Property Tax Appeal Discovery: Establishing The Foundations Of Your Case

This article will cover:

• What is the discovery stage in property tax appeals?
• What can be requested, obtained, and excluded in property tax appeal discovery?
• How you, as a property owner, can request discovery.

What Is Discovery In A Property Tax Appeal?

Discovery is the stage of litigation in which either side can request information from the other.

The three most common forms discovery can take at this stage of your property tax appeal case are:

• Interrogatories – questions you will send, or receive from the other side, that must be answered.
• Notices to Produce – requests for documents that must be provided.
• Depositions – Meetings where individuals (often an expert) will be questioned about the details of the case.

How Do Depositions Work In Property Tax Appeals?

In the property tax field, the most common depositions are of experts. For example, the person who appraised the property for the other side. Your lawyer will send them notice of deposition, meet them, and ask them questions about, for example, their appraisal.

If the case does go to trial, their answers to any questions about the appraisal are now known in advance. If they change their answers, you can ask why and potentially undermine their testimony.

By knowing their answers in advance, you and your lawyer can best prepare your strategy, as well as how to refute the claims they are making.

Why Is Discovery Important In A Property Tax Appeal?

There are two key advantages to a thorough discovery process.

On the one hand, it is vital for you and your legal team to be able to successfully prove your case.  By providing the discovery, you are showing documents that help support your appeal.

Simultaneously, it is essential to receive discovery from the other side because it will help you understand their case and the arguments they are going to make.

Therefore the importance of discovery is twofold. It helps you prove your case and it helps you understand the case that the other side is trying to prove.

What Types Of Information Can Be Obtained Through Discovery In A Property Tax Appeal?

The potential scope of discovery in any field is vast, but the type of information and documents primarily requested during a property tax appeal remains narrow.

Typically, during a property tax appeal, the following documents/information will be exchanged during discovery:

• Leases,
• Income and expense information for the property related to the real estate operation,
• Property information such as the square footage or site plans,
• Property insurance information,
• Prior efforts to sell or lease the property.

While these are the primary documents and information involved, more can be requested depending on the type of property.

What Additional Discovery Items May Be Required Based On The Type Of Property?

For example, if you have an industrial property, discovery may request information about how many docks and bays there are, or how high the ceiling heights are. It all varies by property.

If you have a strip center, the income and expense information and the rent rules will be important.

If you have a property that just has a single tenant, the lease and the expenses are going to be the primary indicators for these cases.

With that being said, they could try to request anything about the property but those are the ones that you most often see and most often are used in proving a property tax appeal case.

What Can Be Excluded In Discovery?

During discovery, some documents can be excluded, though only if they fill certain conditions. In real estate appeal cases, the main type of information excluded is confidential business proprietary information that shouldn’t be made public.  This covers a fairly broad range of possible documents however, so much depends on the company and its practices.

Sometimes leases also have confidentiality clauses in them. That doesn’t mean that the lease is automatically going to be deemed confidential by the court, but there is at least an argument for its exclusion. Individuals or companies might sign a confidentiality agreement, so the information isn’t open to public disclosure at the very least.

Inevitably, irrelevant information can also get excluded during discovery. If a document is not relevant to appraising a property and determining a value for a property (depending on the state) it might get excluded. Though that can also depend on how courts feel about certain pieces of information such as leases for similar properties.

Indeed, because property tax appeal cases are so specific about how you value and appraise property, (unless you have a very different property from the regular residential, retail, or industrial complexes) the documents required are fairly clear.

How Does A Property Owner Request Discovery In A Property Tax Appeal?

In addition to the discovery discussed above (interrogatories, notices to produce, and depositions) appraisal exchanges are another common type of discovery in real estate appeals: getting a municipalities appraisal if it gets to the stages of appraising.

In order to acquire all these different pieces and paths to information, property owners (or more likely, their lawyers) will have to request them through the proper, formal, channels. Others will be acquired by doing due diligence, looking at public records, or online assessment information that municipalities have available.

The first step a competent attorney will do is always find out what they can already access through these online assessments or municipality websites before proceeding to the stage of requesting documentation to determine what is available or not. And if the property has been appraised, getting that appraisal and then considering deposing their expert to get more information about the appraisal.

Discovery is just one of the many stages of a property tax appeal case that you should not, or in all probability, cannot accomplish on your own.

With the guidance of a skilled attorney for Property Tax Cases, you can have the peace of mind of knowing your property case is in the hands of experts.  For more information on Property Tax Law in New Jersey, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (973) 227-1912 today