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Can a Tenant Appeal Property Tax Assessments?

February 21, 2019

Most landlords are proactive in reviewing their property assessments on an annual basis, but not all are willing to file an appeal. It may depend on whether the property is single tenant or multiple tenant, as well as the terms of the lease agreement. So what are your contractual rights as a tenant?

Lease Structure Matters

Owners of single tenant leased properties often have no incentive to appeal assessments since 100% of the property taxes are passed directly to the tenant. However, in a multiple tenant scenario, the tenant’s tax liability may only relate to the pro rata share of operating expenses pertaining to the tenant’s leased premises. The bottom line of the owner stands to be affected so its best for the landlord to control the property tax appeal process for multi-tenant properties.

While some leases do not expressively state your right to appeal, most single tenants have the first rights to challenge property tax assessments they pay annually. A lessee of property obligated to pay taxes during the term of the lease can be considered a “party in interest” and therefore entitled to seek a review of the property tax assessment.

As a tenant, you will need to notify the owner your intentions to appeal since your appeal is made in the name of the property owner on file with the county assessment office. It is recommended that a tenant hire a tax professional with expertise in real estate to help you navigate the appeal process. An appraisal may be required to support your argument that the property is worth less than assessed.

However, the lease terms alone aren’t necessarily decisive. When your right to file an appeal in the landlord’s name is challenged, a court will likely consider several additional factors.

  • The lease duration, the burden of the tax surcharge on the tenant.
  • The tenant’s relationship to the property (lead or minor).
  • Whether the tenant will adequately represent the landlord’s interests.
  • The ability to pursue an effective appeal.

Are you a tenant who needs help starting the appeals process and maneuvering through the regulatory obstacle course? Call your MarksNelson State and Local Tax professional at 816-743-7700 or click the button below to schedule your FREE tax appeal consultation today.

 

About THE AUTHOR
Tim is a key member of the real estate practice area at MarksNelson, leading the real estate valuation, commercial property tax appeal, and market demand studies specialty groups. He partners with clients to secure credits and incentives, provide economic development guidance, and advise on state and... >>> READ MORE

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