nonetheless, tax reductions can be significant and well worth the effort, often including refunds relating back to the first assessment challenged.
We have many years of experience litigating complex valuation issues involving different types of properties and property owners, including: major office complexes and portfolios; real estate investment trusts; hotels, motels, and hotel franchises; retail establishments and super malls; assisted living facilities; restaurants; resort properties; golf courses; country clubs; utility properties; apartment complexes, condominiums, and cooperatives; vacant land; and power generation facilities.
In addition, we have litigated property tax matters involving environmental contamination, PILOT assessments, exemptions, business enterprise value, lodging valuation, capital improvements, Fair Housing Act challenges to reassessment, new construction, conservation easements, land under water, and many others.
Illegal Tax Assessments
From time to time, close examination of a client’s assessment reveals that it is partially or entirely illegal. By this we mean that the assessment should be corrected because the basis upon which it was set was improper, regardless of whether the value seems appropriate for the property. Proceedings to challenge an illegal assessment are somewhat different from certiorari proceedings, though they have much in common. Perhaps the most common example of an illegal assessment is known as “selective reassessment”, or “welcome stranger”, in which the Assessor has increased a property’s assessment based on a recent purchase price even though no improvements were made and no general revaluation has occurred. We will investigate the circumstances of any assessment increase and, where appropriate, pursue a reduction based upon grounds of illegality.
The list of available property tax exemptions in New York State is quite long. Common exemptions apply to new construction, agricultural uses, religious and charitable uses, hospitals, and educational institutions. Exemptions may also be available to veterans, senior citizens, the disabled, and others. Some exemptions are mandatory and some are discretionary. Some require that an application be properly completed and filed at a specified date before the assessment roll is published, while others are automatic. Generally, the law and assessors take a narrow view of when an exemption must apply, and therefore the property owner must be diligent about seeking the exemption; merely meeting the criteria for an exemption may not be sufficient if you have not followed the required procedure.
Payment In Lieu of Taxes
In some circumstances, our clients desire to enter into or renew a “payment in lieu of taxes” or “PILOT” agreement with the local government. A municipality may wish to enhance economic development and jobs creation in exchange for various tax breaks and other incentives offered to the property developer. Our firm is often engaged as co-counsel to advise on the property tax aspects and implications of such agreements and to negotiate the terms of the PILOT contract that relate to assessment challenges and the payments due under the contract. In some situations, we have been called upon to investigate whether an existing PILOT agreement is still advantageous to the owner and, where it is not, to take steps to unwind the agreement and seek a reduced assessment.
Equalization Rate Challenges
Because most municipalities in New York State do not assess at 100% of market value, the State government performs valuation-oriented studies to determine the level of assessment in each municipality relative to full value and thereby equalize each municipality to all others. This equalization process is a complex process that is heavily based in statistical methodology. The resulting equalization rates are used to distribute school and county taxes among multiple municipalities and are used in a number of other ways, including:
- Establishment of tax and debt limits
- Allocation of costs, such as for jointly operated hospitals among participating
localities or an injury to a volunteer firefighter, etc.
- Determination of state assessments (special franchise) or approval of local assessments (state-owned land)
- Determination of ceilings (railroad and agricultural values) and exemptions
- Determination of level of STAR exemptions
- Apportionment of sales tax revenues and joint indebtedness
In addition, equalization rates play a key role as evidence in court proceedings on the issue of assessment inequity and small claims assessment review hearings. Our law firm has represented many municipalities in ensuring that the State’s determination of the equalization rate is accurate and fair.
International best practices recommend a regular and comprehensive municipal-wide reassessment program for all tax assessing governments. Embarking on a reassessment program, particularly where one has not been conducted recently, is a major, labor-intensive, complex, and costly undertaking that is fraught with controversy. Some two-thirds of the municipalities in New York State do not conduct a regular reassessment program. When they do, Huff Wilkes offers thorough legal counsel and guidance based on our many years of experience and knowledge of the law of reassessment.
Our services often begin with a review and analysis of current practices, particularly focusing on legal issues and questions posed by municipal officials and their constituents. We assist in the preparation of a set of requirements for the reassessment contractor, and oversee the contract process as Contract Administrator. We provide counsel and informational services at public meetings, and oversee the reassessment process through delivery of the final assessment roll.
In Rem Foreclosures
Property tax foreclosures, also known as “in rem” proceedings, are often commenced by local or county government en masse to collect delinquent property taxes. These proceedings are highly technical in nature and a rigorously detailed process must be followed in order for a property to be taken by the municipality and then auctioned to satisfy the delinquent taxes.
Representation requires more than technical expertise, however: in rem proceedings may have an enormous impact on the lives of residents of the community, and we are mindful of the need to provide effective counsel while also being sensitive to what is at stake. Huff Wilkes has represented major municipalities in the prosecution of foreclosure proceedings that resulted in the recoupment of many millions of outstanding tax dollars, as well as the defense of individuals and local businesses that were improperly made the subject of in rem foreclosure proceedings.