COVID-19 Impact on Property Values

05/01/20

While certain municipalities have agreed to extend the deadline to pay real estate taxes, the obligation to ultimatley pay the taxes still exists. This fact is important whether a property owner directly pays his/her real estate taxes or whether the taxes are paid by a mortgage company. In both instances, a property owner has the inevitably concern that he/she is paying an amount of real estate taxes that does not correlate to the true value of the property since market and rental values are anticipated to decrease precipitously.      

While our office has timely filed various requisite tax challenges for our clients, the values we demanded were based upon fair market values which precipitated the onset of the pandemic. Whether your case has already been resolved with the municipality or is pending negotiations, the municipality is not evaluating the true value of your property, as the pandemic&rsquos negative impact was not considered. I would argue that this poses an unfair and unjust burden on property owners, as they are paying real estate taxes which do not reflect the true value of their property caused by an unanticipated and unprecedented situation.      

In order to ascertain how the municipalities will handle this situation, we must consider how disaster situations have been dealt with in the past. After the devastation caused by Superstorm Sandy in 2012,  the State of New York created the Superstorm Sandy Assessment Relief Act in 2013. Under said law, property owners were essentially entitled to a &ldquosecond bite&rdquo of the tax certiorari &ldquoapple,&rdquo and were able to receive additional real estate tax relief. The State acknowledged that without this additional relief, property owners would not be made whole. In particular, the additional tax refunds and/or credits were necessary in order for the amount of real estate taxes that were paid to properly reflect the true value of the properties which sustained damages as a result of the storm.       

At that time, we worked with our clients by filing timely applications and coordinating submission of the necessary information. While this process was complicated, more often than not, the municipality merely required that we submit insurance information only. Success was mixed based upon the completion of, and information contained in, the application however, many of our clients received relief.      

Based on our experience, we anticipate that the Governor and local officials will create similar programs, as municipalities must ensure that real estate taxes truly reflect the value of people&rsquos properties. In that regard, my office is fully prepared for this eventuality and is ready to coordinate these second tax filings on behalf of our clients. Please stay tuned for details of this anticipated program once we become aware of same.      

Please feel free to contact us for a complementary initial consultation. We understand that many of you are going through a very difficult period of time in your lives and we stand ready to assist you in attaining peace of mind, as well as financial stability. Please stay safe and well. We look forward to continue working with you.