Protesting Property Tax Valuations: Reasons to Protest

Previously this Blog has discussed the Key Dates and Deadlines to remember for 2020 when protesting property valuations, and the process of protesting property valuations. This post will explore the reasons to protest the county’s assessed valuation of your property and considerations to make when deciding whether your property has been overvalued.

Property valuations are a local government’s way of determining the amount of the following year’s property taxes on an individual’s real property. A lower valuation generally means lower property taxes, while the opposite is true for higher valuations and taxes. A valuation should accurately reflect current market value and should be comparable with other similarly situated properties in the area.

There are several ways a property owner can prove or find evidence and support of the current property value of their real property. A recent sale can help prove current value, or alternatively a property owner can research sales for comparable properties. Property owners can check their county of residence’s property records, and also research assessed valuations for similar properties.

Once you have proven a valuation of your property, there may be numerous reasons why the county’s assessed valuations on your property are wrong. Below are just a few examples of scenarios in which a property valuation may be overvalued by the county and need to be protested:

• Real property may be overvalued when it is damaged, such as a cracked foundation or a damaged roof, and not be included in county’s valuation.
• Real property may be overvalued if the county makes a mistake and miscalculates the square footage of a building.
• Real property may be overvalued if it sits on the market too long and is at a price different than the county’s previous valuation.
• Office buildings may be overvalued if there is less leasable space than the county’s records show.
• Office Buildings or Multi-Family Properties may be overvalued because the county compares them other similar buildings, but does not take into consideration that the overvalued building may be equipped for less tenants than the buildings compared against.
• Multi-Family or Commercial Hospitality Properties may be overvalued because the county miscalculated the valuations when considering income, expenses, and vacancy rates of the buildings.

If you have property that you believe has been overvalued, you should take a few steps before filing a protest with the county during the protest time period each year. First, as mentioned above, gather information about your real property, to see if a protest of the assessed value is warranted.

• Verify information such as the dimensions, square footage, age, and condition of structures on your property.
• Research the assessed valuations of properties in the area around your own property.
• Monitor the real estate market to see what houses in your area are selling for.

If, after doing your research you conclude the assessed valuation is overvalued, set up an informal discussion with the county assessor to attempt to resolve the issue with your property. The county assessor should be able to explain to you the assessed value of your property, answer questions you have, and review additional information you can provide. If the issue is not resolved after discussions with the county assessor, then consider the formal protest process with your respective county’s Board of Equalization.

The property tax valuation protest process at times can be complex and daunting. Attorneys at Vandenack Weaver can assist you at any step of the protest process and help identify why the county’s valuation is wrong and help you, the property owner, save money on property taxes for the upcoming tax year.

VW Contributor: Ryan Coufal
© 2019 Vandenack Weaver LLC
For more information, Contact Us

Property Tax Valuation Protest Process

Previously this Blog discussed the Key Dates and Deadlines to remember for 2020 when protesting property tax valuations. To build upon that, this Blog Post Entry will discuss the actual Property Tax Valuation Protest Process itself. Just as it is important to remember the deadlines for protesting property tax valuations, it is important to understand the process in how to protest the valuations.

Under Nebraska Statute, all real property subject to taxation shall be assessed by the County Assessor as of January 1st at 12:01 a.m. and be used as a basis of taxation until the next assessment unless the property is destroyed, and the County Assessor is required to complete this assessment by either March 19th or 25th depending on whether the county in which you reside has under or over one hundred and fifty thousand residents (150,000), respectively. Then, on or before June 1st the County Assessor is required to notify the owner of record of the property as of May 20, of every item of real property that is assessed at a value different than the previous year. That notice shall be given by first-class mail addressed to the owner’s last known address, and must identify the item of real property, state the old and new valuation, the date of convening of the county board of equalization, and the dates for filing a protest.

When you, as a property owner, receive notice of a change in your property tax valuation and you disagree with that valuation, or you disagree with a previous year’s valuation, you may file a written protest with your County Board of Equalization. The deadline to do so is June 30th. Each protest must be filed with the county clerk of the county in which the property is assessed. The protest must also:

• Be signed by the property owner, or a person authorized to protest on behalf of the owner, and indicate such
• Contain, or have attached, a statement the reasons why a change to the county’s valuation should be made
• Contain a description of the protested property.
o If real property, a description of each parcel protested shall be included.
o If tangible personal property, a physical description of the property shall be included

It is vitally important that these requirements be met when submitting a written protest, or the County Board of Equalization will dismiss the protest. Only in the event of the person signing the protest not being the property owner or an authorized person, will the county clerk mail a copy of the owner of the property and notify them.

The County Board of Equalization will meet for the purpose of reviewing, conducting hearings, and deciding upon written protests from June 1st through July 25th of each year. If the county has a population greater than one hundred and fifty thousand (>150,000), they may extend the deadline of hearings through August 10th. The County Board of Equalization shall fairly and impartially equalize the values of all items of real property so that all real property is assessed uniformly and proportionately.

If, after the decision of a County Board of Equalization, a property owner is not satisfied with the decision of the Board, they may file an appeal with the Tax Equalization and Review Commission (TERC). The TERC consists of three commissioners, with each being from one of the federal congressional districts and appointed by the Governor with approval of a majority of the Nebraska Legislature. Appeals must be made by August 24th, or September 10th if the county adopted a resolution extending the deadline for the hearings to August 10th. At an appeal hearing before the TERC, a property owner will be afforded to present evidence and argue their case in an evidentiary hearing setting. The property owner on appeal must provide evidence that the County Board of Equalization’s decision was incorrect, or it was unreasonable or arbitrary. The burden is on the property owner to rebut the presumption that the County Board of Equalization failed to faithfully perform their duties.

If, after a decision of the TERC, a property owner is still not satisfied with the decision, they may appeal the TERC’s decision to the Nebraska Court of Appeals, subjecting themselves to Nebraska judiciary rules and statutes. However, the Court of Appeals will have limited scope to only reviewing errors on the record before the TERC.

The property tax valuation protest process at times can be complex and daunting. Attorneys at Vandenack Weaver can assist you at any step of the protest process and help identify why the county’s valuation is wrong and help you, the property owner, save money on property taxes for the upcoming tax year.

VW Contributor: Ryan Coufal
© 2019 Vandenack Weaver LLC
For more information, Contact Us

Protesting Property Tax Valuations: Key Dates and Deadlines to Keep in Mind for 2020

Tis the season for holiday joy and cheer, but with all the hustle and bustle of November and December comes the new year and the start to tax and property valuation season. Don’t let this tax season “fly by” when it comes to knowing your rights to protest property valuations, and more importantly don’t miss the important deadline dates for when you can protest. So as you enter this busy time of year and count down the days to the end of the year and the start of 2020, please keep in mind the key dates and deadlines for protesting your property tax valuation.

• January 1, 2020: Under Nebraska Statute all real property subject to taxation shall be assessed as of January 1 at 12:01 a.m. and used as a basis of taxation until the next assessment unless the property is destroyed.
• January 15, 2020: If own real property in a county with a population of at least one hundred and fifty thousand (>150,000) inhabitants according to the most recent census, the County Assessor is required to provided you notice of a preliminary valuation of your real property by January 15th of each year. Notice will either be mailed directly to you or published on the County or County Assessor’s website.
• March 19, 2020: If you own real property in a county with a population less than one hundred and fifty thousand (<150,000) inhabitants according to the most recent census, the County Assessor is required to complete the valuation assessment for your real property by March 19 of each year.
• March 25, 2020: If you own real property in a county with a population of at least one hundred and fifty thousand (<150,000) inhabitants according to the most recent census, the County Assessor is required to complete the valuation assessment for your real property by March 25 of each year.

Immediately upon completion of the valuation assessments, the County Assessor must publish in a newspaper of general circulation in the county that an assessment roll is complete and that notices of valuation changes have been mailed and identify the final date for filing valuation protests.

• June 1, 2020: Under Nebraska Statute the County Assessor is required to notify the owner of record as of May 20, 2020, of every item of real property which has been assessed at a value different than the previous year. Such notice shall be given by first-class mail addressed to the owner’s last known address, and the notice will identify the item of real property, state the old and new valuation, the date of convening of the county board of equalization, and the dates for filing a protest.
• June 1, 2020: Property Tax Valuation Assessment Protests can start being filed with the County Board of Equalization. Such protests regarding personal property must be signed and filed on or before June 30, 2020.
• June 1, 2020: Property Tax Valuation Assessment Protests may start being heard by the County Board of Equalization or an appointed referee. Such hearings can be held up to July 25, 2020 unless the county has a population of at least one hundred and fifty thousand (>150,000) inhabitants according to the most recent census, then the county may extend the deadline of hearings to August 10, 2020.
• June 6, 2020: The County Assessor must annually post in their office, and as designated by the county board, mail to a newspaper of general circulation and to licensed broadcast media in the county the assessment ratios as found in his or her county as determined by the Tax Equalization and Review Commission.
• June 30, 2020: This is the deadline to sign and file a Property Tax Valuation Assessment Protest. This is a hard deadline, protests mailed via U.S. mail must be postmarked by this date.
• July 25, 2020: This is the last day hearings may be heard by the County Board of Equalization or an appointed referee, unless the county has a population of at least one hundred and fifty thousand (>150,000) inhabitants according to the most recent census and extended the deadline of hearings to August 10, 2020.
• August 2, 2020: The County Board of Equalization are required to notify owners of the results of their protests by this date, unless the county has a population of at least one hundred and fifty thousand (>150,000) inhabitants according to the most recent census, then the county has until August 18, 2020 to notify owners of the results.
• August 10, 2020: This is the last date the County Board of Equalization can conduct protest hearings if the county has a population of at least one hundred and fifty thousand (>150,000) inhabitants according to the most recent census and elected to extend the deadline.
• August 18, 2020: If the County Board of Equalization hearings were extended to August 10, 2020, this is the date the Board is required to notify owners of the results of their protest.
• August 24, 2020: This is the deadline to appeal any action taken by the County Board of Equalization to the Tax Equalization and Review Commission if the deadline date to send you the results of your protest was August 2, 2020.
• September 10, 2020: This is the deadline to appeal any action taken by the County Board of Equalization to the Tax Equalization and Review Commission if the deadline date to send you the results of your protest was August 24, 2020.

The dates provided above are the deadlines provided by Nebraska Statute. Different counties may have different procedures and processes for the protest’s hearings, and it is important to know those process requirements as well.

Attorneys at Vandenack Weaver can assist you at any step of the protest process and help identify why the county’s valuation is wrong and help you, the property owner, save money on property taxes for the upcoming tax year.

VW Contributor: Ryan Coufal
© 2019 Vandenack Weaver LLC
For more information, Contact Us

Buyers Beware: Buying Real Estate Subject to Unpaid IRS Taxes

When purchasing real estate, it is important to be diligent in whether the seller owes unpaid taxes to the IRS.  In certain situations, the IRS can collect prior owner’s taxes from you the buyer of the real estate, even though the seller incurred those taxes.  A recent United States District Court, District of Nevada demonstrates this issue.

In the case of Shirehampton Drive Trust v. JP Morgan Chase Bank, No. 2:16-cv-02276 (D. Nev. 2019), the owner obtained a mortgage to purchase real estate property.  The owner later fell behind and failed to pay their monthly homeowner’s association (HOA) dues, and the HOA recorded a notice of delinquent assessment lien on the property.  The HOA then foreclosed on the property.  Shirehampton Drive Trust (Shirehampton), the plaintiff, purchased the property from the foreclosure sale and sued JP Morgan Chase Bank (the bank) to quiet title to the real property, and the bank filed a counter claim on the same grounds.  The IRS became involved as well and removed the case to Federal Court, filing a claim of its own on the grounds that the previous owner had outstanding unpaid Federal taxes.

Federal IRS Tax Liens arise by an operation of law when taxes are assessed.  Once the IRS records the tax debt, it has an interest in the taxpayer’s property, which generally includes real estate.  The IRS lien is generally made in the local county records and must be recorded to generally be valid.

The issue hung on which lien was superior, the IRS or the HOA lien.  Generally, the “first in time, first in right” rule applies, looking to the timing of when the liens were filed.  Shirehampton argued that the HOA lien was superior and thus they purchased the lien clear of the IRS Federal Tax Lien.  The IRS argued the HOA lien wasn’t perfected before the Federal Tax Lien, as under Nevada state law, the HOA lien would not be perfected until after notice was sent to the owner of the delinquent assessment.  The US District Court for the State of Nevada ruled for the IRS in that the IRS lien filed on May 1, 2009 was before the date the delinquent assessment was sent to the prior owner on July 24, 2009, even though the owner became delinquent of the HOA dues on March 1, 2009.  As notice of the lien was not perfected in being sent to the previous property owner, the IRS’ lien was superior.  Thus, Shirehampton purchased the property subject to the IRS’ lien and had to pay those unpaid taxes of the previous owner.

When dealing with tax issues and liens when buying property it is important to consult a tax attorney that can help you understand the consequences of liens encumbering the property, and not end up paying the unpaid taxes of the previous owner!

VW Contributor: Ryan Coufal
© 2019 Vandenack Weaver LLC
For more information, Contact Us

Business Entities as Parties to Real Estate Transactions: Who Has Authority?

Business entities buy and sell real estate on a regular basis. A successful transaction hinges, in part, on the proper parties executing the requisite documents. Because failing to correctly identify the parties and obtain proper signatures can be fatal to any real estate transaction, understanding who has authority to sign, on behalf of the entity, is imperative.

Four types of business entities are commonly involved in real estate transactions: (1) general partnerships; (2) limited partnerships; (3) limited liability companies; and (4) corporations.

A general partnership is an association of two or more persons to carry on as co-owners a business for profit. Formation of a partnership does not require a filing with the State, nor does it require a partnership agreement. As such, any conveyancing documents must clearly identify whether partnership property, versus non-partnership property, is being sold. In general, all partners should sign the conveyancing document to sell partnership property. However, a Statement of Authority may be voluntarily filed with the Secretary of State, granting specific partner(s) express authority to solely dispose of partnership property. Unlike the general partnership, a limited partnership (“LP”) is registered with the Secretary of State and is comprised of one or more general partners and one or more limited partners. Like the general partnership, a limited partnership may be governed by a partnership agreement. To convey real property, a deed must be executed by all general partners, unless a duly executed and authorized partnership agreement or Statement of Authority provides otherwise.

A limited liability company (“LLC”) is either member-managed or manager-managed and is created by filing a Certificate of Organization with the Secretary of State. The entity is governed by an operating agreement, which is not filed. Unless the operating agreement dictates otherwise, consent is typically required by all managers (if manager-managed) or members (if member-managed) to transfer real property outside the ordinary course of business. A duly executed and authorized Statement of Authority can be filed with the Secretary of State to supersede the signing authority as designated in the operating agreement. As such, be sure to confirm that the Statement of Authority is executed by all members or managers, depending on the LLC management structure.

A corporation is a legal entity that is owned by shareholders and operated by the Board of Directors. Articles of Incorporation must be filed with the Secretary of State to create a corporation. The corporation’s affairs are governed by its bylaws. If the corporate president does not have authority to transfer real estate, corporate disposition of property is generally a two-step process. The Board of Directors, as dictated by the bylaws, must consent to the transaction, and upon consent, the Board must pass a resolution that authorizes the transaction and designates the authorized signatory.

Early review of the relevant entity documents is key, if not crucial, to ensuring the proper parties are named and have executing authority in any real estate transaction. This simple, but fundamental, step can certainly facilitate not only a timely and efficient real estate closing, but also a successful transaction.

© 2018 Vandenack Weaver LLC
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Increasing Risk of Wire Fraud in Real Estate Transactions

On a national level, and with growing prevalence in Omaha, Nebraska, real estate professionals are reporting increased instances of wire fraud scams in real estate transactions. The scams are hitting both residential and commercial real estate transactions, but are becoming especially pernicious in commercial real estate, resulting in millions of dollars wired to the wrong account.

 

The scams, generally, result from an email account or a real estate broker database being hacked, where the scammer learns about the transaction, and then sends last minute fraudulent wire transfer instructions that look real because of the details. Often, the fraudulent instructions will include a middle-man, such as a real estate professional, attorney, or title company receiving the wire instructions and forwarding those instructions to the financial institution. By using the intervening party, the fraudulent instructions look genuine to the financial institution.

 

For all individuals and entities involved in real estate transactions, the safest approach is using secure email services, especially when sending wire instructions. However, if secure email services are not used, warning signs include last minute changes to the wire instruction, erroneous email addresses, or a change to an overseas financial institution. If any of these red flags arise, the wire instructions should be verified with the originating party.

© 2017 Vandenack Weaver LLC
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Updates Made to Nebraska Homestead Exemption Information Guide

By Joshua A. Diveley.

The Nebraska Department of Revenue (NDOR) has updated its information guide regarding the Nebraska property tax homestead exemption. The homestead exemption provides property tax relief to certain homeowners by exempting from tax all or a portion of the taxable value of the taxpayer’s residence. The homestead exemption is available to persons over the age of 65, qualified disabled individuals and qualified disabled veterans and their widow(er)s. Specifically, revisions were made in the disabled veterans category to remove the requirement, effective for periods prior to January 1, 2015, that a veteran had to serve during a recognized war of the United States to be an eligible disabled veteran. Effective January 1, 2015, military service during peace is sufficient to qualify as a disabled veteran.

The homestead exemption form must be filed with the county assessor by June 30, 2015.

The updated homestead exemption information guide may be viewed on the NDOR’s website at: http://www.revenue.nebraska.gov/info/96-299.pdf. Release, Nebraska Department of Revenue, February 9, 2015

© 2015 Houghton Vandenack Williams

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