PA Supreme Court Decision Could Impact Future of Tax Assessment Appeals
In early April, we discussed the pending Pennsylvania Supreme Court ruling in the Valley Forge Towers Apartments N, LP, et al, v. Upper Merion Area School District, et al, case (the “Valley Forge Case”), where the Pennsylvania Supreme Court was presented with an opportunity to shed light and provide direction on the lawfulness of a growing pattern of property assessment appeals of commercial properties initiated by school districts across the state that were being challenged by the affected property owners as unconstitutional. In their challenge, the Valley Forge Case property owners (made up of large apartment complexes) argued that they were being unfairly selected for reassessments because Pennsylvania law requires uniformity, and the school district was not seeking to reassess single-family residences. The property owners alleged the school district was motivated by claims that single-family homes were owned by school district residents subject to property taxes, while the tenants at the apartment complex were not residents and did not directly pay property taxes, and thus the school districts assessment challenges were an attempt to increase revenue while avoiding political accountability.
On July 5, 2017, the Pennsylvania Supreme Court issued an Opinion remanding the dispute back to the Montgomery County Court of Common Pleas and directing the Court to consider the merits of the property owners’ constitutional challenge rather than dismiss the property owners’ case on procedural grounds (which the County Court had done and which prompted the property owners’ appeal to the Pennsylvania Commonwealth Court and then the Pennsylvania Supreme Court). In remanding the case, the Supreme Court noted many flaws in the school district’s arguments and reminded the parties (as well as the lower Courts) that all real estate is to be viewed as a single class entitled to uniform treatment and should be protected from intentional or systematic enforcement of the tax laws. The Supreme Court also made clear that while a school district has a statutory right to challenge tax assessments; it may not do so in a way prohibited by the uniformity clause of the Constitution. Accordingly, the County Court will now consider the merits of the property owners’ claims with guidance from the Supreme Court as to the scope of a school district’s authority and the parameters of the Uniformity Clause of the Pennsylvania Constitution.
Attorney Jack Gross is a real estate attorney, counseling buyers and sellers in residential and commercial real estate transactions and zoning matters as well as tax assessment matters. He is a licensed title agent in the state of Pennsylvania.
Attorney Sam Cohen is a litigation attorney who has represented property owners in land ownership, tax assessment, and zoning matters before local and state courts as well as municipal boards.