1. Important Property Valuation Legal Developments: 2008-2009
Presented by:
Elliott B. Pollack
November 11, 2009
© 2009 PULLMAN & COMLEY, LLC

2. IRS Appraiser Penalties – A New Challenge for the Profession
2006 Pension Protection Act
Penalties for substantial or gross over‑valuation
Use in connection with a tax return or refund the claim
10% of improper underpayment of tax attributable to appraisal misstatement
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3. Valuation of Residential Community
19 individual residential properties in private vacation community
Parking lot, tennis court and lake shoreline owned by home owners' association
Homeowners' use and enjoyment easements available exclusively to them
No independent market value to common areas
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4. Valuation of Residential Community (continued)
Market value had been "effectively transferred to the lot owners"
Individual property assessments should reflect value enhancement from exclusive common area easements
Breezy Knoll Association, Inc. v. Town of Morris, 286 Conn. 766
(2008)
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5. Assemblage Valuation – Tax
Three separate contiguous assessment parcels
Is there a reasonable probability that the parcels can be used and developed together for a "prospective integrated use ?”
Proper to combine the three parcels to determine their individual values
Sakon v. Town of Glastonbury, 111 Conn. App. 242 (2008)
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6. Open Space Assessment
Griswold Airport purchased for large scale residential development
Existing open space classification
No change in use even though zoning changed -- and value increased sharply
Open space classification remains until new use is "physically implemented"
Griswold Airport, Inc. v. Town of Madison, 298 Conn. 723
(2008)
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7. "Major" Personal Property Appeal
Lawyer subleases office space with right to use minimal office equipment
No personal property declaration filed
Bridgeport assessor completes declaration for him and adds 25% penalty!
Assessor's "value" of $11,719 reduced to $60, the depreciated value of the attorney's telephone, printer and fax machine
Vaccaro v. City of Bridgeport, Superior Court, Fairfield Judicial District
(2008)
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8. Aftermath of Equity Office's Stamford Property Coup
10 parcels
Sold for $850 million/deeds recorded August 2, 2007
October 1, 2007 revaluation
Two count complaint: overvaluation and "manifestly excessive" valuation
City: How could value be "manifestly excessive" if virtually identical to sale price two months earlier?
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9. Aftermath of Equity Office's Stamford Property Coup (continued)
Owner: Bulk sale/"values" allocated by parties
Is the purchase price, by itself, sufficient to establish the fair market value of the property – especially when Stamford has not indicated how it arrived at its value?
Did assessor use incorrect valuation method? Irrelevant!
More than just a potential valuation error must be shown by the property owner
Definition of "manifestly excessive"
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10. Aftermath of Equity Office's Stamford Property Coup (continued)
Should claim be dismissed for this reason before trial?
Plaintiff provided no evidence that valuation "was so wide of the mark as to be clearly or obviously excessive"
Is use of sale price alone as basis for revaluation illegal?
The "84 Century Limited Partnership" statute
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11. Aftermath of Equity Office's Stamford Property Coup (continued)
Applies only to mid-cycle changes – not to revaluation years
City can conduct sequential revaluations unless some "nefarious" behavior is shown
One Stamford Plaza Owner, LLC v. City of Stamford, Stamford
Superior Court (2009)
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12. October 1, 2009 Revaluations
22 communities (impact of depressed market conditions on new values?)
Few large communities on the list
Bloomfield
Branford
Brooklyn
Canterbury
Coventry
Mansfield
Morris
New Fairfield
Old Lyme
Pomfret
Somers
Sprague
Stratford
Thompson
Tolland
Woodbridge
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13. Pilot Program 2009 Public Act 236 Single municipality
New classifications:
Land exclusive of buildings
Buildings and land
Different tax rate for the two categories – higher tax rate to apply to land only
Approval mechanisms
City of New London
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14. Changes in Assessment Law
Boards of Assessment Appeals may now refuse to hear appeals of any property with assessment of $1+million – formerly $500,000
Income and expense reports may be demanded by assessors for any rental property whether or not community is conducting a revaluation
Definition of rental property?
Right to audit
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15. Bridgeport Hartford Stamford White Plains
Elliott B. Pollack, Esq. Pullman & Comley, LLC 90 State House Square Hartford, Connecticut (860)
Bridgeport
Hartford
Stamford
White Plains
© 2009 PULLMAN & COMLEY, LLC