Property Tax Appeal Property Tax Motigation Specialist

Condominium Appeal Questions

 

 

What other documents do I need to submit for an Individual Condominium Owner Appeal?

 

If you elect to file as an individual unit owner, the following information should accompany your appeal:

 

(a) The closing statement if the unit has been sold within the last five years;

 

(b) A copy of the local municipality’s occupancy permit if the unit is newly constructed or converted;

 

(c) The percentage of ownership of the individual unit, and if presented, the percentage of ownership of comparables.

 

 

What is a joint appeal?

 

A joint appeal filed by the Association or Board on behalf of all condominium owners is the most effective way to appeal the valuation of any condominium building(s).

 

 

What are the advantages of a joint appeal?

 

There are three advantages to filing a joint appeal:

 

• market forces that affect the value of an individual condominium unit will have a similar affect on the other units as well;

• the percentage of ownership assigned to each unit is a major valuation factor; and

• the Association or Board is most likely to have access to relevant sales information.

 

 What other documents do I need to submit for a joint appeal?

 

 

The following information must accompany each joint condominium valuation appeal:

 

(a) A copy of the original declaration of condominium ownership with all subsequent amendments;

 

(b) A list of all unit numbers, and the corresponding permanent index numbers, which are subject to the terms of the declaration. Include all property owned by the Association or Board, including recreational, parking, or other facilities, whether adjacent or not;

 

(c) A description of the size of each unit, the unit blend of the building(s) and the percentage of ownership of each unit;

 

(d) Interior and exterior photographs of the building(s);

 

(e) The closing statements for all units which have been sold within the last five years;

 

(f) Actual construction or renovation cost information if the building(s) has been constructed, converted or renovated within the last three years; and

 

(g) Three years of financial statements if the building(s) has been constructed, converted, or renovated within the last three years.

   

 

Why a condominium Board Should Appeal their Property Taxes?

 

A condominium association should take an active role in trying to reduce the property taxes of the individual unit owners. An association can do this by filing one property tax assessment appeal, which would include all of the units within the association. Since property taxes are based on the value of the real estate, an assessment appeal that details declining property values by showing the recent sales within the association is likely to be successful.

 

We are often asked, Should I file an appeal on just my unit or should the association file one appeal which would include all of the units within the association? Assessing officials actually prefer that an association file as a whole. First, it is more efficient for the assessing officials to analyze a single appeal as opposed to dozens or hundreds of appeals for the same property. Second, declining sale prices that affect one unit will have a similar effect on the other units of the association as well. Third, since the condominium association is assessed as a whole (with the percentage of ownership determining each units individual assessment), an appeal focusing on the entire association is more effective. Fourth, the association is more likely to have access to relevant sales information that will provide the evidence of the market value of the association. Finally, the Illinois Constitution requires that assessments be uniform. Assessing officials are less likely to reduce the assessment of an individual unit while not giving similar units uniform assessment relief.

 

In Cook County, Illinois condominiums and townhomes are to be assessed at 10% of fair market value. Outside of Cook County, Illinois these residential units should be assessed at 33.33% of market value. In order to lower the property taxes, the association would need to show that, on average, the assessor is assessing the units at more than 10% of their market value in Cook County, Illinois and more than 33.33% in the collar counties.

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Even with the knowledge that the units are over assessed and paying too much in property taxes, some associations are still reluctant to file a property tax appeal.

 

Property taxes are calculated by applying the county equalization factor (outside of Cook County, Illinois this is usually a non-factor) and local tax rate to each unit=s property tax assessment. Of the three components that make up the tax bill (i.e. assessment x equalization factor x tax rate), prior to any homeowners or seniors exemptions, the only piece of this calculation that a taxpayer can appeal is the assessment. So if you want to make sure that your association is being fairly taxed, the first thing to look at is the property tax assessment. If the assessment is greater than 10% of recent sale prices within the association for property located in Cook County, Illinois or greater than 33.33% of recent sales for associations in the collar counties, then the association is likely over assessed and the unit owners are paying more than their fair share of property taxes.

 

Let’s look at an example of a condominium association located in Cook County, Illinois with 50 identical units. If the average sale over the last two or three years for these 50 identical units is, say, $200,000, then the property tax assessments for each unit should be no higher than 20,000 (i.e. 10% of recent sale prices). If the assessments were higher than 20,000, then the association should file a property tax assessment appeal with the assessing officials. By lowering the assessment, this will serve to lower the property taxes.

 

Even with the knowledge that the units are over assessed and paying too much in property taxes, some associations are still reluctant to file a property tax appeal. An association shouldn’t hesitate. Section 10c of the Illinois Condominium Act authorizes the association’s board of managers, by a two-thirds vote of the board members, to appeal the tax assessments on behalf of all of the unit owners within the association. The same statute authorizes a condo board to collect property tax firm’s fees from assessment appeals as common expenses from the unit owners.

 

An association usually has two opportunities to file a property tax assessment appeal before the tax bills are mailed. The first is an appeal to the county assessor (township assessor for those associations located outside of Cook County, Illinois) and the second is an appeal to the county board of review.

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Even if an association has appealed the tax assessments in recent years, this should not dissuade the association from filing an appeal in the current year. Times have changed. As sale prices have been declining each year, the association or its Tax Firm should be monitoring the assessments each year as well. The association should take a pro-active approach to appealing the assessments based on a continued decline in sale prices. The end result should be reduced property taxes for the individual unit owners.