A real property tax appeal, particularly amid a distressed realestate market, presents a ready way to reset the municipality'sassessment consistent with the property's true fair market value.Where the market value of property plunges, the taxes associatedwith that property should naturally follow suit.

That concept certainly has gained traction, as astute propertyowners filed an unprecedented number of appeals in 2009. Due tobudgetary constraints, most municipalities do not conduct formalproperty revaluations more than every 10 years. This does not mean,however, that local governments are unaware of the economic climateand its impact upon property values. As a result, taxpayers thatfile an appeal will likely benefit, either through consensualnegotiated settlements or by virtue of judicial decisions.

Cole Schotz, for example, recently represented the owner of a138,000-square-foot distressed office building in Lyndhurst. Byimpressing upon the town that the property was plagued with an 86%vacancy rate and was in need of significant capital investment toimprove marketability, the town agreed to settle the matter byreducing the assessment from a value indicating $126 per squarefoot to $108 per foot. This multi-year resolution resulted in over$149,000 in tax savings for the proactive property owner.