PENNSYLVANIA SUPREME COURT THROWS THE BOOK AT SCHOOL DISTRICT TAX APPEALS

3/14/2018 | Articles & Alerts

PENNSYLVANIA SUPREME COURT THROWS THE BOOK AT SCHOOL DISTRICT TAX APPEALS

Pursuant to a recent order of the Delaware County Court of Common Pleas, the County will now undertake the first reassessment of all property valuations since 2000. The reassessment is required to address the apparent lack of uniformity in property assessments, which constitutes a violation of the Pennsylvania Constitution. The tax burden for some taxpayers may rise substantially.In a July 5, 2017 decision, the Pennsylvania Supreme Court held that Upper Merion Township may have violated the Pennsylvania Constitution by selectively appealing only the assessments of commercial properties, such as apartment complexes, while choosing not to appeal the assessments of other types of property – most notably, single-family residential properties, many of which are under-assessed by a greater percentage. See, Valley Forge Towers, et al v. Upper Merion School District and Keystone Realty Advisors, No. 49 MAP 2016 (Pa. July 5, 2017).

Not surprisingly, the Court did not answer every question and did not provide a definitive road map for property owners to follow. The Court merely stated that the property owner had stated sufficient facts in its complaint to establish that the district had selectively targeted commercial properties for appeal, many of which are owned by non-resident taxpayers, and selectively appealed only certain commercial properties with the largest values, i.e., apartment complexes and shopping centers. The district did not appeal single-family residential properties with same zeal, even though such properties were under-assessed to a greater degree than many commercial properties. Therefore, the district’s practice was violative of the Uniformity Clause of the Pennsylvania Constitution (“… taxes shall be uniform, upon the same class of subjects”).

The Court’s decision comes on the heels of recent debate by the Pennsylvania Legislature on House Bill #1213, which would ban assessment appeals by school districts except in very limited circumstances. HB #1213 would also allow for the results of these appeals, including settlement agreements made pursuant to appeals, to be unwound under certain circumstances. Despite broad support from property owners and various advocacy groups, push back from school districts has temporarily halted its advance.

What does this all mean to someone who is currently fighting a school district appeal or has been victimized by such an appeal in the form of an adverse board or court decision, or a less than favorable settlement agreement? A plaintiff, just like Valley Forge, may get past preliminary objections, but must ultimately develop facts that demonstrate that the school district operated in an unconstitutional manner. Without factual confirmation, the property owner will likely lose at the summary judgment or trial phase. A property owner will be required to engage in an exhaustive and deliberate discovery process to root out facts that may be difficult to find.

Therefore, a property owner with a pending appeal, should consider either a dismissal motion or a separate complaint against a district. Those who have reached unfavorable settlements or simply lost a district appeal, may need to consider a more complex approach to escape from a harsh result. Please give me a call if this is an avenue you wish to pursue. Every case will be slightly different and merit careful analysis.

I represent property owners throughout Pennsylvania in tax assessment appeals and in defending appeals filed by school districts. Please call (610-941-2469) or email me at nstein@kaplaw.com if you have any questions.

P.S. If you want to file your own tax appeal, most counties have adopted an August 1 filing deadline. Don’t wait until the last minute.