Tenants’ Rights to Appeal Real Property Tax Assessments on Leased Space

Real Estate

Tenants’ Rights to Appeal Real Property Tax Assessments on Leased Space

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As we  move to the end of 2017, new real estate property values will come out in many jurisdictions based on a January 1, 2018 lien date.  An owner of a property always has the right to contest the assessed value.  What are the rights of a tenant?

In most cases, the landlord will pass these costs directly to the tenant. The rights maintained in a lease will usually state if a tenant has the right to appeal the value of the assessment on a building it leases.  Even though it is stated, a tenant is wise to communicate with the landlord and make sure the landlord supports the appeal, as the landlord might be commencing a protest.  If two appeals are filed, one by the landlord and one by the tenant, one would be removed and that would typically be the tenant’s appeal.

If the lease is silent and does not state whether a tenant has the right to appeal, the tenant should seek the landlord’s permission in writing so there is no misunderstanding.  Without receiving the landlord’s permission, an appeal board can and has within its discretion the right to dismiss the appeal for lack of standing.  Note that the opportunity to appeal is typically only relevant to a tenant who occupies a single-tenant building, as a tenant in a multi-tenant building would not have enough information for an appeal.

With a new year of values coming out soon, and tenants looking to lower costs, property tax expense could be one area that savings can be achieved.  Please reach out to a member of Withum’s Real Estate Services Group to determine if you have the right to appeal. We are happy to review the assessment and determine if you should contact your landlord about the possibility of filing an appeal.

For more information or to contact one of our Real Estate Services team member, please fill out the form below.

Ask Our Experts

Rebecca Machinga, CPA, CGMA, Practice Leader of the Real Estate Services Group
609-520-1188
[email protected]

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To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

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