CMA and Tax Assessment Appeals



Many real estate owners are taking “advantage” of the decline in the real estate market by appealing their current tax reassessment in an effort to lower their tax obligations.  Some owners envision saving money by handling the assessment appeal on their own without resorting to legal counsel or an appraiser.  Some seek opinion valuations from real estate licensees who are not certified appraisers and this presents problems.

Real estate licensees may provide comparative market analysis (“CMA”) only in limited circumstances that include assisting the consumer in determining the amount of an offer or making a listing presentation when there exists an opportunity to secure the listing of that property.  Preparing a CMA for estate or inheritance tax purposes, or as evidence in a tax assessment appeal, are not within the bounds of the CMA related regulations.

There are occasions when an owner seeks only information relating to the sale of comparable property and not a full-blown CMA.  Can a real estate licensee provide data on comparable that are not part of the CMA without violating the law?

The answer: it depends!   Providing comparable is not the same as providing an opinion of value, which will either be an appraisal or CMA.   Licensees should be very careful when providing comparable to an owner for tax assessment appeal purposes.  At the very least, the licensee should include a statement that the data being provided is not intended to be a opinion of value; rather, the data represents what the licensee determined to be reasonable comparable only.  Salespersons who are not also certified appraisers should be very careful and avoid testifying in tax assessment appeals.  Good cross-examination will reveal that a real estate licensee who is not a certified appraiser is not qualified to render to an opinion of value under the circumstances for tax assessment appeal.

Real estate licensees can testify as witnesses with respect to facts and provided they are not also offering an opinion.  The type of facts that may be referenced would include a description of the property, past efforts to market it, time on market, etc.  Rendering an opinion as to value crosses the line.


Copyright © James L. Goldsmith, Esquire, CALDWELL & KEARNS, P.C., 2012

All Rights Reserved

Jim Goldsmith is an attorney with Caldwell & Kearns and serves as general counsel to PAR.  A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees.  He and his firm represent and defend real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. Jim also defends REALTORS® in disciplinary hearings conducted by the Real Estate Commission.  He routinely counsels employers on employee relations issues and is one of the voices of the PAR Legal Hotline. He may be reached at www.realcompliance.com.