New Jersey Transit Corporation v. Town of Secaucus

A-5698-96T5 (N.J. Super. App. Div. 1998) (Unpublished)
  • Opinion Date: December 8, 1998

ASSESSMENTS—For purposes of establishing exemption from real property taxation, a government agency that gives proper notice to a municipality can “acquire” land even if only its landlord has signed the lease.

When the State or a State agency acquires property, the property becomes exempt from real estate taxes on January 1 of the calendar year following the date of acquisition. For this to happen, written notice of the acquisition must be sent to the tax assessor on or before January 10 of that following calendar year. Further, if the real property is acquired between January 1 and January 10 and the notice is given on or before January 10, the real property becomes tax exempt as of the date of acquisition. Here, a State agency sent the proper notice on January 3, 1995. The notice was given before the State agency signed the lease or took possession of the property. In fact, the lease was not executed by the State agency until January 13, 1995. According to the tax assessor, the State agency had not “acquired” the property on or before January 10. The Appellate Division disagreed. First, statutes granting tax exemptions “in favor of governmental agencies should be liberally construed” in favor of the exemption. Factually, the landlord had signed and delivered the lease to the State agency in December, 1994. In order for the State agency to enforce the lease against the landlord, the critical signature required was that of the landlord, which had already signed and delivered it to the State agency. Construing the statute liberally, the Appellate Division held that the State agency’s letter to the tax assessor evidenced its acceptance of the lease, and consequently the State agency had “acquired” the property within the meaning of the statute as of January 1, 1995, the stated effective date of the lease.