Property Tax Appeal Deadline Is Nearing

Rising real estate taxes can be challenged by filing an appeal of the property’s 2011 assessment. Due to the significant decline in property values in recent years, a reduction of a property’s assessment and taxes is often warranted.

Fox Rothschild attorneys have successfully prosecuted taxpayers’ appeals throughout New Jersey before the Tax Court and various County Boards of Taxation in tax appeals involving properties of all kinds. Some of our successes include:

  • A reduction of more than $10 million in assessed value for an office building located in Mercer County, which saved the taxpayer almost $300,000 in property taxes in one year alone.
  • More than 40 percent reduction in the assessments for three noncontiguous light industrial properties located in Mercer County that we successfully argued were a single economic unit.
  • Annual tax savings of more than $30,000 per year for a 44,000-square-foot flex warehouse/office space in Burlington County (assessment reduced by 31 percent).
  • Many assessment reductions ranging from 10 percent to nearly 30 percent of high-end residential properties in appeals for their owners throughout New Jersey.

Fox Rothschild attorneys vet properties efficiently and guide a taxpayer on the process and suggest whether an appeal should be taken.

To contest a 2011 assessment, appeals must be filed by April 1, 2011, unless a later filing deadline is ordered. If an appeal is not filed on time, the opportunity for lower taxes in 2011 is lost.

Our attorneys Jeffrey M. Hall (Princeton), Jeffrey M. Herskowitz (Atlantic City) and Alexander M. Wixted (Princeton) will work with you to evaluate whether a tax appeal is warranted. Please contact any one of them in advance of the deadline if you would like to know the merits of an assessment appeal for your property. We can also assist you with regard to properties located throughout the United States.

Jeffrey M. Hall, Co-Chair, Tax Appeals Practice
Princeton
609.895.6755 |  jhall@foxrothschild.com
 

Jeffrey M. Herskowitz
Atlantic City
609.572.2327 |  jherskowitz@foxrothschild.com
 

Alexander M. Wixted
Princeton
609.895.6730 |  awixted@foxrothschild.com
 

Supreme Court allows enlargement of time for land use appeals

The New Jersey Supreme Court allowed the enlargement of the 45 days filing requirement to file an appeal of a land use decision. In the case of Hopewell Valley Citizens' Group, Inc. v. Berwind Property Group Development Co., Justice Long, writing for the Court considered the issue of whether an objector to a planning board’s grant of site plan approval is entitled, in the “interest of justice,” to an enlargement of time under the Civil Practice Rules. These rules require an interested party to file an appeal of a planning board approval within 45 days from the date of publication of the notice of decision.

The Supreme Court held that the circumstances presented in this case warrant enlargement of the forty-five-day period because “it is manifest that the interest of justice so requires.”

The Municipal Land Use Law provides that “[t]he period of time in which an appeal of the decision may be made shall run from the first publication of the decision, whether arranged by the municipality or the applicant.” N.J.S.A. 40:55D-10(i). Appeals from local land use decisions are accomplished by actions in lieu of prerogative writs. The Civil Practice Rules set forth the time limitations on the institution of such actions. Those rules (a) acknowledges a general limitations period of forty-five days “after the accrual of the right to the review, hearing or relief claimed . . . .” The portion of the rules relating to appeals of land use decisions, provides that no action shall be commenced “after 45 days from the publication of a notice once in the official newspaper of the municipality or a newspaper of general circulation in the municipality . . . .” A subsection of the rule provides: “The court may enlarge the period of time where it is manifest that the interest of justice so requires.”

It is undisputed that in this case the objector failed to meet the deadline imposed by the Rules insofar as it did not file its complaint within forty-five days of the first notice published by the developer. The Court’s task is to determine whether the objector is entitled, in the “interest of justice,” to an enlargement of time under the Rule and, hence, to an adjudication of the merits of its claim.

The Rule’s language suggests that a court has discretion to enlarge a time frame when it perceives a clear potential for injustice. The Rule was aimed at those who slumber on their rights. Certain cases are excepted from the rule governing limitation of actions. Included in that category were three traditional types of challenges: “important and novel constitutional questions”; “informal or ex parte determinations of legal questions by administrative officials”; and “important public rather than private interests which require adjudication or clarification.” The Court recognized that, as a general proposition, “ignorance of the existence of a cause of action will not prevent the running of a period of limitations except when there has been concealment.”

The court found that the Plaintiff was entirely reasonable in calling the Board Secretary for information on the date of publication of the notice of decision to determine the date of expiration of the period of time to appeal the land use board decision. Plaintiff was inadvertently misled. To be sure, the developer was blameless, but so was plaintiff. Further, the six-day delay was such that defendants could not have suffered prejudice sufficient to warrant the barring of this litigation. The Court held that this was the exact type of circumstances that the Rules were designed to address.

The decision stands for the proposition that developers can no longer rely on the time limitations for appeals to be strictly applied where an objector has not slept on its rights if such violation of the time limitation was based upon a mistake coupled with an objector’s reasonable reliance. The decision also points to the importance of a developer’s actions. In this instance, had the developer sent the publication to the objector, the result would have been different.

Offshore Wind Projects Obtain Expedited Approval Process

Offshore wind projects are inching closer to fruition.  As described in an article on philly.com today, the federal Department of the Interior reported yesterday that portions of the continental shelf off the New Jersey coast are one of several "high-priority" areas in the Mid-Atlantic that would get expedited review for regulatory approval.  In an apparent effort to streamline the wind energy approval processes, the Department of Interior's Bureau of Ocean Energy Management, Regulation and Enforcement will prepare broad regional environmental assessments as opposed to the previous requirement that each individual wind developer prepare its own study.  As the article notes, the policy change is expected to shave about two years off of the nearly decade long approval process.

Notice of 2011 property tax assessments are "in the mail"

All taxpayers should expect to receive soon their notice of assessment for the 2011 tax year.  By statute, every assessor, prior to February 1st, must notify each taxpayer by mail of the current asssessment and the preceding year's taxes.  The notice is typically in the form of a postcard and will contain information instructing taxpayers on how to appeal their assessment.   

Note, however, that the notice is sent to the addressee of record, which may not be the physical address of the subject property.  Often times for commercial properties, the postcards are mailed to the home office, and can be inadvertently discarded or ignored. 

The deadline to appeal this year's tax assessment is Friday, April 1, 2011.  In select municipalities, that deadline may be extended beyond April 1st, in which case the taxpayer would receive notice at the address of record. 

USEPA Increases Focus on Stormwater Management

Guest Post by David Restaino

 

Stormwater permits are designed to control run-off of deleterious materials and improve the environment. Some developers are discovering that the failure to comply with such a permit can also bring far worse consequences: huge penalties. 

 

Stormwater permits generally include a number of mandatory conditions, such as creating a stormwater pollution prevention plan, following best management practices, performing periodic inspections and documenting the inspection results. Unfortunately, a number of developers allegedly failed to create a plan or perform the required inspections, according to complaints filed by the USEPA in federal court. In most instances, the USEPA resolved the compliance issues with the developer, but not until it received hundreds of thousands of dollars in penalties – or more. But enforcement is not limited to large developers. 

 

More recently, a news report indicated that stormwater compliance has been enforced against a commercial retail complex, which was cited for over $50,000 in penalties for violating the federal Clean Water Act for over 1,100 days. As a consequence of the increased enforcement activity, large and small developers need to ensure that they read the conditions in their stormwater permit and implement a program designed to maintain stormwater controls and conduct the required inspections. Failure to do so can easily lead to significant penalties. 

REMINDER: December 1st Deadline to Appeal Added Assessment

The clock is ticking to file a tax appeal to challenge an added assessment, an omitted assessment, or an omitted added assessment.  Wednesday, December 1, 2010 marks the statutory deadline for taxpayers to challenge assessments levied against real property relative to improvements completed in 2010.  In most circumstances, an appeal would be filed with the county Board of Taxation in the county where the property is located.  However, where the amount of the added or omitted assessment exceeds $750,000, aggrieved property owners can elect instead o file an appeal directly in the Tax Court.  In either instance, the appeal must be received by December 1st.

Taxpayers can be saddled with a hefty tax bill in an added or omitted assessment.  Appealing such an assessment offers benefits not only for the 2010 taxes to be paid, but also in determining the fair market value of the assessment to ensure that the property is properly assessed in future years.  

Eligibility for Section 1603 Payments Set to Expire Soon

A recent Reuters article succinctly summarizes some of the chief arguments in support of extending the Section 1603 Renewable Energy Grant Programs that were, arguably, the driving force behind the burgeoning alternative energy development of the past couple of years.  While the tax credits for constructing qualifying projects will not expire until 2016, the renewables industry benefits from the almost immediate grants that can be used to fund project costs.  Barring an extension, this industry-driver will expire in about six weeks. 

S1481 - The Rice Bill Unveiled

Recently, the New Jersey Senate Community and Urban Affairs Committee reported favorably on Senate Bill No. 1451 (S1451) with Committee amendments. The so-called Rice Bill, named after the State Senator primarily responsible for seeking reform, proposes to amend significantly the Local Redevelopment and Housing Law. The Eminent Domain Act of 1971 and the Relocation Assistance Act of 1971 would also be amended. As a basis for reform, the legislation itself states that the Legislature received input from a number of interested citizens and interest groups over an extended period of time. 

S1451 proposes to create two tracks for municipal designation of redevelopment areas: the first as a non-condemnation redevelopment area and the second as a condemnation redevelopment area. For the latter, enhanced requirements will be built into the statute consistent with two seminal cases decided within the last few years, Harrison Redev. Agency v. DeRose, 398 N.J. Super. 361 (App. Div. 2008) and Gallenthin Realty Development, Inc. v. Borough of Paulsboro, 191 N.J. 344 (2007). Under this legislation, a municipality will be required to give notice to a property owner informing that their property is at risk of being forcibly taken for redevelopment purposes, giving them a time frame within which they can contest the redevelopment designation. Further, blight determinations must be recorded at the County Recording Office. Finally, the redevelopment designation will lapse after a period of time unless redevelopment work is ongoing.

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Reminder: Applications for Farmland Assessment DUE AUGUST 1st

 

Just a friendly reminder that applications for Farmland Assessment are due by August 1, 2010.  Late applications will be rejected, which could impose a significant tax liability on the unsuspecting property owner.  You can read more about farmland assessments at: http://njrealestatepropertylawanddevelopment.foxrothschild.com/2009/07/articles/tax-appeals/applications-for-farmland-assessment-due-august-1st/

 

 

Amendments to DEP Rules on Coastal Development

On June 7, 2010 the Division of Land Use Regulation of the New Jersey Department of Environmental Protection adopted amendments to the Coastal Zone Management Rules. The amendments foster and promote development in the Coastal Zone. The amendments impact the Bay Island Rule by exempting from the restrictive requirements of that rule Bader Field (the now closed Atlantic City Municipal Airport) in order to allow intense resort development; the Atlantic City Rule to modify the list of protected streets ends in the City of Atlantic City by adding additional street ends and allowing the closure of other streets based upon recent proposed commercial and casino development; and the Traffic Rule to modify the parking requirements for residential development to permit one parking space per unit for those units 650 square feet or smaller within one-half mile of an oceanfront beach or dune. If a unit is larger than 650 square feet, then two parking spaces per unit are required. These amendments facilitate coastal zone development demonstrating flexibility while attempting to provide adequate parking for residential development in crowded coastal areas.

Affordable Housing - Senate Adopts S1

The NJ Senate adopted S1 a comprehensive reform of the Fair Housing Act, N. J. S. A. 52:27D-301 et seq.   S1 sponsored by Sen. Lesniak, passed the Senate by a vote of 28-3, with 9 senators not voting (click link for press release).  S1 is eliminates the Council on Affordable Housing ("COAH") and delegates the responsibility to monitor municipal affordable housing compliance to the State Department of Community Affairs. DCA's function will be only the review of municipal housing data and compliance with S1's standards for municipal housing compliance, with no mediation or other dispute resolution power. 

S1 creates a legislative presumption of compliance regarding the Mt. Laurel constitutional obligation. The presumption of validity would apply to all municipalities where (1) there are at least 33% multifamily units as a percentage of the entire municipal housing stock or (2) 7.5% deed restricted affordable  housing as a percentage of municipal housing stock. 

The Bill does not take into account municipal zoning ordinances and does away with the concept of zoning providing a realistic opportunity for the creation of a municipalities fair share of the regional affordable housing need.  In fact, S1 expressly eliminates any consideration of regional housing obligations and fosters the pre Mt Laurel I concept of zoning as having to only consider the universe that exists within the municipal boundary, as if each of New jersey's 566 towns exists on an island isolated from the greater regional economy.

 

S1 is unconstitutional on its face 

 

The Bill has drawn extensive criticism from affordable housing groups, who correctly claim that S1 will result in less affordable housing opportunities than under the present COAH process.  This Bill is so seriously flawed that it is highly unlikely to withstand judicial scrutiny, as demonstrated by teh NJBA analysis of the Bill. If adopted, the result of S1 will be more litigation and more delay in the creation of decent affordable housing, at a time when affordable housing is in great demand, given the Great Recession's impact on employment.

 

We will keep you apprised of the Legislature's consideration of S1 and the court actions that will inevitably follow... stay tuned.

Are Hospital Exemptions in Jeopardy?

Yet another Tax Court decision applying N.J.S.A. 54:4-3.6 (the Exemption Statute) was issued that should give pause to New Jersey’s Medical Centers.  Before the court in AHS Hospital Corp v Town of Morristown, were cross-motions for summary judgment, pretrial motions seeking to dispose of the case by means in lieu of a lengthy trial.  Morristown succeeded in securing a favorable decision on its issues but the Hospital did not.  As summarized by the Tax Court’s website:

 

“The court found that portions of buildings owned by Morristown Hospital and used as offices and a café were not exempt from local property taxes as hospital purpose properties because the spaces were used by private physicians and other private third parties for profit making purposes.  The court also found that there exists a genuine issue of material fact as to whether the use or operation of the remainder of the subject property was conducted for profit.”

 

 

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Rooftop Solar Panels - Green in More Ways Than One

A recent article in the Newark Star-Ledger highlighted the influx of solar energy projects in New Jersey and the financial incentives driving those projects.  Notable aspects of the article include:

  • The Board of Public Utilities ("BPU") developed a solar renewable-energy certificate program ("SREC") to create a marketplace for solar energy producers to trade energy with utilities.
  • Commercial installations account for 57 percent of the SRECs, or 84.32 megawatts, with 22 percent of the SRECs being generated by residential installations, and the balance from municipalities and schools.
  • Nearly $3 billion dollars have been granted to qualified applicants under the Section 1603 Payment in Lieu of Tax Credit programs.  Of that, $27 million dollars has been paid for 52 solar projects in New Jersey -- an average of more than a half million dollars for each project
  • In December 2009, Federal Express completed a 2.42 megawatt rooftop solar array at its distribution hub in Woodbridge, New Jersey.
  • In Edison, a food storage warehouse recently installed a system that will provide 45 percent of the plant's energy needs per year.

While time is running short, it is not too late to consider your rooftop for a solar panel installation.  The Stimulus Act requires that the project commence construction in 2010 in order to claim the 30% payment. 

New Jersey Appellate Division upholds "Area in Need of Redevelopment Designation"

In the New Jersey Appellate Division case of Suburban Jewelers vs. City of Plainfield, the Appellate Division upheld Plainfield's redevelopment designation of a portion of Plainfield's Central Business District. A number of commercial property owners appealed the City's redevelopment designation contending that the designation adversely affected their properties. The property owners argued that the City failed to make the constitutionally required finding of "blight", the findings were based upon a net opinion, and the City planning board failed to consider the benefits of the present uses of the properties.  In addition they argued that the trial court failed to consider the opinion of another judge in the same vicinage. The court rejected all the arguments advanced by the property owners. 

The Court found:

1. Gallenthin principles must be followed in determining whether an area is blighted.

2. The City's planning consultants did a thorough review of the area investigating the conditions of each property including any deterioration, use, occupancy and vacancy of each property, site characteristics including drainage, operations, parking, and lighting, tax payment history, police incidents and crime rate, and any unsafe conditions and code violations relating to  each property.

3. The City's determination that the study area is in need of redevelopment  comes invested with  a presumption of validity.

4.  While a net opinion is not adequate, the City's report contained detailed factual findings rather than a mere recitation of the statutory criteria and met the "substantial evidence standard" because the report discussed specific conditions of each property and explained in detail why those conditions rose to the level of obsolescence etc. and explained why those conditions were detrimental to the safety, health and welfare  of the community. Those conditions were found to have a detrimental effect on surrounding property.

5. The Court reaffirmed the Gallenthin standard that " while the meaning of blight has evolved and broadened it still has a negative connotation and retains its essential characteristic: deterioration or stagnation that negatively affects surrounding properties."

6.  The Court did not require the planning board to consider the benefits of the current uses of the study area.

Accordingly this case upholds a redevelopment designation when there is a proper study and reinforces that the redevelopment decision is subject to a presumption of validity which will be upheld so long as the decision is supported by substantial credible evidence.  

 

 

The Time of the Application Rule - The New Standard for Land Development Applications

On May 5, 2010, Governor Christie signed legislation that represents a shift in the long-standing right of a municipality to amend or alter its land development regulations after an applicant has filed a land development application. The legislation, S-82, modifies the development application process under the Municipal Land Use Law to afford significant benefits to developers. 

S-82, commonly referred to as the “time of application” or “time of decision” legislation, provides that a land development application will be governed by the municipal development regulations in effect at the time that the application is submitted, and any provisions of any ordinance adopted subsequent to the submission date are not applicable to the application filed prior. However, the new legislation does not extend to ordinances that are adopted relative to health and public safety, and thus an applicant will continue to be subject to the reach of such ordinances to the extent applicable. The legislation affects development applications submitted on or after May 5, 2011, which gives municipalities time to update their Master Plans and zoning ordinances in anticipation of the new procedures.  

 

Although the legislation does not guarantee in any way that an application will be granted, it clarifies the development regulations by which the application will be examined.   As Governor Christie noted, “[t]his legislation makes common sense changes to improve the application process and move New Jersey in the right direction of providing a friendlier environment for job creation, while keeping safeguards for public health and safety in place." 

 

A copy of the legislation can be viewed by clicking on the following link.