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A recent sale of property should be considered in determining fair market value.

Petitioner owns a 12.33-acre parcel in the Town of Niskayuna, Schenectady County (the Town). The property was previously used as an adult retirement home that had tax-exempt status. Petitioner bought the property in May 2008 for $3.5 million. Petitioner contracted to resell the property in a simultaneous transaction for $7.5 million, but that sale did not go forward and petitioner retained title.

The Town notified petitioner in November 2008 that the property was no longer tax-exempt and would be taxed for the 2008 tax year on its $3.1 million assessed value. The Town then assessed the property at $3.1 million for the 2009 tax year and $3.5 million for the 2010 tax year. Petitioner appealed to reduce the 2008, 2009, and 2010 assessments.

The trial court dismissed the challenge to the 2010 tax assessment because petitioner failed to comply with New York court rules. The appellate court affirmed this dismissal.

At trial both parties presented expert appraisal reports for the 2008 and 2009 tax years. Both experts used the sales comparison approach and arrived at a value based upon the property's highest and best use as vacant land in transition to retail development.

Petitioner's appraiser valued the property at $1.3 million for the 2008 tax year and $1.4 million for the 2009 tax year. The Town's appraiser valued the property at $3.5 million for both years.

The trial court rejected petitioner's appraisal because it did not account for the recent sale of the subject property. Petitioner's appraiser testified he did not rely upon the recent sale because he believed other factors affected the sale price but did not reference or explain these other factors. The Town's appraiser used the recent sale and determined that sale plus an additional three comparable sales were consistent with a $3.5 million valuation.

The appellate court noted it is well-settled law that the best evidence of value is a recent sale of the subject property. The appellate court affirmed the trial court and the $3.5 million valuation for the tax years in question based on the Town's appraiser's conclusion.

Highbridge Development BR, LLC v.

Assessor of the Town of Niskayuna

Supreme Court, Appellate Division, New York

October 23, 2014

121 A.D.3d 1324

by Alan M. Weinberger, JD, and Megan Murphy, JD

Alan M. Weinberger, JD, has been a professor at Saint Louis University School of Law since 1987. Previously, he practiced for twelve years with law firms in Detroit and Washington, DC, where he specialized in real estate transfer, finance, and development. Weinberger graduated magna cum laude from the University of Michigan Law School. He has published articles and chapters in the fields of real estate finance, partnership, and property law. He Is coauthor of Property Law Cases, Materials and Problems, 3rd ed., published by West Group. His most recent article, "Tools of Ignorance: An Appraisal of Deficiency Judgments," was published in the Spring 2015 issue of the Washington and Lee Law Review. Contact:

Megan Murphy, JD, is an attorney in the Denver law firm of Hackstaff & Snow, LLC. She graduated magna cum laude from Saint Louis University School of Law where she was the Mel Friedman Fellow in Real Estate Law.

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Title Annotation:Recent Court Decisions
Publication:Appraisal Journal
Geographic Code:1U2NY
Date:Mar 22, 2015
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