What's it worth to you?
Last week, the Woodstock Town Board voted to settle four years of tax certiorari claims with Realtor Andrew Peck. Depending on who[m] 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 overassessments [NOT TRUE] the town settled in order to avoid further legal costs. In every case, the settlement was mid-way between the town's original assessment and the value Peck claimed should have been put on the property. [NOT TRUE]
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 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 numerous assessment challenges as the ambulance chasers of the real estate world, charging the town can't win in court, even against a frivolous claim. [NOT TRUE] Judges, he says, don't know anything about property valuation [They don't have to, each party provides an independent professional appraisal before trial] 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. [If one side's claim is invalid, this is not true] In many cases, Plawsky says, a judge will refuse even to hear the merits of the case, instead insisting the two sides negotiate their own settlement. [Incorrect, if the parties wish a trial, they are entitled to it] Either way, the town loses; Peck's client gets a reduced assessment and Peck earns his commission.
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. [Specious, we are not asking that "anyone automatically" receive a reduction, only those whom the assessor has overassessed] Besides, says Plawsky, Peck almost forces the town into court by refusing to provide information to support his claims. [Totally false, if I fail to support my claims, they would be thrown out of court; the judge specifically rejected Woodstock's motion to dismiss on this basis]
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. [TO REPEAT, THE ULSTER COUNTY SUPREME COURT JUDGE REVIEWED THE EVIDENCE I HAD SUBMITTED AND FOUND IT ADEQUATE FOR THE PURPOSE INTENDED]
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.
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 Supervi-sor 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. [WITH COUNTY, TOWN AND SCHOOL TAX, WOODSTOCK CLIENTS' REFUNDS EXCEEDED $80,000.] 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.
According to Plawsky, Peck is just one of a host of individuals and corporations making money by challenging assessments. For example, a New Jersey firm has filed a challenge to the assessment value of the Woodstock Grand Union supermarket. The current assessment is $851,500, but the out-of-state firm claims the store should actually be assessed at $212,875. Among other reasons, the New Jersey firm claims the Grand Union is a "wholly exempt" property that lies entirely outside the town borders. To an exasperated Plawsky, this indicates the chal-lenging firm doesn't even know what kind of business the Grand Union is, or where it is located. Yet the challenge looks to be headed for court.
Plawsky gives another example. Someone recently filed an assessment challenge on behalf of Lasher Funeral Home, claiming its value should be $200,000. The town settled that case at $375,000. Plawsky says $200,000 is a ridiculously low assess-ment for the Lasher property. [NOTE: NEITHER OF THE TWO "RIDICULOUS" CLAIMS ASSESSOR PLAWSKY CITES ABOVE ARE MY CASES]
He adds that Woodstock is not alone in facing challenges. The problem is even worse downstate, where he believes realtors can now take courses to learn how to make money through assessment challenges. [THIS I BELIEVE IS A GOOD THING, ONLY BY CORRECTING INEQUITIES WILL THEY MAKE MONEY; IF ASSESSMENTS ARE FAIR, THEY WILL HAVE NO BUSINESS]
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 each 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. [AN UNDERSTATEMENT, AT LEAST: WOODSTOCK'S HIRED A PROFESSIONAL APPRAISER FOR SEVERAL THOUSAND DOLLARS. HE AGREED THAT MORE THAN 95% OF OUR CASES REVIEWED WERE CORRECT IN CLAIMING OVERASSESSMENT]. 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. [My comment now, several months after this article was written: "I give the highest marks to the recent work of the Woodstock Town Assessor and the Grievance Board for the fairness -- Woodstock now (fall 1999) has the most equitable assessments of any town I know."]
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." ++
[In Woodstock, I am pleased to say, they did, and fairness for all clients was achieved without costly judicial review this year.]