CHAPTER 91 NOTICE, A TAX ASSESSOR'S SECRET WEAPON
FAILURE TO RESPOND TO MUNICIPAL NOTICE MAY DOOM TAX APPEAL
As many seasoned property owners may be aware, Municipal Tax Assessors across the State periodically mail out requests for income information to owners of income-producing property pursuant to N.J.S.A. 54:4–34, or more commonly, “Chapter 91.” These requests are officially a tool used by municipal tax assessors in setting local property assessments for the year. Crucially however, they also have the added effect of shielding the Municipality from defending tax appeals should the property owner fail to respond properly.
The Statute provides, in pertinent part:
Every owner of real property of the taxing district shall, on written request of the assessor, made by certified mail, render a full and true account of his name and real property and the income therefrom, in the case of income-producing property, ... and if he shall fail or refuse to respond to the written request of the assessor within 45 days of such request, ... the assessor shall value his property at such amount as he may, from any information in his possession or available to him, reasonably determine to be the full and fair value thereof. No appeal shall be heard from the assessor's valuation and assessment with respect to income-producing property where the owner has failed or refused to respond to such written request for information within 45 days of such request.
It is thus vitally important that all property owners carefully read and respond to these requests within 45 days of receiving them, as failure to respond may result in a motion to dismiss any tax appeal filed on the property the following year.
- If a property is 100% owner-occupied:
An owner could respond by simply stating on the form “100% owner occupied.” The owner could then sign and date the attached forms and deliver to the tax assessor.
- Important Note: Even if the property is generally owner occupied -- If any portion of the property is subject to a formal, or even informal, third-party lease, unrelated to the subject business, no matter how minimal, the property may NOT be considered 100% owner-occupied and the income should be declared on the Chapter 91 response. Common examples of these often overlooked types of leases are: The renting of parking spaces to neighboring properties; billboards; and cell towers.
- If a property is leased to a tenant:
- Appropriate responses include: filling out the attached income/expense forms and rent schedule pursuant to the included instructions; or attaching a copy of the rent rolls, income/expense statements, tax returns, or leases for the requested time period.
Potential Defenses to a Chapter 91 Motion:
Should a property owner fail to respond to a Chapter 91 request, it may still be possible to maintain a tax appeal the following year. The following is a non-exhaustive list of the common defenses should a municipality move to dismiss an appeal for failure to respond:
- Assessor Mistakes:
Pursuant to statute, the Assessor must include with every Chapter 91 request a copy of the relevant statute, describe in clear and unequivocal language the information being sought, and specify the time period for which information is being requested. The municipality must send the Chapter 91 requests by certified mail and it must be addressed to the correct property address, with the correct block and lot.
- Note: If the property was recently sold/purchased, the new property owner must still respond even if the request was addressed to the prior property owner. As long as the request is mailed to the correct address with correct block and lot, the current property owner must respond.
- Late Notice:
- Pursuant to N.J.S.A. 54:4-35, the Assessor is required to submit the final tax list to the County Board of Taxation in the County in which he/she sits by January 10 each year. If the Assessor mailed the Chapter 91 request less than 45 days from January 10, the responses could not possibly be used in setting the assessments for that year. As such, if a Chapter 91 request is received within that 45 day window before January 10, a municipality’s motion to dismiss may be successfully opposed.
These are but a handful of issues associated with Chapter 91 motions. Even if you are currently being represented by counsel or have a pending tax appeal, do not assume that your attorney received a copy or that you are excused from responding. Chapter 91 notices must always be addressed when received.
Waters, McPherson, McNeill P.C. represents clients with these and similar issues on a regular basis.
Disclaimer: This is not intended as legal advice. Please consult us as to the specific facts involving your property if you have any questions concerning the proper course of action.
If you have any questions, please contact:
Robert J. Guanci, Esq. (201) 330-7463
Robert S. Lipschitz, Esq. (201) 330-7455
Joseph G. Ragno, Esq. (201) 330-7465
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