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125 Monitor Street v. City of Jersey City

A-3732-03T1 (N.J. Super. App. Div. 2005) (Unpublished)

TAXATION; VALUATION—A property’s purchase price is not the best indication of its market value where the sale can be characterized as other then an arms length sale.

A property owner sued its municipality for making an erroneous property tax assessment, arguing, among other things, that the property’s purchase price was “the best indication of its market value.”

The owner bought the property from its own bank. The bank acquired the same property “through a merger with another bank.” When it decided to sell the property, the bank did not go through the “traditional” channels of marketing the property, but only attempted to sell it to its customers. Additionally, the property’s “vacancy rate was unusually high,” and its sale price may have been influenced by the fact that its improvements violated numerous zoning requirements and it had some environmental conditions. All of these factors led the Appellate Division to find that the owner had not partaken in an “arm’s length sale” of the property since the price did not reflect the property’s true value.

Thus, the owner had not “overcome the presumption” that the tax assessment was valid.

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