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Tedesco v. Montclair Township

A-2245-01T3 (N.J. Super. App. Div. 2003) (Unpublished)

TAXATION; EXPERTS—The sales price of a property is not always indicative of its assessed value and the property owner’s explanation of how the sales price was reached is accorded little value in determining the “special” circumstances that yielded the lower sales price.

A bank purchased a property at a sheriff’s sale and transferred it to an intermediate holder for a nominal amount. The property was listed for sale at$72,900. A buyer who owned sixteen or seventeen rental units at the time of trial before the lower court and had dealt in single and multi-family homes for over ten years, ultimately purchased the property for $65,000. The property was assessed at $118,000 and the buyer filed a tax appeal. At trial, although not offered as an expert witness or as a real estate appraiser, the buyer was given broad latitude and was permitted to “comment on physical similarities and differences between houses he considered to be potentially comparable to the subject property.” He was permitted to “delve” significantly into the realm of what he deemed to be comparable sales, couched in terms of his choice of a bid price, to discredit the municipality’s expert. The lower court, however, found that the buyer “failed to present sufficient competent evidence to overcome the presumption of correctness of the county board assessment and establish a true value of the property different from that established by the county board.” The Appellate Division deferred to the Tax Court’s opinion. It pointed out that it had been “uniformly recognized that the sales price may be indicative of the true value of a property but it is not controlling, and it is for the fact finder to weigh and appraise the factors surrounding its sale to determine if there were ‘special’ circumstances that may have had an effect on the amount of the sales price without affecting its true value.” Specifically, the Court pointed out that “[a] bank, which is not typically motivated to own and maintain residential property but is more concerned with recouping money on a defaulted loan, sold the property to taxpayer within two months of purchasing it at sheriff’s sale. Moreover, the taxpayer acknowledged he often purchased properties at lower than fair market value with the hope of selling them for a profit in the future.”

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