Maintaining the right to be heard in a real property tax case can sometimes take a treacherous path. Most people are aware that as a cardinal rule you must file a real property tax appeal before the deadline or the court will not have jurisdiction. A lesser known rule generally is that the owner of the property is the one that must file the appeal. Where a commercial tenant determines to file an appeal pursuant to its rights under its lease, it still must notify the owner of the property of its undertaking and may even have to obtain consent.
In a recent case, however, the Tax Court found that a contract purchaser of commercial property that had timely filed an appeal did not have standing because at the time of the filing of the appeal it was not in fact the property owner. In the recent case of Omega Self Storage of N.J. v. Lawrence Township, the Appellate Division reversed the Tax Court and held that although the Plaintiff contract purchaser had no obligation to pay property taxes as of filing deadline, it would in fact be responsible for taxes assessed to the property for the lien’s share of the tax year and, if its challenge proved true, would have suffered the injury of being unfairly and inappropriately assessed.
Accordingly, the Appellate Division found that where a contract purchaser can prove that it has a substantial interest in the Property, then the Tax Court has jurisdiction to hear the case and the Plaintiff will have standing. This case is instructive in those instances where a Purchaser in performing due diligence determines that the Property has been over assessed and the Seller for whatever reason has determined not to pursue an appeal. This ruling permits a Purchaser to begin to improve the value of the target property by safeguarding its right to have the taxes reduced even before the closing has occurred.
Mark K. Follender is a Partner at Scarinci Hollenbeck and chair of the firm’s Real Property Tax Appeals Group, which represents private commercial property owners and municipalities throughout the State of New Jersey. Feel free to contact Mark Follender, if you would like to discuss your property tax appeal options or have questions about the article above.