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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE
TAX COURT COMMITTEE ON OPINIONS
TAX COURT OF NEW JERSEY
DOCKET NO. 006345-94
ADP of New Jersey, Inc. :
Plaintiff, :
v. : Opinion
Parsippany-Troy Hills Tp., :
:
Defendant, :
Decided: October 18, 1994
Gerald F. Spada for plaintiff (Hannoch Weisman,
attorneys; Carl G. Weisenfeld, of counsel).
Robert Fisher for defendant (Dorsey and Fisher,
attorneys).
LASSER, J.T.C.
ADP of New Jersey, Inc. (Taxpayer) contests Taxing District's
motion to dismiss its complaint for failure of its predecessor in
title to furnish income information requested by the assessor
pursuant to N.J.S.A. 54:4-34 (Chapter 91See footnote 1).
Taxpayer timely filed a complaint contesting the 1994 real
property tax assessment on property owned by it at 99 Jefferson
Road, Parsippany-Troy Hills, known as Block 736, Lot 7.4.
Thereafter Taxing District timely filed an answer and counterclaim.
On September 1, 1993, the tax assessor for the Taxing District
mailed to the then owner of the property, PA/First Plaza Joint
Venture II, at its address as indicated on the tax records of the
Taxing District, a request for income and expense information for
the subject property. Included was a letter which recited six
specific types of information required to be furnished within 45
days of the mailing date, a form of annual income and expenses to
be completed and a letter setting forth the text of N.J.S.A. 54:4-34.
The letter was mailed certified mail, return receipt
requested. In evidence is a return receipt signed by Joseph E.
Sciortino, an employee of the Evans Partnership having the same
address as PA/First Plaza Joint Venture II. Mr. Sciortino in a
certification dated July 20, 1994, states that the signature
"appears to be mine" but he has no recollection of having received
the September 1, 1993 letter. A certification by the senior
assistant assessor of the Taxing District states that she
personally arranged for the serving of Chapter 91 notices on owners
of income-producing properties and did so with respect to the
subject property and that the postal receipt indicates a mailing
date of September 1, 1993.
Taxpayer purchased the subject premises from PA/First Plaza
Joint Venture II by deed dated December 1, 1993. The deed was
recorded in the office of the Morris County Clerk on December 3,
1993. The assessor and the senior assistant assessor in their
certifications state that the assessor's office did not receive a
copy of the deed or any notice of the sale until after January 10,
1994, the date that the completed 1994 tax books must be submitted
to the County Board of Taxation.
Taxpayer contends: (1) that the Taxing District has not
established that the request for the income and expense information
was received by the former owner; (2) that the request included a
copy of the statute which erroneously omitted 14 words; (3) that
ADP as owner of the real property did not receive the request to
furnish information, and (4) that the statute as applied violates
constitutional due process by depriving the present owner of the
right to appeal based on the inaction of the prior owner.
The subject statute including the omitted 14 words
(underlined) follows:
Every owner of real property of the taxing
district shall, on written request of the
assessor, made by certified mail, render a
full and true account of his name and real
property and the income therefrom, in the case
of income-producing property, and produce his
title papers, and he may be examined on oath
by the assessor, and if he shall fail or
refuse to respond to the written request of
the assessor within 45 days of such request,
or to testify on oath when required, or shall
render a false or fraudulent account, the
assessor shall value his property at such
amount as he may, from any information in his
possession or available to him, reasonably
determine to be the full and fair value
thereof. No appeal shall be heard from the
assessor's valuation and assessment with
respect to income-producing property where the
owner has failed or refused to respond to such
written request for information within 45 days
of such request or to testify on oath when
required, or shall have rendered a false or
fraudulent account. The county board of
taxation may impose such terms and conditions
for furnishing the requested information where
it appears that the owner, for good cause
shown, could not furnish the information
within the required period of time. In making
such written request for information pursuant
to this section the assessor shall enclose
therewith a copy of this section.
[N.J.S.A. 54:4-34.]
I am satisfied from the proofs that the prior owner received
the assessor's request for information and did not respond to this
request. Taxpayer contends that the difference in the Taxing
District's mailing stickers is a basis for proof of non-service.
I am satisfied that the labels on the card indicating mailing and
the card indicating receipt are the same. The difference in the
Annual Statement sticker does not prove non-service. I also find
that the material submitted to the prior owner informed the prior
owner that failure to comply with the request within the 45 day
period would result in a loss of the right to contest the
assessment, despite the erroneous omission of 14 words in the text
of the statute.
The wording of the statute sent to the owner clearly states
"No appeal shall be heard from the assessor's valuation and
assessment with respect to income-producing property where the
owner has failed or refused to respond to such written request for
information within 45 days of such request ...." Of the two
letters enclosed in the request package the first letter
specifically states that the information must be submitted within
45 days from the date of the letter. The second letter states, "In
the event that you do not furnish the information within the 45 day
period you may be precluded from filing an appeal challenging the
assessment of the property." The second letter further states, "If
you have any questions regarding this request or require
clarification relating to the information sought, please contact
this office for further assistance." It is also clear that the
request related to property of PA/First Plaza Joint Venture II in
Parsippany-Troy Hills located at Block 736, Lot 7.4.
The constitutionality of Chapter 91 has been affirmed in Ocean
Pines, Ltd. v. Point Pleasant Bor., 112 N.J. 1 (1988). Taxpayer
contends that Ocean Pines does not apply in this case because as a
subsequent owner, it did not receive notice of the original request
and, therefore, was denied due process in not being provided an
opportunity to respond. Just as the Ocean Pines' reasonableness
hearing supported due process in that case, the availability of a
reasonableness hearing for ADP will likewise provide it with due
process. Taxpayer's contention that it is denied due process by
the inaction of the prior owner fails because ADP, as purchaser
from the prior owner, stands in the shoes of the prior owner.
Notice to a prior owner is notice to a subsequent owner. The
critical components of due process are adequate notice, opportunity
for a fair hearing and availability of appropriate review.
Schneider v. City of East Orange, 196 N.J. Super. 587, 595 (1984).
If the requirements of due process have been satisfied as to a
prior property owner, then, with respect to local property tax, due
process is satisfied as to a successor in title.
The intention of the statute is to provide a mechanism for the
assessor to obtain income information concerning income-producing
property from the owner of the property. If the owner fails to
respond, the sanction of loss of the right to contest the
assessment for the ensuing year (except for the reasonableness
hearing provided in Ocean Pines, supra) applies to the owner and
all those who stand in the shoes of the owner. This includes
tenants who may be required to pay property tax under net leases,
as well as subsequent purchasers. Here, when the property was
transferred three months after the assessor's request of the prior
owner, it was the obligation of the purchaser to make inquiry of
the assessment status if it intended to protect its right to
contest the 1994 assessment.
Other examples of actions of a prior owner which may affect
the property tax assessment rights of a subsequent purchaser are
found in the application of the Freeze Act (N.J.S.A. 54:51a-7) and
the payment-of-tax requirement (N.J.S.A. 54:3-27 and N.J.S.A.
54:51a-1b). A subsequent owner has the right to apply the Freeze
Act, for a subsequent year, to a judgment obtained by a prior owner
for a prior year and a subsequent purchaser is bound by an
agreement of the prior owner that the Freeze Act would be binding
on both the taxpayer and the taxing district for subsequent years.
Central Bergen Props. v. Elmwood Park,
6 N.J. Tax 495 (Tax Court
1984). Failure of a prior owner to pay property tax will bar a
subsequent owner from contesting the assessment if, at the time
within which the subsequent owner is entitled to file its
complaint, prior taxes are unpaid.
This Court has previously stated that a receiver is barred by
Chapter 91 from contesting an assessment where the prior owner
failed to comply with Chapter 91. In that case the Court stated,
"The Chapter 91 defect runs with the land, it is not personal to
any given owner." Carriage Four Assoc. v. Teaneck Tp.,
13 N.J. Tax 172, 180 (Tax Court 1993).
Property taxes are not a personal obligation of the owner but
are a lien on the property. It is the obligation of a purchaser to
ascertain the facts concerning the property tax and the property
tax assessment on the property that it proposes to purchase and to
protect itself in its agreement with the seller as to any rights
that it may wish to assert with respect to the property tax .
Since the requirements of Chapter 91 with respect to the 1994
assessment were not complied with, the Taxpayer, even though a
subsequent purchaser, is barred from contesting the assessment,
except in a reasonableness hearing provided under Ocean Pines.
Therefore, Taxing District's motion to dismiss the complaint is
granted subject to Taxpayer's right to request an Ocean Pines
hearing.
Footnote: 1 L. 1960, c. 51, §29; L. 1979, c. 91, §1, commonly referred
to as Chapter 91.
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