Wednesday, May 27, 2015

How I won my property assessment hearing

When my wife and I received our property tax statement last year, we were disappointed to see a significant jump in the amount we owed. This was because our home's market value had increased, at least in the judgment of the Los Angeles County assessor.

Thanks a lot, Improving Real Estate Market.

Still, it seemed like the assessor had gone too far. The official estimate of our property value was too high, in my opinion. When I looked at comparable sales in our neighborhood "comps," in real estate parlance they seemed to back me up.

The difference in opinion wasn't great the assessor had our house pegged at $596,000, while my research suggested that it should be about $30,000 lower.

I asked the assessor's office to review our account and reduce our assessment. This is a fairly common practice. Property valuation is not an exact science, and the assessor has a county-full of properties to keep an eye on -- they can make mistakes.

I thought my request was a modest one, so I was surprised when I received a mailed notice from the assessor saying the county was sticking with its number.

The next step was to submit an appeal to the Los Angeles County Assessment Appeals Board. At this point, you have a choice: You can go directly before the full board, a rather formal procedure. Or you can have your appeal heard by a "hearing officer" in a more relaxed setting. I chose the latter.

The wheels of government do not spin fast in Los Angeles – it took a good six months from application to actually getting my hearing.

When the fateful day finally arrived, I went to downtown Los Angeles, into the huge Hall of Administration, and down into a windowless hearing room in the basement.

There were about 25 people total in the room. I had wondered if the room would be solemnly quiet like a courtroom, but in fact there was a buzz of multiple conversations going simultaneously.

There were three hearing officers –  the "judges," in effect – sitting at separate tables. Sitting across from each of them was a representative of the assessor's office and a property owner. As new cases were called, the hearing officer and the assessor rep stayed put; property owners came and went.

I checked in with a clerk in the room and sat down to wait –  and watch. While I couldn't hear full conversations from the cases going on, I could pick up enough to get a sense of what was happening.

One man owned a property in Rolling Hills (a wealthier city south of Los Angeles) and in making his case he said, "The only things that matter in Rolling Hills is lot size and view. And I have no view." The assessor rep seemed to challenge that, and the homeowner replied, "Well, sure I have a view of the canyon, but that's not worth anything. It's all about whether you have an ocean view."

I couldn't follow the full back and forth, but it appeared they came to a compromise and the property owner walked away happy.

In a couple cases the assessor rep had an immediate "offer" as soon as the property owner sat down. One man, whose property was assessed somewhere in the $400,000s got an offer in the $200,000s. Not surprisingly, he took it. You gotta wonder how a mis-estimate like that occurs.

The only real contentious moment I saw was at one table where the hearing officer kept telling the property owner that he hadn't met his burden of proof. Apparently, he hadn't brought any comps.

"Sir, you have to bring evidence," she said. "You brought no evidence."

When the owner continued to argue, she said loudly, "Denied! Denied!"

(Even if you are denied by the hearing officer, you can still take your case to the full Assessment Appeals Board.)

Pretty quickly, it was my turn. I stepped forward and sat down. The hearing officer and the assessor's rep introduced themselves. As instructed, I had brought copies of my comps for both of them. I shared those.

The assessor's rep handed me his material, as well. I noticed that two of our three comps were the same.

I got to speak first. I didn't think my case was too complicated so I got right to the point. Looking at the average cost per square feet on my comps, I said, would put out property value at $572,000. Take off another $5,000 because we're in the flight path of an airport, and I said our property should be assessed at $567,000.

I may actually have gone too fast. When I finished, the assessor rep was still thumbing through the materials I had given him. So I restated my point.

He looked at my figures, did a little math and said, basically, "How about $570,000." Deal. I said. It was done.

I was pleased, but I had one more question for the assessor rep. "Will we get a refund mailed to us?"

"Yes," he said. "But don't hold your breath."


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