The sprinklers look great in this 90º heat, and the parks aren’t too crowded! My family relaxes in Hoboken on Memorial Day to recuperate from a busy weekend & get ready for the work week. Bonus column at http://patch.com/A-r3j
Each family’s setup means a different stroller will work best for them. For us, the Phil and Teds Vibe w/doubles kit is the closest we can come to perfection. Column at http://patch.com/A-rf2
I have been talking to people who have filed multiple property tax appeals over the years, including the developer I work for, and the general consensus is that the tax appeal process is pretty routine. Almost all of them have been successfuly filing appeals on their own for years, and all of them received settlement letters in the mail in the past.
I have an appraisal on my unit, plus I purchased it in 2009 so I have the actual sale as a comparable. No attorney is going to be able to present a stronger case than that, plus I don’t want to give him/her 33% of my tax savings. I think the data matters a lot more than who is handing it to the assessor. Some people have the time and ability to handle the paperwork and comparables. Others don’t, and that is where an attorney makes a huge difference. Tax appeal software is halfway between the two. My friend who had a hearing last week got about 30% off her tax bill, using just the comparables the software generated for her – no attorney or additional evidence at her appeal hearing.
I am planning to attend my tax appeal hearing, but if I get a settlement offer before then that is 100% what I asked for, I will accept it.
It looks like the City of Hoboken is no longer routinely sending out tax appeal settlement letters the way they did last year. Instead, everyone is receiving hearing notices for court dates, to be held at the Hudson County municipal assessor’s office in Jersey City. I have spoken to two friends who had court dates last week; one called the Hoboken assessor for a settlement offer a couple of days before her hearing (and received one), the other attended her hearing (and discovered her entire building was there at the same time!) and received a substantial decrease to her property tax assessment.
Many more NJ homeowners appealed their taxes in 2010 compared to 2009, although that is still only the tip of the iceberg (I have seen estimates of 10%). While the concept of going to court is extremely intimidating, there are several important facts to keep in mind:
My hearing is in early June. I put together some materials for both my hearing and another one in my building. The details are:
Appeal #1: I purchased my unit in February 2009, so this fell perfectly in the timeframe for this year’s tax appeals (October 2008- October 2009). My initial mortgage appraisal was lower than my purchase price (typical in the current conservative lending environment, and my second appraisal was much higher after I made sure to provide the appraiser with a floorplan and comparable sales) so I provided a copy of that appraisal plus a copy of my property tax record showing my purchase price. I had to contact my mortgage banker to get a copy, but since the sale was so recent, she had it on hand and emailed it to me right away.
Appeal #2: For this appeal, I got a copy of the refi appraisal for another unit in the building with an identical floorplan. I took photos of the unit under appeal to demonstrate that the finishes were the same and that there had been no upgrades. I also provided copies of the two floorplans taken from the master deed.
I hand-delivered copies of the evidence documents to the Hoboken assessor and city clerk, and priority-mailed the third set of documents to the county assessor in Jersey City. DO NOT use Fedex; I sent my initial application to the county assessor via Fedex and it never got there.
I am going to call the Hoboken assessor a couple of days before my court date to see if I can get a settlement offer and save myself a trip to Jersey City. I will still have to go to City Hall to pick up and sign the settlement letter, but that is much better than hiring a babysitter and sitting in court, assuming the amount is decent.
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5/28 Update: Appeal hearing experience in my friend’s own words:
I found the idea of going to the “Hudson County Board of Taxation” a little intimidating.
While several of my neighbors were there at the same time - roughly 8 units … I was the only woman and when it was my turn - I was escorted into a private room with a table of three older men with calculators…
I don’t really intimidate easily but I didn’t know what to expect, what I was suppose to know or if I could have possibly been prepared for this.
The gentleman at the table were very nice. I went in without an attitude, asking them to take it slow because I wasn’t really familiar with the process…
They did. They were patient and answered all my questions.
They did their individual calculations - showing the calculators to each other but not to me. Then One said, “Here’s what we can do.”
They go on to explain that I can accept their offer or appeal it if I think the Tax Board may give me a better deal but of course I know that will involve time and attorney fees.
We were at $728 sq ft (without parking spaces) — the way it was explained to me - for 2011, we got down to $495. sq ft including parking spaces)
I would recommend doing it - if the website calculates a predictable savings.
6/4 Update: I have been hearing back from owners who have received tax decreases ranging from 18%-30%. In the words of one of them:
“We got just about a 30% off settlement on our tax appeal by just using the easytaxfix website’s comparables so thank you for that! If you hadn’t written about how easy a process it was, I doubt we ever would have tried to appeal. The lawyer process seemed so daunting especially with the percentage they take!”
6/22 Update: I have heard back from 13 unit owners, all in South West Hoboken, who have had their appeal hearings. The results are:
Attorney-filed appeals (6 units): 19% average decrease
Negotiated in hearing with county assessor.
Easytaxfix.com (6 units): 24% average decrease
2 units attended the county appeal hearing but received exactly the same settlement offers as identical units in the same building, the other four units accepted settlement offers over the phone with the Hoboken assessor. In two cases the assessment decrease was incremental, with 50% of the drop in 2010 and 100% in 2011.
Self-filed (1 unit): More than 40% decrease
Settlement over the phone with Hoboken assessor.
Picked up railing planters and seedlings at Home Depot. The kids have been having a blast watering “their” plants. Article at http://patch.com/A-qDV
Q. i live in a small condo assoc- and we are self managed. I recently took over as treasurer and handling providing documents for a neighbors sale. they asked for audits for 2 years? we gave them our budget for 2010 but we don’t have audits done- is this a legal requiement? Any insight would be beneficial. thanks.
A. A good friend who is a CPA says:
Audits are not legally required for NJ non-profit corporations with less than $250k in annual revenues.
It is based on the tax exempt certification. If it is 501(c)3 organization, any organization with revenue of $250k or more is required. There are several classifications under 501(c) so it would need to be looked at (some don’t
require audits).
Here are two links that may help.
http://www.njnonprofits.org/ReachUs.html
http://www.grantthornton.com/staticfiles/GTCom/files/Industries/NotForProfit/tax
_alert_2_16.pdf
I have been a condo board member for the last five years, and president for three of them. I have been through a developer lawsuit, a condo association incorporation (that the same developer forgot to complete -oops!), two transitions from the developer, three reserve fund analyses, a roof replacement, a year-long terrace repair project, interviewing six management companies and hiring two of them. When I think condo board, I become instantly exhausted. I also immediately think about masochism.
It never ceases to amaze me how little interest most people have in their condo association’s financials. Reaching quorum on an election is a constant question mark since the overwhelming majority of owners don’t bother to attend association meetings. One of my friends, an otherwise financially savvy person, assumed that her attorney would conduct financial due diligence on the association after she went into contract. Um, not so much.
There are three important things to look for when you buy a condo:
Right off the bat, item #1 is a problem for smaller buildings because it is quite expensive (between $10k-$20k.) That’s a big chunk of change for an eight-unit building, so many small building forgo a transition study. That means they are flying blind into the future. They have no idea whether the roof structures (exhaust fans, HVAC units, etc) were installed properly on solid structures that will not degrade over time (wood versus metal bases) and damage the roof membrane, whether there are sump pumps that need to be serviced twice a year, etc. The key to a properly managed building is to identify small issues and repair them before they become big and expensive to correct. A transition study will also estimate useful life on capital items (ie. the roof), which is the basis for the included reserve fund analysis.
New Jersey requires developers to provide a new home warranty on all new construction properties. A new home warranty has three major limitations:
The logical answer is to quickly get an engineering survey completed and sue the developer, right? Well, that’s not so easy. Litigation is very expensive, easily topping $200k* for an attorney retainer, invasive engineering studies (the burden of proof is on the plaintiff, and the transition study alone is not sufficient), not to mention the board members’ time. And then there is the issue of claiming an award. Developers create a separate LLC for each property they develop, and they immediately distribute the proceeds of each sale. Two or three years after a development has been 100% sold, there are usually no assets left in the original LLC, rendering a legal judgment almost impossible to collect.
That is why I have never bought truly new construction. My last two purchases have been in 1.5 year old buildings with completed transition engineering studies. I didn’t know exactly what to look for the first time, so my building went through an exhausting lawsuit with the developer that culminated in the association receiving $200k in settlement to fix the roof and terraces. I went over the engineering study of my current building with a fine tooth comb to make sure nothing jumped out at me that looked expensive to fix, and once I was satisfied, we went into contract to buy our four-bedroom.
A healthy budget will cover the building’s expenses (water, sewer, electricity, insurance, common area maintenance) and have enough left over for a substantial reserve contribution. I do not adhere to 100% following the transition engineering study reserve schedule because the engineers assume that 100% of capital items will be replaced on schedule. I have never seen a building that had to replace everything; with proper maintenance, the useful life is usually longer than the engineers anticipate, plus association engineers are notoriously conservative to protect themselves from liability. They also tend to establish a high baseline # (ie. reserves never dip below $100k), so make sure you have a good treasurer or management company in place who can run models on various reserve scenarios and the impact on monthly maintenance fees.
Depending on the building’s age, you want to see enough in reserves to fix the building and replace most capital items. Year 10 is when reserve studies call for things to really start to break (coincidentally also the year the new home warranty expires!) In a medium size building (20+ units) that is 6+ years old, I like to see at least $300k in reserves. Roof replacements typically clock in at around $100k, as do building-wide facade/balcony repairs, so you want to have enough on hand to cover major projects like that without having to assess unit owners. Assessments should only happen for unusual large expenses (ie. a hurricane does damage to the roof that isn’t covered by insurance), not for predictable building repairs and replacements.
True, most people in a new condo complex won’t be living in their units 10 years later, so won’t have to pay a special assessment. But I view condo financials the same way as I see personal expenses; if you can easily predict a large expense a long way away, the only prudent thing to do is put away small consistent amounts in anticipation of paying for it.
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*5/29 note: One of the peculiarities of NJ law is that associations suing developers over transition construction issues must bring 100% of the issues to the table immediately. You can’t file suit first for one item and then wait a couple of years to sue for another. It all has to come out at once, or else you forfeit the right to sue for whatever is missed. That makes suing the developer very onerous, time-consuming and expensive. Another issue is that when a building is in litigation, it makes getting a mortgage or refinancing much more difficult and expensive since the pool of available lenders is smaller and requires larger down payments to offset the higher risk to their loans.
Some owners are starting to receive hearing notices about their tax appeals. I emailed Adam Berkson, the founder of easytaxfix.com, for tips on what to bring to a hearing and received the following answer:
“One thing that I would try to do is get the comparable sales that the assessor is going argue. In some cases you can get them by calling the assessor’s office. That way you can poke holes in his argument, just as he/she will of yours.
I have also heard a bunch of examples of settlements at the court house, prior to the hearing which seems weird. Any additional evidence you have (pictures, different comps, appraisals) needs to be submitted 10 days prior to the hearing.
One thing I have been telling people in New Jersey that if there is a significant amount of money at stake (say over $2500) it may be worth getting an appraisal and bringing him to court with you. This will probably cost in the
neighborhood of $500 ($300 for the appraisal, $150 for his/her time) so I do not recommend this until first trying to get a settlement.”
Q. I am thinking of submitting some additional pictures. Does anyone know if they need to be submitted to both Hoboken and JC officials? How many copies etc?
A. To be safe, I would send the photos to the three offices where you mailed the initial application (include your block/lot/unit # so they know which property you are referencing).
The other thing I would do is talk to your neighbors! I know several owners in my building refinanced their units in 2009, and they got appraisals done as part of the refi process. See if they will share those appraisals with you; a comp in your own building is the strongest one possible.
Q. I was wondering if you personally heard anything on your appeal? I have not yet. I will call next week but I thought I would check in with you as the pulse of Hoboken. 
A. I have not heard anything yet about my appeal. Hoboken goes building to building with appeals; my building got reviewed last year in June, and there are a lot more appeals this year so it may be later.
Just because they are growing up in Hoboken, it doesn’t mean my kids can’t be good all-around athletes. Swimming, golf and more at http://patch.com/A-qjB
One of my marketing clients, NJS Holdings in SW Hoboken, is selling a 1,805 three bedroom in the Neapolitan on 2nd & Jackson in southwest Hoboken. The developer retained several units after the initial sale phase on the assumption that they would rise in value after the project’s completion (oops!) One unit is earmarked for sale each year; the one for 2010 is a 1,805 square foot three-bedroom. I have toured the unit and think it is one of the best buys currently on the market. The bedrooms are enormous, all over 250 sf, and there is tons of closet space (the third bedroom has three closets along one wall). The unit comes with a balcony and indoor parking and has nice finishes like beautiful Brazilian cherry hardwood floors, full-size vented washer/dryer, granite kitchen counters and a Travertine marble master bath. The floorplan is quite nice since the second and third bedrooms do not open onto the living room, but there very little space is wasted on hallways.
The cons are that the living room does not get tons of light (there is only one set of double doors leading onto the private balcony), and that the east-facing windows get most of their light from 7AM-1PM. The unit doesn’t show that well because the tenants are three bachelors (college dorm decor). It has been rented for the last three years, but is in excellent shape, and the developer will send in a work crew to whiten the kitchen grout and generally put the unit into pristine condition before the new owner moves in (the tenants are on a month-to-month lease). Nothing in life is perfect, and I don’t think the cons outweigh the pros of this unit. There is also a 10-year new home warranty that has about seven years left to run.
Neapolitan 3C was listed on the MLS at the end of April at $715k, but the developer recently dropped the asking price to $699k to ensure it sells in 2010. Monthly HOA is $420 and the annual property taxes are $11,213 (under appeal, of course!) I have rarely seen Hoboken units this large and nice at this kind of price point; anything under $400 psf is a really good deal.
The building is also financially solid because it is almost 100% sold and has over $100k in reserves. About half the units are large (3BR or 4BR) and are occupied by families with kids who play together in the large landscaped private courtyard. The other half are 1BR and 2BR units, but the building is generally pretty subdued (no wild St. Patrick’s Day parties this year!) The building has Fios and is considering installing a DirectTV dish on the roof to provide centralized access for the entire building.
The floorplan and photos for unit 3C are online at http://bit.ly/3Cneap, it’s worth checking out if you are looking for more space in Hoboken.
