Given the extent to which real property values have tumbled, property owners may want to review their own industrial, commercial, retail, business and/or residential real property tax liabilities to see how they have been affected. If such an examination reveals a significant difference in value, property owners have the option of filing a complaint with their local county Board of Revision.  However, they must act quickly – March 31, 2010 is the final deadline to file a complaint.  Failure to file by this date will result in a loss of rights to challenge the 2009 valuation.

 

The process by which property is valued for tax purposes is outlined by Ohio Revised Code Chapter 5713.  Under R.C. 5713, the county auditor is responsible for establishing the value of each and every real estate parcel in the county, including homes, apartment buildings, commercial property, industrial sites, and vacant lots. Property values are established in one of two ways, either by an appraisal or by an update.  An appraisal is conducted every six years and is an estimate of fair market value.  Updates are conducted three years after an appraisal, and are based upon actual sales in each neighborhood over the previous three years. In both a reappraisal and an update, the county auditor estimates what each property would be worth on January 1 of that year. Taxes based on the updated value would be paid the next year.

 

Ohio Revised Code Section 5713.03 requires that each real estate parcel be valued according to its “true value.”  True value is equivalent to fair market value, which is best determined by a recent sale of the property in question.  Recent is generally considered to be a sale within the last three years.  Sheriff’s sales or transactions between friends, family, or business associates are not considered to be a sale transaction that indicates value.   In cases where there has not been a recent sale, Ohio Administrative Code Section 5703 provides for three methods of calculating value: 1) the market data approach, which compares recent sales of comparable properties; 2) the income approach, which capitalizes the net income attributable to the property; and 3) the cost approach, which calculates cost of the buildings and adjusts for depreciation, and adds to the value of the land.  Professional appraisers are capable of applying the three methods and producing a written appraisal report.

 

If a property owner elects to challenge the property’s “true value,” he or she may complete and file DTE Form 1, Complaint Against the Valuation of Real Property, with the appropriate county Board of Revision. The forms are typically found online at the county’s Board of Revisions web site.  The Board of Revision will then schedule a hearing, where the property owner has the burden of proof to justify a change in value.  Evidence that may be presented includes a recent appraisal of the property; a purchase agreement if the property was sold in the last three years; or photographs to show property conditions.  The property owner has the right to file an appeal with either the Court of Common Pleas or the Ohio Board of Tax Appeals in Columbus if a tax assessment complaint is unsuccessful. 

 

Although individual property owners may prepare and file a complaint and appear before the Board of Revision themselves, it is advisable to consult an attorney.  If legal entities such as a trust, corporation, or limited liability company own the property in question, an attorney may also be useful in order to present any evidence, question appraisers, or make legal arguments during a Board of Revision hearing.  For more information on filing such a complaint, please feel free to contact Anthony J. Coyne, Bruce G. Rinker or John W. Monroe in the Real Estate Group at Mansour, Gavin, Gerlack & Manos Co., L.P.A., (216) 523-1500.