Property Tax Appeals: Should You File a VAB Petition or Go Straight to Court?


Property owners who would like to appeal their property tax assessments are faced with two choices in Florida – they can file a petition to the county value adjustment board or they can file a lawsuit in circuit court.  Some attorneys contend that filing a VAB petition is a waste of time as the deck is stacked against the petitioner in those proceedings.  I disagree, and think that there are pros and cons to both venues.  This post will summarize the benefits of filing a VAB petition versus the benefits of going straight to circuit court.

Benefits of Filng a VAB Petition

1.  Limited Discovery Available to Property Appraiser.  In a circuit court action, both parties have the right to obtain documents from the other side, and to question the opposing parties under oath through written Interrogatories or in a deposition before a court reporter.  In a VAB proceeding, however, the Property Appraiser is at a distinct disadvantage in that, while the Property Appraiser’s documents are public records that must be made available upon request, the property owner need not disclose any documents other than the documents they intend to use as evidence.  While the Property Appraisers technically have statutory authority to obtain a subpoena for the production of taxpayer records, this mechanism is rarely used, except for very large taxpayers.  On the other hand, in a lawsuit, both parties have the ability to obtain documents from each other, including documents that the property owner may not want to produce.

2.  Value Disputes Heard by Appraisers.  If your dispute is solely a dispute over appraisal methodology and does not involve any complex legal issues, the VAB can be a good choice of venue, as value disputes in larger counties are heard by licensed appraisers, as opposed to judges, who may have very little knowledge of appraisal theories and concepts.

3.  Attorneys Not Required.  Normally, corporations, LLC and other such entities must be represented by an attorney.  However, in VAB proceedings, taxpayers are allowed to be represented by an unlicensed agent if they desire.  Please note, however, that testimony at a VAB hearing is recorded and may be used against you in a later court case.  Thus, if you think there is any chance that you might want to take the case to court, it would be advisable to be represented by counsel at your VAB hearing.

4.  Lower Costs.  The fee for filing a VAB petition is much lower than the cost of filing a circuit court action.  Also, for those who desire legal counsel, most attorneys will handle VAB petitions on a flat fee or contingent fee basis.

Benefits of Filing a Circuit Court Action

1.  Power to Subpoena Witnesses.  One of the most important benefits of a circuit court action is that, in a court proceeding, your attorney can subpoena witnesses to testify on your behalf and can depose adverse witnesses prior to trial.  Thus, testimony and evidence that may be unobtainable in a VAB proceeding can sometimes by compelled in a court proceeding.

2.  More Preparation Time.  In a VAB proceeding, the Clerk is only required to give you 25 days’ notice of the hearing and, in many smaller counties, the hearings are held very soon after the deadline for VAB petitions has expired.  Thus, if you need more than a few weeks to prepare your case, VAB is probably not the best venue for you.

3.  Cases Heard by Judge.  If your case involves a complex legal or evidentiary issue, you may be better off taking your case to circuit court, where it will be decided by a judge.  In contrast, value disputes before VABs are heard by either an appraiser or, in smaller counties, by the value adjustment board itself, which may not include anyone with a legal background.

4.  Flexibility in Scheduling.  One of the biggest disadvantages of the VAB process is the lack of flexibility in the scheduling of hearings.  In small counties, the VAB may only have two meeting dates available for your hearing.  In larger counties that hold hearings in front of special magistrates, the Clerk generally will not consult with the petitioner before scheduling the hearing and, once a hearing is scheduled, it can only be re-scheduled once, unless the petitioner shows good cause.  In court cases, on the other hand, the parties’ attorneys coordinate the scheduling of hearings around the parties’ schedules and hearings may be rescheduled even without good cause.

5.  Time to Present Case.  Finally, if you have multiple witnesses and boxes of exhibits to present, a VAB hearing may not be a good venue, as only a limited amount of time is allocated to each petitioner.

Conclusion

As a general rule, cases involving multiple witnesses and complex legal issues should probably be filed in circuit court.  However, even in those cases, there may be a benefit to filing a VAB petition if you would prefer to have your case heard by a licensed appraiser or if you are concerned about being forced to turn over confidential business documents in discovery.  For simpler cases, filing a VAB petition can be an inexpensive way to challenge a property tax assessment without waiving your right to file a circuit court action if you are unsuccessful before the VAB.

How to Appeal the Denial of an Agricultural Classification


July 1st is the Property Appraisers’ deadline to notify land owners that they are denying their application for an agricultural classification.  Thus, this post will discuss common reasons for denial of an agricultural classification (sometimes referred to as a “greenbelt exemption” or “greenbelt classification”) and the procedures for appealing such a denial.

Why was my agricultural classification denied?

Probably the most common reason for an agricultural classification to be denied is the owner’s failure to file an application by the statutory deadline.  Pursuant to Fla. Stat. 193.461(3), an application for agricultural classification must be filed with the Property Appraiser by March 1st of the tax year for which the classification is sought.  Failure to file an application by March 1st constitutes a waiver of the classification privilege for that year.  If an application is filed after March 1st and the taxpayer demonstrates particular extenuating circumstances for the late filing, the Property Appraiser may go ahead and grant the classification.  However, if the Property Appraiser denies the classification, the taxpayer would need to file an appeal to the Value Adjustment Board.

Other than tardy applications, the most common reasons for denial of an agricultural classification are probably the size of the property and the failure of the owner or lessee to care for the land using accepted commercial agricultural practices.  To qualify for an agricultural classification, the property must be used primarily for bona fide agricultural purposes, which has been defined as “good faith commercial agricultural use of the land.”  This does not mean that the operation must be profitable, but it does mean that a parcel that is too small to be commercially viable or that is overgown with weeds will probably not qualify.

Qualifying for an agricultural classification also requires good communication between the owner and any lessees.  It is fairly common for an owner/developer to lease their land to a cattleman or farmer for a nominal amount in the hopes that the property will qualify for an agricultural classification while the owner waits to develop or re-sell the property.  However, if questions arise about the use of the property, the owner must ensure that the lessee promptly responds to any questions or document requests from the Property Appraiser’s office or the owner may be faced with a denial letter.

Appealing to the Value Adjustment Board

The most common way to appeal the denial of an agricultural classification is by filing a petition to the county Value Adjustment Board.  The petition, which can be found by clicking here, must be filed with the Clerk of the Value Adjustment Board (in the Clerk of Court’s office) no later than 30 days after the Property Appraiser mailed the notice of denial.  In small counties, the petition will be heard before the full Value Adjustment Board, which consists of two members of the county commission, one school board member, and two citizen members.  In larger counties, the petition will be heard by an attorney Special Magistrate, whose recommendations will be either approved or rejected by the full VAB.  Taxpayers who do not prevail before the VAB may take a further appeal to the local circuit court, but that appeal must be filed within 60 days of the VAB decision.

Appealing Directly to the Circuit Court

Taxpayers also have the option of taking their dispute directly to circuit court, without going before the VAB.  A circuit court action to challenge the denial of an agricultural classification must be filed within 60 days of the certification of the tax roll by the Property Appraiser.  Also, in order to file a circuit court action, the taxpayer must pay the taxes in full, or at least pay the amount they admit in good faith to be owning (the amount they would owe if they were granted the agricultural classification).  Failure to pay the property taxes for the year in dispute and any subsequent years will likely result in dismissal of the case for lack of jurisdiction pursuant to Fla. Stat. 194.171.

How to Appeal the Denial of a Homestead Exemption


In Florida, Property Appraisers who are planning to deny a taxpayer’s application for homestead exemption must notify the taxpayer of their  decision on or before July 1st.  Thus, many people will soon be receiving an unpleasant surprise in the mail.  This post will address common reasons for being denied a homestead exemption and the procedures for appealing the denial of a homestead exemption.

Why was my homestead exemption application denied?

The single most common reason for a homestead exemption application to be denied is that it was not filed by the statutory deadline.  Pursuant to Fla. Stat. 196.011, an application for a homestead exemption must be filed by March 1st of the tax year for which the exemption is sought.  Failure to file an application by March 1st constitutes a waiver of the exemption privilege for that year.  If an application is filed after March 1st and the petitioner demonstrates extenuating circumstances for the tardy application, the Property Appraiser may go ahead and grant the exemption.  However, if the Property Appraiser denies the exemption, the taxpayer would need to file an appeal to the Value Adjustment Board, as further discussed in my blog post on How to File a Late Homestead Exemption Application.

If the application was timely filed, then the exemption was most likely denied because the Property Appraiser determined that the taxpayer did not meet the requirements for a homestead exemption.  For example, the taxpayer may not have had the requisite interest in the property, or the Property Appraiser’s investigation may have indicated that the property was not the applicant’s permanent residence as of January 1st.  For more information on the substantive legal requirements for a homestead exemption, see my blog post on Qualifying for a Florida Homestead Exemption.

Notice of Denial

If a Property Appraiser intends to deny a taxpayer’s application for homestead exemption, the notice must be sent out no later than July 1st, and it must be either hand-delivered or sent by registered mail to the post office address given by the applicant.  See Fla. Stat. 196.151.  Beginning in 2009, a new statute, Fla. Stat. 196.193(5)(b), requires notices of denial of exemptions to specifically state the legal and factual basis for the Property Appraiser’s decision, and to be drafted so that a reasonable person could understand the specific facts about the applicant or their use of the property which caused the denial.  A notice that fails to meet those requirements is void.  However, some counties contend that this statute does not apply to homestead exemptions, and that issue has not yet been resolved by the courts.

Appealing to the Value Adjustment Board

The most common way to appeal the denial of a homestead exemption is by filing a petition to the county Value Adjustment Board.  The petitions, which can be found by clicking here, must be filed with the Clerk of the Value Adjustment Board (in the Clerk of Court’s office) no later than 30 days after the Property Appraiser mailed the notice of denial.  See Fla. Stat. 194.011(3)(d). In small counties, the petition will be heard before the full Value Adjustment Board, which consists of two members of the county commission, one school board member and two citizen members.  In larger counties, the petition will be heard before an attorney Special Magistrate, whose recommendation will be either approved or rejected by the full VAB.  Taxpayers who do not prevail before the VAB may take a further appeal to the circuit court, but that appeal must be filed within 15 days of the VAB decision.

Appealing Directly to the Circuit Court

Taxpayers also have the option of taking their dispute directly to circuit court, without going before the VAB.  A circuit court action to challenge the denial of a homestead exemption must be filed within 60 days of the certification of the tax roll by the Property Appraiser.  Also, in order to file a circuit court action, the taxpayer must pay the taxes in full, or at least pay the amount they admit, in good faith, to be owing.  Failure to pay the property taxes for the year in dispute and any subsequent years will likely result in the case being dismissed for lack of jurisdiction pursuant to Fla. Stat. 194.171.

Liens for Back Taxes

Taking this issue a step further, if a property owner had already been receiving a homestead exemption, but the Property Appraiser determines that they should not have been receiving the exemption, the taxpayer will be required by Fla. Stat. 196.161 to pay back taxes, plus a 50% penalty and 15% interest.  If the taxpayer fails to pay the back taxes within 30 days of receiving such a notice from the Property  Appraiser, the Property Appraiser can record a tax lien on all of the taxpayer’s property in the state.   Thus, retroactive removal of a homestead exemption can be very costly.  Also, as the courts have not yet resolved the question of whether taxpayers can bring back tax and tax lien issues before the VAB or whether they must file an action in circuit court, any taxpayer in this situation should consult an attorney as to how to proceed and whether it would be beneficial to file an action in circuit court.

Taking a Property Tax Dispute to Court


With the Value Adjustment Board process winding down in most Florida counties, many taxpayers and some Property Appraisers are now contemplating whether to take the next step of filing a lawsuit in circuit court.  This post will explain the deadlines and requirements for filing a circuit court action, the effect of the VAB proceeding in court cases, and the difference between a VAB and court proceeding.

Deadline to File a Circuit Court Action

The timeframe to file a circuit court action in a property tax or exemption dispute is very short and, because the deadlines are jurisdictional, failure to file an action by the statutory deadline will result in permanent dismissal of your case.  Thus, anyone who is contemplating appealing a VAB decision to the circuit court is encouraged to consult with an attorney as soon as possible after receiving their VAB decision.

Pursuant to Fla. Stat. 194.171, those taxpayers who choose not to file a VAB petition must file their circuit court actions no later than 60 days after the certification of the tax roll, which generally occurs around mid-October in many counties.  Taxpayers who file a VAB petition, but are unsatisfied with the outcome can file an appeal of the VAB decision to the circuit court, but those appeals must be filed within 60 days of the date that the VAB renders its decision.  Pursuant to Fla. Stat. 196.151, an appeal of a VAB decision denying a homestead exemption must be filed within 15 days of the date that the VAB decision is rendered.

The question of when a VAB decision is “rendered” is a bit more complicated now that the Record of Decision forms contain two signature lines – one for the Chairman of the VAB, and another for the Clerk to sign when the decision is mailed.  At least one judge has indicated that he believes the 60 day deadline begins running on the date that the VAB Chairman signs the Record of Decision, even if the decision is mailed by the Clerk on a later date.  Thus, it would be wise to err on the side of filing the lawsuit within 60 days of the date the decision is signed by the VAB Chairman.

Of course, the county Property Appraisers also have the option of appealing an unfavorable VAB decision to circuit court.  While that situation is less common, if a Property Appraiser chooses to go that route, they must file an action against the taxpayer prior to extension of the tax roll or, if the tax roll was extended prior to completion of the VAB hearings, within 30 days of recertification.

Payment of Amount Admitted to be Owed

Prior to filing an action in circuit court, the taxpayer is also required to pay that year’s property taxes.   However, they have the option of paying their taxes in full or paying the amount that they admit in good faith to be owing.  As with the deadlines discussed above, this requirement is jurisdictional and failure to pay the taxes prior to filing the lawsuit will result in dismissal of the case.  In addition, it is imperative that the taxpayer continue to pay their taxes in a timely manner in future years while the lawsuit is pending, as the case may also be dismissed if any later years’ taxes become delinquent.

Effect of VAB Proceeding

Although referred to as an appeal of the VAB decision, a circuit court action in a property tax dispute is “de novo” – meaning that the parties will not be relying on the record created before the VAB, but rather will have the opportunity to present their case again, in full, before a circuit court judge.  Thus, regardless of how many procedural or evidentiary errors may have been committed by the VAB or the Special Magistrate, none of that matters once the case gets to circuit court.  That said, although the VAB decision is not dispositive and the parties are essentially getting a fresh start before the circuit court, it is important to note that the VAB proceedings are recorded.  Thus, it is certainly possible for one party to use the other parties’ recorded VAB testimony to impeach them at trial.

Lawsuits Against the VAB

Fla. Stat. 194.036 allows the Property Appraiser to sue the VAB for violations of the law if the Department of Revenue finds probable cause that a particular county VAB has consistently and continuously violated the intent of the law or administrative rules in its decisions.  Once the Department makes such a finding, the Property Appraiser has 20 days to file a lawsuit against the VAB.  If the Property Appraiser prevails, they are entitled to reversal of the VAB’s decisions, as well as an injunction against further violations of the law.

The Florida statutes do not provide a mechanism for an aggrieved taxpayer to sue the VAB over violations of the law and, although some taxpayers have filed such suits anyway, I have not seen any that were successful, as the courts tend to find that the taxpayer’s remedy is to sue the Property Appraiser, as discussed above.  However, the Department of Revenue’s VAB training materials indicate that written complaints alleging noncompliance with the law by the VAB, Special Magistrates, Clerk or parties should be sent to the VAB Attorney, with a copy to the Department of Revenue.

One Final Caveat . . .

Unlike a VAB hearing, where the rules of evidence are somewhat lax, litigants in circuit court are expected to abide by all of the Florida Rules of Civil Procedure and the Rules of Evidence.  Moreover, the circuit courts are not bound by the various instructive materials issued by the Department of Revenue and the VABs.  Rather, they are free to interpret the tax statutes as they see fit.  Given the many different opinions as to how the new burden of proof and other procedural matters should be applied, it is entirely possible that the circuit courts could apply the new statutes very differently than the VABs.

What to Expect at the Final Value Adjustment Board Meeting


So you finally received a decision from the Special Magistrate and, whether you won or lost, at least your VAB appeal is over and done with, right?  Not quite. For those Florida counties that employ Special Magistrates, the recommendations of the Special Magistrates are just thatrecommendations.  Florida Statute 194.035 authorizes the value adjustment boards to accept those recommendations without further hearing, but the ultimate authority to grant or deny a petition rests with the VAB, which consists of two county commissioners, a school board member, and two citizen members.

In most counties, the final VAB meeting is not particularly exciting.  Unless they have a question about a particular petition, the VAB members will usually move to approve all of the recommendations of each Special Magistrate as a group, without any discussion.  The Special Magistrates usually attend the final VAB meetings in case the Board members have a question, and occasionally Board members will ask a Special Magistrate to further explain their recommendations.   There is usually no opportunity for the taxpayer or Property Appraiser to re-argue their position as to a particular petition, although the Board will often have an open “public comment” session at the end of the meeting, after they have rendered their decisions.

Of course, there are exceptions.  Some county value adjustment boards have adopted procedures whereby the taxpayer or Property Appraiser can file written objections to a Special Magistrate’s recommendation, as long as they limit their objections to legal issues, and do not try to introduce any new evidence.  Other VABs allow Property Appraisers and petitioners to orally address the Board and object to adverse Special Magistrate recommendations at the final VAB meeting.

In general, even in counties where the VAB allows for oral or written objections, the parties are not allowed to introduce new evidence that was not presented at the hearing before the Special Magistrate. In fact, an appellate court recently held that a VAB did not have authority to hold a rehearing and allow new evidence to be presented after it had accepted the Special Magistrate’s recommendations.  This case does not necessarily preclude a VAB from rejecting a Special Magistrate’s recommendation and holding its own evidentiary hearing.  However, such a scenario is highly unlikely in most counties, as the VABs tend to defer to the expertise of the Special Magistrates.

After the final VAB meeting, the Clerk has 20 days to issue the final Record of Decision for each petition.  Taxpayers who are not satisfied with the decision of the VAB can file an action in circuit court, but such actions must be filed within 60 days after the decision was rendered by the VAB.   Actions challenging the denial of a homestead exemption must be filed no later than 15 days after the VAB renders its decision.  These deadlines are jurisdictional requirements that cannot be waived, so if you are considering filing a court action, it is essential that you contact an attorney as soon as possible, as failure to meet the deadline will result in dismissal of your court case.

Follow

Get every new post delivered to your Inbox.

Join 31 other followers