Is There Something Rotten in Hanover?
Hanover property taxpayers alleged that sales chasing made the results of the revaluation illegal and violative of accepted standards of assessing in a petition to the Board of Tax and Land Appeals (“BTLA”) requesting a do-over of the 2018 revaluation. The petitioners have requested that the BTLA declare it invalid and order a reassessment. Hanover becomes the second major municipality in New Hampshire in which the BTLA will analyze the need for a reassessment. As written about previously, Nashua Homeowner Continues to Fight for Fair Assessments, the BTLA is deciding whether it should order a reassessment of the property in Nashua. The BTLA has the power to order a municipal-wide reassessment of all the property in any municipality in the state after receiving information from any source or when it receives a petition from 50 taxpayers. Sixty Hanover taxpayers joined the two lead petitioners, Richard Joseph, a real estate broker who has started a blog called Fair Tax Hanover, and investor Bruce “Buff” McLaughry, to bring the petition with serious allegations.
Sales chasing is very difficult to define but it is one of the most serious charges in assessing because it goes to the very integrity of the assessing process. While I expect that an entire book could be devoted to the subject of sales chasing, in a nutshell it is the practice of changing the assessments of properties that have recently sold in a manner differently than the assessments of properties that have not sold recently. The reason that it is such a serious charge is because it can make statistics or mass valuation systems unreliable because they will not be an accurate indicator of the value of the unsold properties.
Dave McMullen, Hanover’s assessor, categorically denies that any sales chasing took place, as reported by the Valley News. However, Richard Joseph and Buff McLaughry claim that “two key levers’, construction quality grade and land values, were manipulated by the assessor to back into assessments to achieve desired outcomes. An example that illustrates this alleged manipulation is 10 Pine Drive which sold for $980,000 in 2016. The property’s prior assessment, $537,800, was changed to $968,000 in the 2018 revaluation, only $11,000 less than its sale price in 2016. This was accomplished by manipulating the land value to arrive at $644,800 from a prior land value of $255,500.
The petition also cites the extraordinary number of abatement requests filed with town in connection with the 2018 revaluation as evidence of its invalidity. In response to assessments that rose from 50% to in some cases more than double last-year’s assessments, nearly 400 abatements were filed, or about 12% of the 3,400 taxable properties in Hanover. Assessors often cite a low percentage of abatements filed as evidence of the accuracy of property tax assessments, so it would seem that a very high number of abatements would be an indicator that there is something rotten in Hanover.
While the Hanover property owners have made serious allegations, the BTLA will go through an established process of investigating the need for a reassessment in the town. The BTLA’s review appraiser will conduct a ratio study comparing recent sales to assessments to produce statistical indicators of equity. Based on the results of the study and statutory criteria, the BTLA will decide whether there is good cause to hold a hearing on the need for a reassessment. If it does decide to hold a hearing, the town will require the notice to be placed in two public places so that taxpayers are aware of the hearing. While the BTLA should follow the established procedures, given that the allegations go to the very integrity of the assessment process, Hanover would be well-served if a hearing were held and these concerns were addressed.
Allobar Strategies provides professional assistance in evaluating the fairness of property tax assessments. If you would like assistance with an evaluation of your property tax, please visit Allobar Strategies or call (603) 333-2211.
The above information is for informational purposes only and does not constitute legal advice.