All Entries Tagged With: "appeal"
County Assessment-Value Appeal
Note about the Assessment Appeal process and County Property Tax procedures
In each county the County Assessor is charged with providing an assessment value for each property. You should understand that the State Board of Equalization (SBE) oversees the administration of the Property Taxes Law Guide for each county. Audits are performed by the SBE regularly in all California Counties to assure compliance. But to receive their maximum share of property tax revenues, counties only have to comply with a percentage of SBE requirements. That means that from county to county the rule of law can be significantly different. For this reason the presentation here is of a general nature and could vary significantly in specific county appeals hearings.
California real and personal property is assessed annually by the Assessor in each county, who then provides the assessment roll to the Tax Collector who prepares the bill to collect the property tax.
When the county assessment for a real property is not correct, and trying to achieve a satisfactory adjustment from the County Assessor fails, there is but one alternative:
California Property Tax Assessment Appeal
In most counties the Assessment Appeal Board is appointed by the County Supervisor to serve a certain term. The appointments can be filled by individuals with real estate or appraisal experience but is many times made up of the spouse of a contributor who has little understanding of real estate or appraisal procedure.
The County Assessment Appeals Board generally had 3 members; however, they may serve with only two if no objection is made. The meeting chambers consist of vastly different settings by county; some meet in the formal Supervisors chambers which is like a courtroom, while others are informal and meet in normal offices. In some counties the County Counsel (attorney) upholds the value in the County case and in others, the Assessor appoints one of the County appraisers to represent the Assessors side.
The normal Assessment Appeal hearing is much like a courtroom scene: the Assessors Representative (AR) is the prosecutor wishing to prove his value correct. The county property tax payer presents his case first, depending on the property and value, and then defends against the questions of the AR, as well as answers questions from the board. The AR then presents his case, after which he defends questions from the property tax payer and the Assessment Appeals Board. Both sides are then given time for closing arguments. The board at that time either makes a determination or takes the matter under submission, sending letters to the parties generally within a week.
Once the Assessment Appeal Board makes a value determination it is generally the end of the process. The only other option is a further appeal in Superior Court with the obvious complications and legal expenses. Generally, only extremely complicated, high dollar cases are appealed at this level. Seek counsel early if you anticipate going this route.
Go to COUNTY PROPERTY TAX APPEAL ACTUAL CASE STUDY
Go to URGENT MESSAGE FOR COMMERCIAL PROPERTY OWNERS 2009
Go to CALIFORNIA PROPERTY TAX FREQUENTLY ASKED QUESTIONS (FAQS)
To speak with one of our Consultants you may call (909) 867-5000 or (888) 678-9TAX. If you prefer, simply fill out the form below and we will contact you at your convenience. Deadlines vary by county, but for most counties it is November 30. Our costs and fee structure is simple: No Savings, No fee! But act now; once deadlines pass you have lost your right to appeal. Do not allow this opportunity to pass without beginning the process. Please call or write today.
California Commercial Property Tax Retail
The following is an actual L.A. County Assessment Appeal case presented before the appeal board in April of 2000, for a 1998 appeal. Certain information has been with held or changed.
APPEAL #98-xxxx
April 6, 2000
APN: 6271-xxxx
USE: Strip Center
LOCATION: Bellflower
AREA: 17,192 Square Feet
The subject property is located at xxx Boulevard in Bellflower. Consisting of several buildings on 4 parcels the property has tenants suited for a small strip mall. The property was purchased for $2,200,000.
At the time of purchase most tenants were in the middle of leases signed at the height of the real estate boom in 1989 and 1990. Those leases are now expiring. Replacement tenants are not paying nearly as much and vacant space continues to be a problem…
MARKET APPROACH TO VALUE
Two comparable property sales were located within several miles of the subject area occurring during the time of this valuation. A detail of the characteristics of the comparable properties follows this chart:
ADDRESS DATE PRICE $/SQFT SQ.FT. LOT CAP Units
SUBJECT 01/98 $2,300,000+/- $133 17,231 47,575 15
COMP #1
Located just north of the subject on the same street, the strip Center was built in 1987 and sold in January 1998 for $580,000. The comparable has 7,520 square feet of improvement space on an 18,295 sq. ft. lot….
COMP #2
Located approximately 5 miles south of the subject this comparable was built in 1989 of concrete block covered in stucco. Sold in August of 1997 for ….
Using these comparables we have sales prices ranging from $71 to $77 per square foot. We have chosen the average of $74 per square foot as fair market value for the 1998 lien date.
1/98 FAIR MARKET VALUE VIA THE MARKET APPROACH
$74 X 17231 SQ.FT. = $1,275,094
1998 FAIR MARKET VALUE VIA
THE MARKET APPROACH $1,300,000
INCOME APPROACH TO VALUE
Rents for commercial property in the area are shown below:
ADDRESS YEAR PROXIMETY SQ.FT. $/SQ.FT. NET/GROSS
1) 15737 Bellflower 1989 1 Miles North 1400 $1.20 Gross
2) Subject 1990 1991 $1.21 Gross
As is shown above, rents were in the range of 1.20 to 1.21 per square foot gross. For the purpose of our value determination we have used $ 1.20/sq.ft. as economic rent….
17,231 Sq.Ft. X 1.20 = $20,677 X 12 =$248,126
$248,126
VACANCY 13% -32,256
215,870
EXPENSES 25% -53,967
NET INCOME $161,902
CAP RATE 11.0
$161,902 \ 11.0 = $1,471,841
1/98 FAIR MARKET VALUE VIA THE
INCOME APPROACH $1,475,000
RECONCILIATION
MARKET APPROACH $1,300,000
INCOME APPROACH $1,475,000
FULL CASH VALUE $1,475,000
California Commercial Property Type Office
Below is an actual Assessment Appeals Board Case presented in Los Angeles County in March of 2000 for a 1998 appeal. Certain information has been removed.
Appeal #98-xxxxx
March 14, 2000
APN: 2163-xxx-xxx
ADDRESS: xxx Ventura Blvd.
CITY: Tarzana
USE: Stores & Offices (Strip Mall)
SUBJECT
The Subject consists of a four unit strip mall located on Ventura Blvd. in Tarzana. Built in 1985 it has 11,720 square feet on a single story.
The site upon which the property is situated is ill-suited for this type of property. Measuring 75′ X 182′ it has only 75 feet of frontage on the street and is deep back off the street. This functional obsolescence has made renting the property difficult. In 1997 and most of 1998 there was only one unit rented for $1,750 per month. ‘97 income was only $21,000 and ‘98 was 27,034.
COMPARABLE PROPERTY SALES
The following sales have been recorded in the time period of this valuation:
Comp #1
This comparable sold in October of 1996 for $550,000 and is located approximately 5 miles….
Comp #2
Located approximately 1 mile from the subject this comp sold in February of 1998 for $528,000 and was ….
Comp #3
This comparable sold in September of 1996 at a Trustees Sale and is listed solely for….
ADJUSTMENTS
ADJUSTMENT COMP#1 COMP#2 COMP#3
Site -25% -25% -25%
Size -20% -25%
Total Adjustments -25% -45% -50%
INCOME
The subject had ‘97 income of $21,000 and ‘98 was 27,034. Using even the higher income and actual expenses of $7139 yields capitalized income of only $19,895…..
RECONCILIATION
As shown above values in the subject area after adjustment range from $59 to $65 per square foot. We have chosen $60 per square foot as fair market value as of the 1/98 lien date.
11,720 Square feet X $60 = $703,200
Market Approach $735,000
Income Approach $675,000
1/98 Fair Market Value = $700,000
