If my association files a tax appeal on behalf of all unit owners in our development, am I at risk of losing my Senior Freeze exemption?
No. The filing of a tax appeal will never cause you to lose the senior freeze. But, it could look that way.
The Senior Citizen Assessment Freeze (the Freeze) provides an exemption (a deduction off the tax bill) for qualifying seniors that is about equal to the increased tax on the home from a base year to the current year using current tax rates. The base year is the year before the senior first qualified for the Freeze. So, this effectively freezes the taxable value (EAV) of the home at the level of the base year. In a rising market, that is a good for taxpayers as their taxes are based on a low value from the past rather than the higher value of the present.
If your Association filed an appeal and the assessment of your property was reduced, but your EAV remained higher than in the base year, you will receive a senior Freeze exemption this year and the tax this year will be the same as it would have been had no appeal been filed.
But, if your Association filed an appeal and the assessment of your property was reduced below the base year EAV, your senior Freeze exemption this year will be $0. This makes it appear as if you lost the Freeze, but that is not the case. If you applied for the Freeze this year on a timely basis, you remain eligible for it even though the exemption amount is $0.
If your assessment (EAV) is reduced below your previously frozen Base, your will receive a new Base that will be adjusted below the old/higher one. Your will continue to enjoy this reduced base for so long as you continue to qualify for the Freeze. In this case, you will benefit from the Association’s appeal for years to come.
Please see the next page for a numerical example of how the Freeze works:
1Assumes the senior first obtained the Freeze in 2010; that the assessment in 2009 was $20,000; that the original Base was 67,402 (2009 assessment of 20,000 x 2009 State Equalization Factor of 3.3701); and, that the new Base has been reduced to 53,471 (2001 assessment of 18,000 x 2011 equalizer of 2,9706). In this case, the Senior Assessment Freeze Exemption is $0 because the Base has been lowered from 53,471 to 67,402.
2Tax Savings from Association Appeal is the difference between your Current Year Tax Bill After Exemptions & Savings With the Assessment Reduction (2,371.43) Current Year Tax Bill After Exemptions & Savings Without the Assessment Reduction (3,131.28). The client received an additional savings of 759.94from the appeal.
What is the difference between the senior exemption and the senior freeze?
The senior exemption and the senior freeze are deductions off of a senior citizen’s real estate tax bill. Here’s how these exemptions work and some of the differences between them.
Real estate taxes are based on the current assessed value of the home. As the value of the home rises, the taxes also rise.
Qualifying seniors receive deductions off their tax bills because they are senior citizens. The senior citizen exemption reduces the tax bill by a sum certain each year. The actual deduction is $5,000 times the local tax rate. So, if the local tax rate is 6%, the senior citizen exemption will be $300.
The goal of senior freeze is to lock the taxable value of the senior’s home.
As the senior’s home value rises, its taxes will also rise. But, senior freeze recipients receive a deduction off their tax bills for the freeze. The senior freeze deduction is an amount large enough so the final tax bill (after the senior freeze exemption) is based on the frozen value and not the current --- and higher --- assessed value. As a result of the senior freeze, qualifying seniors enjoy a much lower tax bill.
Can unit owners opt-out of condominium association appeals?
No, unit owners cannot opt-out of association appeals. But, they can appeal on their own. And, by doing so, they will effectively have opt-out of an association appeal.
The Condominium Property Act allows associations to contest tax assessments “on behalf of all unit owners”. We call these appeals collective appeals. The Condominium Property Act provides as follows:
The Act is mandatory. It doesn’t allow Associations to pick and choose which unit owners to include in an appeal. The Act requires associations to include all unit owners. So, Associations cannot allow owners to “opt-out”. But, every unit owner has the right to appeal its assessment by filing its own appeal.
If the Association files a collective appeal and an owner files its own appeal, most assessing officials will recognize the appeal filed by the unit owner and will remove that unit from the collective appeal.
Other assessors may, however, require the consent of the association’s attorney to remove a unit from a collective appeal.
Elliott & Associates will consent to the removal of a unit owner from a collective appeal.
Therefore, while associations cannot allow a unit owner to opt-out of a collective appeal, any unit can effectively do that by filing an appeal on his or her own.
When should your association pay tax appeal legal fees from your budget and when should you bill back?
Should our association pay tax appeal legal fees from our budget or bill the unit owners back?
This is a business decision for your board. We will tell you what the law says and give you some of the pros and cons of billing back or not.
The Act provides that tax appeal costs are common expenses. This means the Association is entitled to pay these costs from their budget as they would any other association expense.
The Condominium Act provides as follow:
Many associations, however, choose to bill their unit owners for their share of tax appeal costs.
These are some of the reasons why Association might choose to bill back or not. We hope this helps you to make an informed decision.
How do condominium association appeals work?
The Condominium Property Act allows condo boards to appeal tax assessments “on behalf of all unit owners”.
This requires a two-thirds vote of the board or a majority of the unit owners. Most associations obtain authority from their boards.
The Act provides as follows:
Tax appeals can only be filed by a licensed attorney and not by the association, its officers or property managers. The act of filing a tax appeal by a non-lawyer on behalf of a condominium association and/or its unit owners is considered the practice of law.
The attorney will file one appeal on behalf of all unit owners in the development. These appeals are called collective appeals.
The assessing officials prefer collective appeals for a few reasons:
Legal fees and costs incurred in connection with collective appeals may be charged to the unit owners as “common expenses”.
Some associations choose to pay appeal costs from the association’s budget.
Others choose to bill the unit owner for their pro-rata share of these costs.
Why did I get a one-year assessment reduction?
Assessment reductions are generally awarded for multiple years. But, occasionally they may be awarded for one-year only. And, that is not necessarily a bad thing. Here’s how one-year reductions work and why they may actually be a good thing.
Property in Cook County is assessed triennially, meaning once every 3rd year. Once an assessment is reduced, that reduction will typically remain in place for all 3-years of the assessment cycle.
Outside of Cook County, property is assessed quadrenially, or every 4th year and any reduction should benefit the taxpayer for the remainder of the assessment cycle, and maybe longer. That’s because the Assessor adjusts assessments each year by a percentage called a factor. Factors reflect changes in real estate values in the local community. So, when an assessment reduction is awarded one year, it carries forward to all future years of the same assessment cycle because the factor is applied to the reduced assessment rather than the originally proposed/higher one.
In Cook County, the Assessor and Board of Review sometimes mark their reductions as one year only. In those cases, the assessment the following year will be increased to the original level (before the reduction) and the taxpayer will need to appeal again.
The Cook County assessing officials tend to issue one-year reductions when property has
One-year assessment reductions can be substantial and the assessment will often be reduced well below the level of the prior year.
The assessing officials tend to award one-year reductions to help taxpayers who are suffering financially. But, they require the taxpayer to appeal again the following year to prove the hardship continues to exist.
Multi-year reductions, on the other hand, tend to be less dramatic. Usually, an assessment increase is reduced or eliminated and the reduction will carry forward to the rest of the assessment cycle.
One-year assessment reductions often occur in Cook County. And, are a good thing because the assessment is often reduced much more than it would have been had a multiple year reduction been awarded.
Why do PTAB appeals take so long and what does Elliott & Associates do to speed up the process?
PTAB cases can take a year or two or more to resolve. Here are some of the things that cause those delays and what we can do to speed up the process.
The Property Tax Appeal Board has a defined process for handling cases. In a best-case scenario, PTAB cases can be resolved in under 12 months.
Unfortunately, several years ago, PTAB experienced devastating budget cuts that forced them to reduce staff. As a result, fewer cases got resolved each year and the backlog of PTAB cases grew dramatically.
PTAB’s budget has been restored and it has hired additional staff. And, PTAB has been encouraging taxpayers and assessing officials to settle cases. This has caused the PTAB backlog to start shrinking.
PTAB cases for Cook County properties are processed separately from the rest of the State. And, since more cases are filed for Cook than elsewhere, the Cook County backlog is greater.
Here are some of the things Elliott & Associates does to streamline the process.
There are often good reasons why it makes sense to file an appeal to PTAB rather than Court. And, while PTAB cases may take longer to resolve, you may be rewarded for the wait. But, it is important that your attorney knows how to work the PTAB system to streamline and shorten it as much as possible.
Why should I appeal to PTAB versus Court?
There are several reasons why you would appeal to PTAB instead of Court, and vice-versa.
Let us explain what they are.
PTAB is considered to be a poor mans Court. It does not charge a filing fee and is taxpayer friendly.
The burden of proof at PTAB is often lower than the burden of proof in Court. In most PTAB cases, the taxpayer needs to prove its case by a preponderance of the evidence. That means if you put your evidence on the scales of justice with the Assessor’s, you will win if your case is a feather heavier. This is an easier burden of proof.
But, in Court cases, you must prove your case by clear and convincing evidence. That is a much more difficult burden.
PTAB is a great place to be if you want to try your case. They operate under relaxed rules of evidence, while the Court requires strict rules of evidence. This means Court cases are more difficult, and costly, to try. As a result, few Court cases actually proceed to trial.
It is also possible to have PTAB decide your case without a trial. This wills shortcut the process, saving you time and money.
But, in some cases it’s better to appeal to Court ….
There are a number of reasons why you might appeal to PTAB versus Court. We evaluate every case with these reasons in mind. Our recommendation is ultimately based on the facts and circumstances of each case and where we believe our clients will obtain the best, most cost-effective and prompt relief.
Do I need an appraisal?
Appraisals can be useful in winning a tax appeal case. But, they are not always necessary.
Let us explain what we do to avoid incurring un-necessary appraisal costs and when buying an appraisal might be in your best interests.
There are several legal arguments for winning a tax appeal case. These include correcting inaccurate assessment records, proving lack of uniformity of assessment, providng arguments about market value and requesting equitable relief, such as vacancy.
√ Appeals involving inaccurate assessment records and uniformity of assessment claims do not speak to the market value of your property. So, appraisals are not necessary in these cases.
√ Appeals that seek relief for vacancy likewise are not concerned with the market value of your property, and, appraisals are not needed in these cases either.
√ But, in situations where the market value of your property is at issue, an appraisal could help prove what the true value of your property is.
In some cases, we are able to prove market value by submitting documents showing what you paid for your property recently, evidence of comparable sales, or an analysis of the income your property generates (if applicable). In these cases, we can often obtain substantial reductions without incurring appraisal costs.
But, if the case is complicated, the tax dollar dispute is large, or there is no good evidence of value we can put our hands on, it may be advisable – and cost effective – for you to obtain an appraisal.
We always obtain a preliminary value estimate from a licensed appraiser. We then prepare a cost-benefit analysis showing what the appraisal will cost and how much we believe you can save net of all costs.
When we present a cost-benefit analysis to you, the answer will be pretty clear.
In Cook County, how long does the tax appeal process take?
There are several places where a Cook County taxpayer can appeal its taxes to. Each has its own rules and timing. Here is a summary of the process and how long it can take.
There are 38 townships in Cook County. The Assessor opens each for 30-days each year allowing taxpayers to file appeals. The first townships open in late January and the last by early October. The Assessor typically opens 4 to 5 townships each month.
The Assessor decides all appeals in a township about 6 to 8 weeks after the filing deadline.
Then, the Board will open the township for 30-days allowing taxpayers a second opportunity to file appeals. The Board does not usually open until August 1st of each year, so the first filing deadlines occur around that time. Then, later in the appeal season, the Board tends to open a township for filing about 30-days after the Assessor renders his decision.
The Board usually takes 2 to 3 months to complete hearings and render decisions for all appeals in a township.
Taxpayers then have one final appeal opportunity. They can file an appeal to either the Property Tax Appeal Board or the Circuit Court of Cook County.
Appeals to PTAB must be filed within 30-days of the Board of Review’s final decisions for the township.
Appeals to Court must be filed within 5-1/2 months after the second installment tax bill is due.
Appeals to PTAB often take 1 to 3 years to resolve. Some cases, however, get settled and, as a result, are resolved fairly quickly -- in 12 to 18 months. Others proceed to trial and take more time to resolve.
Court cases are usually resolved 18 to 24 months after they’ve been filed. Highly contested cases could take longer.