When purchasing property, enlist a tax certiorari attorney to ensure its taxes reflect todays market

In tax certiorari, the courts have long stated that absent any abnormal circumstances, a subject sale is the best indication of market value in a given tax year. Thus, a recent purchase price would have a major impact upon the ability to successfully reduce a location's property taxes. In a rising market, municipalities would argue that frequently inflated purchase prices should be adopted for the subject property despite the fact that the income did not justify the price paid. Now, as deals begin to happen, municipalities are arguing recent purchase prices cannot be relied upon as representative of the market due to the present economic conditions. Current sales are labeled distressed or made under duress due to persistent vacancies or a seller's lack of liquidity. In 2010 and for the foreseeable future, these types of transactions are no longer the anomalies, they are the market. Transactions that have some sort of market driven impetus for sale, whether it's a personal financial difficulty or a lack of profitability induced by the poor economy, are now more prevalent than those without these issues. The prudent tax certiorari lawyer should understand that with each sale in today's market, a new owner cannot be expected to pay property taxes at figures higher than the sales price because he negotiated from a position of strength. Rather, a great deal of communication must exist between the property owner and their counsel to review the transaction, so that the attorney may prepare his argument as to why the taxes must be reduced. Similarly, sales from years past must be scrutinized closely as well in order to discern the impact of the worst financial crisis since the Great Depression. In a thriving economy, owners speak of a property's value increasing the day after they purchase it. In a recession, the common refrain is a bit more pessimistic. Purchasers of commercial property earlier this decade wax poetic about it being "a different world back then." The sentiment leaves the impression that "back then" could have been 40 years ago. Unfortunately, often owners are referring to purchases from three or four years ago that only feel like ages ago thanks to the economy. Many aspects of economy have changed in a short period of time. In 2008, notable financial institutions such as Bear Stearns and Lehman Brothers ceased to exist, while those that remained were in desperate need of government assistance. According to the Wall Street Journal a total of 282 banks, savings banks and thrifts have failed since 2008. Increased unemployment and cutbacks have produced an undeniable wealth effect as the population continues to spend less. Many small retailers have struggled and larger tenants such as Circuit City, Linens 'n Things, National Wholesale Liquidators, Levitz, Comp USA and Home Depot Expo have been eliminated entirely, while others chains like Pathmark and Office Depot have selectively closed a number of locations. The drastic change in the commercial property landscape alters the way we view purchase prices before and after all these changes impacted the economy. No longer do knowledgeable bystanders judge past deals strictly on dollars, but rather success is also measured on whether owners were able to rid themselves of an asset. While current buyers must carefully consider today's financing options, leasing costs and the anticipated prolonged period of time required to lease up the property. A contract of sale is more valuable to your tax certiorari attorney if he or she is fully aware of the circumstances surrounding the purchase. It is imperative for counsel to work with property owners frequently and swiftly in order to accomplish the optimal result. The current state of the economy offers a tremendous opportunity to developers who have recently bought a property if the case is resolved quickly and effectively. Owners who purchased a property prior to the recession at an inflated price can still avail themselves of the current economic conditions if their tax certiorari attorney works diligently in presenting their case. The sooner the case can be brought before the court, the better the opportunity to take advantage of the economic downturn and have it result in a reduction in your property taxes. Brad Cronin, Esq., is an attorney and partner at Cronin, Cronin & Harris, P.C., Mineola, N.Y.