Let's reappraise appraisals
As we enter the 2014 real estate tax cycle, many property owners and taxing jurisdictions are considering appealing what they believe to be unfair assessments. For many years, it was a good idea to have an appraisal done on a property to see if the assessment was fair. The appraisal was then presented to the county appeals board and, in most cases, the property was reduced to the appraised amount. In Allegheny County, that is no longer the case.
In 2013, some property owners sued the county, claiming that they submitted appraisals at their appeal hearing and did not receive reductions. They asked the court to approve the appraisals without any quasi-judicial review. In other words, the appraisals had to be rubber-stamped by the appeals board. The court correctly rejected this argument because not all appraisals should be taken as gospel.
The county solicitor and the appeals board solicitor argued that the appraisals performed by state-certified appraisers were “bad” and did not warrant consideration or a reduction in the certified assessment. But the county neglected to send these “bad” appraisals to the state appraisal board. The state board has jurisdiction over the work product of state-certified appraisers. If the county had submitted these appraisals, the public would have found out that many of the appraisals complied with assessment standards.
The Fitzgerald administration and the appeals board believe that their victory in court is a victory for tax fairness and uniformity. Only time will tell if public confidence will erode because more appraisals are rejected moving forward.
Last year, I suggested the county pass an ordinance requiring greater scrutiny in reviewing certified appraisals before the county appeals board. I also suggested that the court would not resolve this issue because of the narrow argument before it. For what it's worth, I'm asking the county executive and the county council to recommend changes in the way appraisals are scrutinized on appeal.
The changes would follow state appraisal law and permit only state-certified appraisers to review appraisals. At the present time, appraisals are reviewed by licensed real estate salespeople and real estate brokers. Under state law, real estate licensees are not permitted to give an opinion of value. In the private sector, appraisals for mortgage loans are reviewed by certified appraisers, not real estate licensees.
The county appeals board has only one Pennsylvania state-certified appraiser. The county may want to consider adding another appraiser or two to enhance public confidence in the process. The county should also consider submitting the “bad” appraisals to the State Board of Certified Real Estate Appraisers for review. This would ensure discipline for faulty appraisals by appraisers. It would also result in fair tax bills for the property owners who paid for appraisals.
The appeals period for 2014 begins soon. Allegheny County would instill public confidence in this system by enacting an ordinance that requires appraisal reviews by appraisers. Any taxpayer who is willing to hire an appraiser deserves an appeal process that provides this fail-safe approach to paying his fair share of the tax burden.
I hope that changes are considered and become law before the next round of appeals.
Michael J. Suley was manager of the Allegheny County Office of Property Assessments from 2006-12 and vice chairman of the county Board of Property Assessments Appeals and Review from 1997-2000.