CREJ - Property Management Quarterly - May 2015
Colorado commercial real estate property owners should be aware that the 2015 notices of value are being prepared by Colorado county assessors and will be published by May 1. If you, as an owner, manager or tenant of the property, do not agree with the value the county assigns to your property, you have the option to appeal the value. Upon receipt of the notice of valuation, if you choose to appeal there is a specific form contained in the NOV that can be used. All appeals must be postmarked or received by each county, pursuant to state statute, by June 1, which falls on a Monday. The county then has 30 days to act on the appeal. Understanding how the assessor values property will help in structuring the value appeal. Assessors, by law, look at sales and income approach data that occurred between Jan. 1, 2013, and June 30, 2014, to determine the property’s estimated value as of Jan. 1, 2015. Using a computer-assisted mass appraisal, the assessor files all of the sales data that occurred in the county. It grades the buildings by condition (if you pulled a construction permit, that information is entered as well) and by using a sales-comparison analysis to determine a value for each property. It also develops a cost approach as well as income approach as part of the process of valuing commercial property. To determine if an appeal is necessary, it will be critical to review the value and determine if it is appropriate, based on the actual income and condition of the property valued during the study period. If your property experienced any factors that would negatively impact the value, an appeal should be considered. Once the NOV is reviewed, you will know whether there is a call to action. If there is, the actions taken by the consultant on the client’s behalf, more times than not, save the owner crucial dollars. Keep in mind, proceeding to get the assessed value lowered without use of a consultant is not a simple task. The assessment appeal procedures and deadlines are exacting and complicated. The Colorado law is hundreds of pages backed up by hundreds of pages in the Assessor Reference Library. Submitting an appeal that meets the requirements of the county assessor is not easy. An experienced property tax professional will be familiar with the differences in each county’s appeal procedures. In addition, consultants have a strong understanding of appraisal principles and knowledge of the specific state statutes, and county and Board of Assessment appeal procedures. Moreover, most consultants have relationships with many county staff appraisers. These relationships are an important aspect of an appeal.