Tax Appeals For Commercial Property Owners:
This article should help commercial property owners understand the advantages and disadvantages of entering the commercial bypass process. On September 24, 2012, Allegheny County sent a letter to all commercial property owners who have a pending 2013 tax appeal with new assessments exceeding one million dollars.
This letter was a direct result of Judge R. Stanton Wettick’s prior Order creating an expedited system to give select commercial property owners a chance to appeal the 2013 assessments before the 2013 property taxes are actually due. The county letter indicated that the Board of Property Assessment (BPAAR) received over 14,000 commercial appeals, and that because of the complexity of the commercial appeal process, there is no guarantee that all 2013 appeals will be heard before the 2013 taxes are due.
The advantage of participating in the commercial bypass process is to expedite the appeal.
Once a bypass application is completed, the appeal is immediately transferred to the Court of Common Pleas of Allegheny County (Board of Viewers or BOV) and a conciliation is expected to be scheduled within 6 months or less. Theoretically, this means that you may be able to finish the entire 2013 appeal process and lower your 2013 assessment before the 2013 taxes are due. This advantage is a great option for anyone who has serious financial concerns about their ability to timely pay on the new 2013 assessment pending a potentially lengthy appeal.
Expediting the appeal is basically the only advantage of bypassing the first level hearing, but it is not always the best financial decision. Once a case is assigned to the BOV, the attorneys for the taxing entities now have time to order appraisals and can send discovery requests to the property owners. Thus, there are disadvantages.
By using the commercial bypass option, commercial property owners are automatically agreeing that they lose the first level (BPAAR) hearing. Allegheny County has indicated that once a bypass application is filed, the county will then send a notice sustaining the current assessment and the property owner will have to pay a $106.00 appeal fee.
The problem is that the first level hearing is often the best opportunity to obtain the lowest reduction, and it is hard to advise clients that they should consent to losing the first hearing. Especially considering, that commercial property owners are given the opportunity to present an appraisal and/or other evidence without ever having to share it with the taxing entities beforehand. This means that you gain the element of surprise with your evidence. Also, taxing entities will not have any time to prepare for cross-examination of your evidence and typically have zero evidence prepared to present at the BPAAR.
Also, if you are able to obtain a large reduction, there is no guarantee that any of the taxing entities will timely file a second appeal, meaning the case is over. This means that sometimes commercial property owners can receive large assessment reductions at the first level, with minimal scrutiny and/or appeals from the taxing entities.
I have always been a strong advocate of using the entire appeals process if possible. I have had many cases where we have won significant reductions at the BPAAR, which were never appealed by the school district to the BOV because they simply missed it. Sometimes, the taxing entities miss filing a second appeal, even when they meant to and if you choose the bypass process, you lose that opportunity.
If you can afford to pay the additional property tax increase, without impacting your own finances or causing financial strain to your tenants, then I prefer to use the entire appeals process and decline the County’s offer to bypass the BPAAR hearing.
However, if the new 2013 assessment is going to have a significant impact on your own short-term finances or those of your tenants, then I will sometimes recommend bypassing the BPAAR hearing and moving directly to the BOV. This is a complicated decision that needs to be jointly made with your counsel.
If you are a commercial property owner and have questions about the commercial bypass procedure or an Allegheny County property assessment issue, please feel free to call attorneys Noah Paul Fardo or Nicole Hauptman for help at (412) 802.6666 or email us at email@example.com.
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