New Jersey State Real Estate Laws & Regulations : New Jersey Real Estate Lawyer & Attorney : Fox Rothschild Law Firm : Zoning, Commercial Leasing : Atlantic City, Princeton NJ

     As noted on the official website for the New Jersey Tax Court, due to recently enacted legislation, any local property tax appeals that are not added or omitted assessments may be filed directly with the Tax Court only if the original assessment exceeds $1,000,000. 

     The Assembly Committee that reviewed the legislation and recommended its adoption noted that "[i]ncreasing the assessed value requirement will decrease the overburdened Tax Court's caseload and allow these cases to be heard by county boards of taxation, which are better equipped to handle a large volume of tax appeals."  For what it is worth, the prior $750,000 threshold had not been increased since it was first established in 1979. 

     The legislation increases the threshold for making a direct filing from $750,000 to $1,000,000.  Therefore, any taxpayer whose assessment is below the minimum threshold may still challenge its tax assessment by filing a Petition of Appeal with the County Board of Taxation in the county where the property is located.  However, those taxpayers whose assessments exceed $1,000,000 may either file a Petition at the County Board level or file a direct appeal with the Tax Court.  There are advantages and disadvantages with both approaches.

     Notices of the tax assessments are typically mailed on or around February 1st.  

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     A recent article published in the Newark Star Ledger noted that the number of property tax appeals filed in New Jersey for the 2009 tax year is considerable. The author notes that nearly 16,000 tax appeals were filed in the State of New Jersey in 2009 which is nearing the record of 16,300 set in 1992. In Ocean County, appeals have tripled to more than 14,000 from the levels filed in 2008. In Essex County, the number of appeals is nearly twice the amount filed in 2008.

     Interestingly, the article highlighted several arguments that taxpayers often make in seeking a reduction in their property tax assessment. These often range from “I overpaid for my property” and “I bought at the peak of the market” to “my home is outdated and needs to be modernized”. For those property owners who did not file a tax appeal in 2009, they will have to wait until the 2010 tax year to challenge their assessment as the deadline to file for 2009 was April 1^st. 

   Nonetheless, it is not too early for a property owner to start preparing for the inevitable tax appeal next year. Below are a few tips that will aid all classes of taxpayers from the residential homeowner to the commercial developer.

1. DO YOUR HOMEWORK – At times, a taxpayer will focus on the attributes of their own home and disregard how their property sits in the general scheme of the surrounding neighborhood.   An Internet search or your local real estate broker may be willing to assist you in locating comparable sales (known as “comps”) that can be used to justify a reduction in your assessment if a home similar enough to yours has sold for a value less than what your equalized assessment is. However, as any taxpayer will quickly find, no two properties are exactly alike. Therefore, it is important to conduct thorough research to make sure you have the best and most comparable information available.   Ideally, a licensed appraiser should be consulted for a professional opinion. 
2. VERIFY YOUR INFORMATION – The tax assessor in each municipality maintains a property record card for every property within its taxing district. The property record card identifies the particular attributes of each property and provides an excellent starting point for anyone looking to lower their taxes. Sometimes, the property record card contains an innocent error or miscalculation that the tax assessor may relied upon for determining a property’s assessment.  Accordingly, sometimes a property owner can justify a reduction in its assessment based upon a correction of an error in the property record card. A property record card which is a public record can usually be obtained by contacting the tax assessor’s office – however, every assessor’s office has their own procedures for obtaining a copy of the card which should be strictly followed as a matter of courtesy and procedure
3. KNOW AND MEET THE DEADLINE – The deadline to file a tax appeal for the 2010 tax year in most municipalities will be Thursday, April 1, 2010. In those municipalities undergoing a revaluation and reassessment which may not be concluded by the statutory deadline, the April 1^st filing deadline might be extended (but not automatically). If the filing deadline is extended, the taxpayer will receive a written notice from its tax assessor listing the revised filing date. By rule and procedure, tax appeals must be RECEIVED by the filing deadline. 

     One of the easiest ways for a taxpayer to lose their right to appeal is to simply mail in their application by the filing date. Most people will simply drop their federal and state tax returns in the mail at the same time they file their tax appeals. This may past muster with Uncle Sam but it will not under New Jersey tax appeal laws.   To be safe, a taxpayer can hand deliver the appeal to the local County Board of Taxation or the Tax Court on the deadline date, but it must remember to hand deliver or mail copies to the appropriate recipients noted in the appeal form. 

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     On October 30, 2009, the Tax Court of New Jersey decided Mack-Cali Realty, LP, et al. v. Clerk of Bergen County, et al. which presented the question of whether the exemption from the realty transfer fee allowed by N.J.S.A. 46:15-10(a) where consideration is less than $100.00 is applicable from two conveyances from Mack-Cali to other limited liability companies which it was the sole member. While the decision will likely be appealed to the Appellate Division, the decision currently stands for the proposition that a deed between commonly-owned entities that transfers unencumbered real estate and for which no other consideration passed from grantee other than the amount set forth in the deed, then that transfer is likely exempt from the realty transfer fee requirements.

     The Tax Court construed the definition of "consideration" is stated in terms of “the actual amount of money and the monetary value of any other thing of value constituting the entire compensation paid or to be paid for the transfer of title to the lands, …” (emphasis added).   As such, while the definition includes the amount of any mortgage to which the transferred property is subject, it does not otherwise include any element not paid by the grantee to the grantor. Therefore, it does not include an indirect benefit of the kind imputed by the New Jersey Division of Taxation in affirming the County Clerk's determination that a realty transfer fee be imposed.  Accordingly, the Tax Court held that the consideration for each transfer was $10.00 as stated in the deed and the transactions are exempt from the realty transfer fee.

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     Imagine a situation where a burglar breaks into your home and “borrows” some of your possessions without paying for them. On the way out, the burglar drops its wallet on your kitchen floor. Instead of returning the wallet to the burglar, you immediately throw it in the trash. Do you think that you should have to compensate the burglar for failing to notify before throwing the wallet away? 

     Of course you shouldn’t. But, if you were a landlord and the burglar was your tenant, and you had a lease to allow the tenant to “borrow” your space in exchange for paying rent, the analogy might have a different conclusion.   That’s because New Jersey has a Tenant Abandoned Property Act (N.J.S.A 2A:18-72 et al.) (the “Act”), which permits a landlord of commercial or residential property to dispose of any tangible goods, chattels or other personal property left upon a premises by a tenant, but the landlord must reasonably believe under the circumstances that the tenant has left the property upon the premises with no intention of asserting any further claim to the premises or the property and the landlord must put the tenant on notice that the property will be disposed if not timely claimed.  An exception is made for perishable items, which the landlord may freely dispose in order to maintain the premises in a sanitary condition.  

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     The following entry was written by Burton J. Jaffe, Esq., a real estate attorney resident in Fox Rothschild's Princeton office.  Burt can be contacted at (609) 895-6630 or at bjaffe@foxrothschild.com

     On November 3, 2009 the Site Remediation Reform Act, NJSA 58:10C-1 et seq. (the “Act”) becomes effective. The Act materially changes the role of the New Jersey Department of Environmental Protection (“NJDEP”) with respect to the remediation of contaminated property in New Jersey.

     The Act changes the role of NJDEP from direct supervision of the remediation of contaminated sites to a compliance, enforcement and monitoring role of independent professionals conducting such work. The professionals must be licensed by the Site Remediation Professional Licensing Board which is established in NJDEP. The Board’s mandate is to establish licensing requirements for site remediation professionals and to oversee the licensing and performance of site remediation professionals.

     Additionally, the Act requires the NJDEP to inspect all documents and information submitted by a licensed site remediation professional, authorizes NJDEP to review the performance of a clean up under a broad range of circumstances (NJDEP can audit a clean up for up to three years after its conclusion) and mandates that NJDEP undertake direct oversight of contaminated sites under certain conditions and authorizes, but does not require, NJDEP to undertake direct oversight under certain other conditions.

     The purpose of the Act is to improve the speed of site clean-ups and the Act is carefully designed to accomplish this purpose without lessening the stringent remediation requirements already in place in New Jersey.

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     Following the Fair Housing Act (FHA) and the regulations enacted by COAH under the Act, many municipalities believed that they could prevent developers from locating affordable housing in areas not specifically zoned for affordable housing by complying with the FHA and COAH regulations. And that may be true, in part. Municipalities that meet their fair share obligation under the FHA and COAH regulations are immune from builder’s remedy suits. But what about good old fashioned prerogative writ claims? Apparently not.

     In the recent decision of Homes of Hope, Inc. v. Eastampton Township Land Use Planning Board, the appellate court held that affordable housing constitutes an “inherently beneficial use” for the purposes of obtaining a use variance. This is true whether or not the municipality has met its fair share obligation under the FHA and COAH regulations, or not. 

     For practical purposes, if your affordable housing development requires a use variance, you must show that the proposed development satisfies both negative and positive criteria.  The decision in Homes of Hope means that the “positive criteria" requirement for granting a use variance is automatically satisfied, by the very fact that the proposed development is affordable housing. Developers will, of course, still need to satisfy the "negative criteria" requirement, or show that the proposed development would not be detrimental to the municipality in general or to the future residents of the development.

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     One New Jersey county is on the cusp of cracking a Top 10 List that probably leaves little to be desired. 

     As reported in an article by Jim Walsh published in today's edition of the Courier-Post, (follow link here for online article) a new study published by the Washington D.C. based Tax Foundation has concluded that property taxes in Camden County are the highest in New Jersey and 11th highest in the nation (out of 790 "high population" counties) when measured as a percentage of a home's value.  The national median is nearly 1 percent (0.96%) - Camden County's was estimated at 2.33%. Following close behind were Gloucester County (31st), Salem County (32nd) and Burlington County (46th). 

     Not to be outdone, the North Jersey counties fared even better (or worse...) according to the Foundation's ranking of median property tax paid per owner-occupied home in 2008.  New Jersey had six of the top 10 counties (from 1 to 10, Westchester County, NY ($8,890); Nassau County, NY ($8,628); Hunterdon County, NJ ($8,492); Bergen County, NJ ($8,446); Rockland County, NY ($8,430); Essex County, NJ ($7,924); Somerset County, NJ ($7,743); Morris County, NJ ($7,557); Passaic County, NJ ($7,370); and Putnam County, NY ($7,324). The national median is $1,897.

     According to its website,  Tax Foundation "is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937."  Click here to review a copy of the Foundation's press release on the property tax census survey. 

     The question remains - what can be done to fix the problem?  That remains to be seen, but suffice it to say that property taxes are sure to be a hot button issue in the upcoming Gubernatorial elections in New Jersey.  From a practical perspective, the deadline to file an appeal challenging a property's assessment for tax purposes is April 1st annually (unless extended in which case the taxpayer would receive written notice).  It is important to note, however, that pursuant to state statute the property taxes for the 2010 tax year are determined, in part, based upon the fair market value of your property as of October 1, 2009. 

     October 1, 2009 is a week away.  One can only hope that next week will not mark the start of a top 10 ranking for Camden County, or a blue ribbon for the six North Jersey contenders. 

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Several South Jersey communities are exploring the feasibility of solar panel projects on land formerly used as landfills. In a time of economic downturn, the notion of “turning lemons into lemonade” can take on many faces. Although the headlines have been dominated recently with health care related issues, energy issues and the “Green” movement appear to have some staying power. While constructing solar panels is believed to be a viable source of alternative energy, obtaining an approval from the state and local governments for such facilities is not without its challenges. Navigating the extensive regulatory landscape governing solar energy is a delicate balance of public and private concerns. The tightening of the credit markets over the past year has diminished the available capital for such projects; however with care and consideration a project may qualify for grants and incentives from state and federal agencies.

The Borough Council of the Borough of National Park (Gloucester County) recently passed a resolution designating a prospective redeveloper of a closed landfill on property formerly utilized for the disposal of demolition material and local household waste. The parcel is the only undeveloped tract of land in National Park Borough.   As noted by the article published in the August 23, 2009 edition of The Gloucester County Times, although the project is in its infancy stages it appears to have the support of the local community.  According to the proposal submitted by Westfield Energy, the prospective redeveloper, the former landfill could eventually house a 30-acre field of solar panels as well as over 130,000 square feet of office and retail space with an increasing focus on environmentally sustainable buildings.  

It is noteworthy that last fall, Governor Corzine unveiled New Jersey’s latest Energy Master Plan which would provide the blueprint for the state’s energy policies for the next decade. If you need a crash course or even a refresher, follow this link and continue to the bottom of the page for an article by Steven Goldenberg, Esq. of Fox Rothschild LLP which was published in the June 2009 edition of the Mercer Business Journal. 

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On August 6, 2009, Governor Jon Corzine signed into law legislation that authorizes the incorporation of “green building” requirements into New Jersey’s Uniform Construction Code

P.L. 2009, Ch. 106 (the “Act”) authorizes the Commissioner of Community Affairs to amend the Uniform Construction Code’s energy subcode to establish enhanced energy-saving construction requirements, which requirements “may exceed the requirements of national model codes.”

While the Act specifically adds the International Energy Conservation Code as one of the model code alternatives to be used as a basis of the energy subcode (thus ensuring that the State’s code will be based on national standards), it also provides that the Commissioner may amend or supplement this energy subcode at any time, although only once, prior to 2012. 

In amending the subcode, the commissioner must rely upon 10-year energy price projections provided by an institution of higher education, and the added costs of such construction requirements must be “reasonably recoverable” through energy conservation over a period of not more than seven (7) years. 

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