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Brown v. Borough of Glen Rock

A-4279-98T2 (N.J. Super. App. Div. 2001) (Unpublished)

TAXATION—A taxpayer cannot challenge a property’s assessment by attempting to show that either the land or the improvements are not properly valued; challenges may be made only to the property’s total assessment.

A couple filed suit for reconsideration of the tax assessment on their residence after the county taxing authority increased the tax assessment by $30,000. The increase was allocated exclusively to the land on the rationale that the lot was undersized and non-conforming. The couple argued that the assessment exceeded the fair market value of the land. The tax court judge rejected the four comparable sales relied upon by the couple and concluded that the couple failed to prove the property’s “true value” (its fair market value), and that a presumption of correctness attached to the county taxing authority’s judgment. The tax court judge also concluded that even if the couple had demonstrated the true value of their property, they failed to present sufficient proof to sustain a challenge to the assessment based on discrimination. On appeal, the Appellate Division held that the municipality had not adequately explained the factual basis for its having increased the assessment for all undersized lots by $30,000 and determined that the couple’s assessment should therefore be reduced by $30,000. The issues of the “true value” of the property and the claim of “discrimination” which had not been decided previously were before this court after a remand by the New Jersey Supreme Court. With respect to the claim of discrimination, the Appellate Division recognized that courts generally apply the rules set forth at N.J.S. 54:51A-6 (commonly referred to as “Chapter 123”). Chapter 123 provides for a presumptive common level of assessment; however, “the statute by its own terms . . . is inapplicable in a revaluation year,” such as the one in which this $30,000 increase occurred. Instead, there is a presumption that in a revaluation year, all properties are assessed at true value, or 100 percent of their fair market value. In this regard, the Appellate Division concluded that relief from a discriminatory assessment under Chapter 123 in a revaluation year will only be afforded in “the most extreme or severe circumstances.” Here, the couple didn’t present any proof to contest the assessment. Accordingly, the Appellate Division concluded that there was no basis in the factual record to find “extreme or severe circumstances” to provide discrimination relief. With respect to the issue of the “true value” of the property, the couple produced no expert testimony. Rather, the couple offered four comparable sales with respect to the value of the land attempting to show that the land was over assessed. The Appellate Division relied on the tax court judge’s analysis that “a taxpayer seeking to establish a taxable value lower than the assessment must demonstrate the value of the entire property, not merely the value of the land or improvements.” The Appellate Division concluded that “piecemeal challenges to assessments of real property are not permitted except under exceptional circumstances,” and held that the couple was not entitled to a further reduction in their assessment beyond the $30,000 that the taxing authority couldn’t support in the first place.


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