Township’s Error Saves Taxpayer from Tax Increase
The owner of a mobile home park in Fairfield Township, Cumberland County, challenged the 2011 and 2012 tax assessments on the park in the Tax Court following a Township-wide revaluation. The Township filed a “cross complaint” alleging that it reserved its rights to apply added assessments for each of the tax years. The mobile home park consisted of 203 “pads” with water, electrical service, and sewer hook-ups where a mobile home owner could place the mobile home for a monthly rental fee. Other buildings such as an office and shop on the property were used by the owner, and the buildings did not generate a monthly fee.
At trial, both parties presented appraisal experts who utilized the income approach to determine the fair market value of the property which is appropriate for rental properties. However, the appraisers’ methods varied on how they utilized the income approach. The property owner’s expert only examined the actual income generated by the mobile home park without looking to the market place to establish fair market rental values for similar types of property. The Township’s expert located and analyzed nine other mobile home parks to determine a rental market value for the individual pads, and also determined that other types of income would typically be generated by a mobile home park like the subject property which were not actually generated at the subject property. At trial, the Tax Court found the Township’s expert provided a more reliable opinion of value because he went into the market place which provides a more accurate view of how much income a comparable property can generate.
The Township did take an odd approach to how it handled filing its “cross complaint.” The Township alleged that added assessments may be applied as a result of the investigation related to the tax appeals. The Tax Court determined that what the Township filed was not a counterclaim pursuant to R. 8:3-2(b), which might permit the assessment to be increased if the evidence supported one, but a claim to file an added assessment which is a term of art in the Tax Court. An added assessment is filed when work has been completed after the October 1st date of value which would increase the property’s value for the relevant tax year. Here, no such work was discovered, so the Township’s “added assessment” claim was irrelevant.
A copy of the Tax Court’s unpublished opinion in Tip’s Trailer Park, Inc. v. Township of Fairfield can be found here.
For more how determining market value has been addressed previously by the Tax Court, please see the following blog posts:
Court Rejects Property Owner’s Unverified Sales Evidence at Trial–Affirms City’s Value
Taxpayer Fails to Overcome “Presumption of Correctness”
Taxpayer Clears One Hurdle But Trips Over Another
Property Owner’s Appeal Dismissed for Failure to Follow Court Rules
