A Tale of Two Cities . . . Wanting to Tax the Same Property

by: Anthony F. Della Pelle
6 Jun 2014

In a recent appeal, the property owner – a condominium association – filed a tax appeal for its property which straddles the municipal boundaries of South Orange and Maplewood. The condominiums are located on the Maplewood side of the boundary line, and a 1.46 acre parcel containing a driveway, shrubbery, and plantings are located on the South Orange side. The property owner’s complaints alleged that the South Orange portion was not separately taxable from the condominium units because it is excluded from taxation as a common element of the complex, and the assessed value is shared among the individual units. Plaintiff renewed a previously denied motion for summary judgment to settle the legal issue of whether the disputed property qualified as excludable common elements, which South Orange opposed alleging there is no authority for the Township of Maplewood to assess the value of the property located within South Orange.

Common elements are excluded from separate taxation under N.J.S.A. 46:8B-19, which is a section of the New Jersey Condominium Act. Neither party disputed the classification as common elements. However, South Orange argued that it is constitutionally and statutorily obligated to assess the properties within its boundaries. The Tax Court held that, although South Orange is permitted to assess the property, the property is excluded statutorily as a separate taxable item as the common elements of the condominium association. Although potentially an impractical outcome for the parties, the judge did note that her decision did not prohibit the parties from discussing alternative resolutions available by statutes like N.J.S.A. 54:4-25, which permits municipalities to assign who may collect the taxes on a property that straddles multiple municipalities.

A copy of the Tax Court’s unpublished opinion in The Top Condominium v. South Orange can be found here.

For more on how condominium appeals have been handled previously by the Tax Court, please see the following blog posts:

To Conquer, Taxpayer Must Divide

Failure to Fix Report Dooms Expert’s Testimony

Montclair Tax Assessment: Might be Wrong, But Not In Error

Taxpayer’s Challenge to Re-Assessment Out of Time