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Rosen v. Plainsboro Township

A-3349-06T1 (N.J. Super. App. Div. 2008) (Unpublished)

TAXATION; REMEDIATION COSTS — Remediation of significant water damage can be treated as work that increases the assessed value of property and therefore the property’s tax assessment can be increased without the need for a municipality to submit, and obtain approval of, a compliance plan.

Two condominium owners held title to six units, each part of a larger development. Significant remediation of water damage was performed on the exterior wall of the units. The total cost came to $4.1 million. In 2004, prior to completion of the remediation, a municipality wide property revaluation was conducted. The municipality assessed each of the owner’s units at $130,000, reflecting a land value of $65,000 and an improvement value of $65,000. In 2005, the improvement value was increased by $25,000 based on the completion of the remediation. The following year, the owners challenged the municipality’s decision to the county taxation board claiming that the municipal assessor did not have the authority to increase the assessment for 2005 without seeking a compliance plan. The board denied their claims and affirmed the assessment for 2006. The condominium owners appealed to the New Jersey Tax Court. It denied their claims on the basis remediation is exempt from the requirement to seek a compliance plan. On appeal, the Appellate Division agreed with the Tax Court’s finding that the remediation was not deferred maintenance, but was work that increased the value of the units. It agreed with the Tax Court and also rejected the condominium owners’ argument that exempting remediation from the requirement to seek a compliance plan was restricted solely to remediation of contaminated soil. As a result, the municipality’s assessments were affirmed.

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