What's it worth to you?
Local Realtor wins string of settlements in assessment challenges
by Todd Paul
Last week, the Woodstock Town Board voted to settle four years of tax certiorari claims with Realtor Andrew Peck. Depending on whom you talk to, the settlement either marks a triumph of property rights over an unfair tax system, or signals that towns are vulnerable to frivolous lawsuits by cynical manipulators of the justice system.
Peck had challenged the town over some 70-property assessments dating back to 1995, claiming the town grossly overassessed his clients. After a prolonged attempt to get his cases dismissed on procedural grounds - Woodstock Assessor Seth Plawsky says Peck failed to provide any substantive information supporting his claims of overassessment - the, town settled in order to avoid further legal costs. . . .
For example, in 1995 Peck represented six properties assessed at a total of $458,000. Peck claimed a fair value for these properties would have been $304,000. Both sides have agreed to settle at a total assessment of $359,000., meaning the town will have to refund collected tax dollars to the property owners.
Likewise, Peck represented 21 properties in 1996, 66 properties in 1997 and 20 properties in 1998. The cumulative reduction in assessments to the individual taxpayers represented by Peck amounts to some $1.8 million.
Peck claims this is a vindication of his contention that until last year's revaluation, many Woodstock properties were overassessed. He says if he were filing frivolous claims, the town would win in court. The fact that the town elected to settle once its objections on procedural grounds had been thrown out indicates to Peck his claims are valid.
Not necessarily so, says Plawsky; Woodstock's new assessor characterizes Peck and others who have filed assessment challenges as the ambulance chasers of the real estate world, charging the town can't win in court, even against a frivolous claim. Judges, he says, don't know anything about property valuation and don't want to spend time on tax certiorari cases. Faced with two widely differing assessments of the same property, a judge will typically split the difference, guaranteeing a reduction from the original assessment.
In many cases, Plawsky says, a judge will refuse even to hear the merits of the assessment challenges case, instead insisting the two sides negotiate their own settlement. Either way, the town loses. . . .
So why does the town spend tax dollars fighting these cases on procedural grounds? According to Plawsky, the town has no choice; if it became known that anyone who grieves an assessment automatically receives a reduction, every property owner in town would show up on grievance day. . . .
According to Plawsky, the town Board of Assessment Review has "bent over backwards" to give Peck time to gather information, but has received nothing more substantive than a stack of photocopied pages from the Multiple Listing Service Woodstock section, showing houses that have recently sold. Plawsky says Peck didn't even tell the town which sales should be compared to which contested properties until he was pressed to do so. Under these circumstances, Plawsky says, the board has no choice but to dismiss or deny Peck's claims, because there is not sufficient evidence to warrant an assessment reduction.
Peck says he spent thousands of dollars out of his own pocket to carefully document his claims over the years, only to be turned down by the assessment board in every case. Finally, he says, he decided to save his money and let the court decide. "After years of doing extensive work, and getting rejected 100 percent of the time, I abbreviated the process," Peck says. He adds that he has never lost in court.Back to top
Whichever point of view you subscribe to, one thing is certain: Litigating tax certiorari cases costs the town's taxpayers a lot of money. Town Supervisor Tracy Kellogg estimates Woodstock has spent $15,000 litigating Peck's cases alone. By comparison, the settlements reached are only costing the town some $10,700 in tax rebates, since the majority of property taxes are collected by the school district and county. That means Woodstock spent more money litigating cases than it lost in the settlement. The losses from the certiorari settlements are made up in the town, school and county budgets by redistributing the tax burden to other properties. The taxes of all Woodstock property owners are used to help pay the $15,000 in legal fees.
Peck claims to have spent $15,000 to $20,000 out of pocket in legal and appraisal fees, which he has yet to recoup. He says he hopes to make a little money this year, after which he plans to get out of the assessment challenging business, at least in Woodstock. . . .
. . .[In response to Plawsky's allegations] Peck says he has never heard of anyone challenging assessments "blindly," without first ascertaining that the property in question is actually overassessed. Going to court is expensive, he says, and he would be foolish to do so on a contingency basis if he didn't know his case had merit. "My criteria for being willing to accept a client is, you've got to be at least $10,000 or $15,000 overassessed," he says.
In fact, Peck says he started challenging assessments in 1986, when he bought a property in Woodstock for $20,000, which was assessed for $71,000. After receiving little satisfaction from the grievance board, Peck went to court; the town fought his claim, and the case dragged on for four years. Finally, says Peck, the judge told both sides to hire an appraiser and have the property appraised. Peck's appraiser came in at $20,000; the town's appraiser came in at $21,500. A settlement quickly followed.
Similarly, Peck says he bought a property in Cairo for $32,000 that was assessed at $340,000. But he soon realized he was spending more in legal fees than he was saving in taxes by getting his assessments lowered. That's when he decided to represent groups of clients, to make the court costs more manageable. He currently represents clients in Woodstock, Hurley, Cairo, Saugerties and the City of Kingston.
Issues of documentation aside, Plawsky says Peck's right on some properties and wrong on others. But Peck isn't the only one challenging assessments in Woodstock. What can be done to protect the town against frivolous property assessment challenges? The only solution Plawsky and town Supervisor Tracy Kellogg have come up with is frequent, fair revaluations and an open grievance process that they hope will make property owners feel fairly treated without having to resort to lawsuits.
According to Peck, Woodstock's assessments are already more fair than they have been for years. Peck gives Plawsky credit for this, and says it's one reason he doesn't expect to end up in court with Woodstock again. "I want them to put me out of business in this niche of my business," says Peck, "And I think they're going to do it in Woodstock."