5 Ways Property Owners Can Help Their Lawyers to Defend School District Property Tax Appeals
This guide will help Allegheny County property owners understand the 5 ways in which they can help assist their attorneys to defend school district property tax appeals filed in Allegheny County, Pennsylvania.
Step 1: Take Ugly Pictures.A picture says a thousand words, and nowhere is that more true than in real estate. People will buy a house based on an initial picture and a feeling, and will look at that picture many times before closing. The converse is also true. You can make a house look worse than it actually is in pictures. Pictures showing deficiencies can help lower property values and accordingly lower your property taxes. Of course, they have to be the right pictures.
Many new property owners discover issues with a property following the closing that they were not previously aware of. This could be any number of things, from water in the basement to chipping paint that was used to cover a problem area, to poor drainage in the yard. There are all kinds of issues you learn about a house after you move in. To demonstrate these issues, pictures can be extremely helpful evidence at a hearing. They can help even more when accompanied with estimates or invoices showing the cost and necessity to repair.
Typically, in cases where the school district has filed an appeal because of a recent purchase price, it is important that the pictures focus on items that were NOT known at the time of closing. Essentially, if a kitchen is outdated (for example), this is something that would have been obvious to the buyer when the purchase price was agreed upon. (note: I may still include pictures of the outdated kitchen if it was that outdated) - but more ideally, pictures should focus on problems that may have impacted the amount that the prospective buyer would have been willing to pay for a property, and were not obvious when looking at the property, if possible.
Step 2: Identify Problems and Get Estimates of Repair for Both Disclosed and Undisclosed Items.If you were selling the property today, what deficiencies would you have to disclose? It may even be a good idea to review a Seller Disclosure Statement so that you can have a list to work off. The Seller Disclosure Statement has all of the necessary questions you would have to legally answer if the property was listed for sale.
Identify any defects of the property and obtain estimates if possible and take pictures. Many times, home inspectors will fail to identify issues within a home and had that information been disclosed, the property owner may not have paid as much. Again, this should focus first on issues that were unknown at the time of closing but can also focus on defects that would have to be addressed now if the property was selling today. If you bought a home last year, not knowing it needed a new roof, and now it does, that is certainly relevant to market value and should be used as evidence. Getting an estimate does not mean you will need to get the repair done. In fact, the defects that work best are ones that were unknown to the buyer prior to closing and that have not yet been repaired.
Step 3: Don't Forget Closing Costs & Fixtures.Sale agreements can be structured in many ways. If your property purchase was atypical or unusual for any reason, that could be used to help lower the property taxes. Be sure to disclose if any closing costs or chattels were included in the purchase price. These can include seller assist or seller credit at closing, appliances, window dressings, or even certain furniture. These items should be excluded from the purchase price and can have a significant impact on property taxes. If you are not sure, have your lawyer review the closing statement (HUD 1 document) from the sales transaction.
Step 4: Share Your Motivation and Knowledge of What Helps You.Most home buyers are overpaying for properties because of low inventory and high demand. if there is any reason you believe you paid a premium for the property (relocating from out of state for a job, for example), this information should be conveyed to your attorney.
No one will know your own home and neighborhood better than you. If there are unique circumstances about your home, property or neighborhood that harm market value, these need to be presented and shared with your lawyers. These can even include if the house was haunted, or is in a dangerous or violent neighborhood. Perhaps there are loud trains or noises which you were unaware of prior to purchasing. Whatever it may be, do not assume that everyone else is aware of it.
If the sale was a cash deal, or primarily cash deal, where appraisals were not required, that will often result in an inflated sales prices because of the buyer's ability to simply pay more.
Step 5: Don't Volunteer What Hurts You.In terms of assisting your lawyer in preparation of the case, do not volunteer what hurts your case. For example, if the bank had an appraisal supporting the purchase price, you should not share that information with anyone. The appraisal was intended and performed for the bank only, and is not allowed to be shared with anyone else. Certainly, do not volunteer this information to your lawyer or at a hearing unless you have to. Do not volunteer updates or improvements to your property. Do not volunteer refinances after you purchased. All of this information could be used to raise your property taxes.
Property owners who want to assist their lawyer should focus on deficiencies of the property, including pictures, estimates for repairs, and reasons why the buyer paid more than they probably should have on an open market.