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The Maricopa County Assessor’s Office is responsible for assessing the property values of every property within the county’s boundaries. Their valuation appraisals determine individual and business property taxes, and, in the context of eminent domain, the compensation amount offered by the government. So, who is behind the entity that is deciding the worth of your property?

The County Assessor’s Office consists of the appointed County Assessor, Keith E. Russell, his leadership staff, and other employees, and is authorized to compute the Full Cash Values and Limited Values of all taxable properties. To insure that all properties have been assessed, the Assessor and his staff use aerial photographs, state land maps, GIS mapping, and appraiser canvasses. There are five County Assessor Offices in Maricopa County, two in Phoenix, with the others in Mesa, Sun City, and Sun City West.

While the Mission Statement of the County Assessor’s Office, as stated on their website, proclaims an attempt to “efficiently and effectively administer all laws and regulations to Maricopa County property owners” so that all taxed “property is fairly and equitably valued,” Full Cash Values of properties are often incorrectly estimated. If the Assessor’s Office determines your property value too high, your property tax will follow suit, forcing you to pay more than you should. On the contrary, if your property is valued too low, you would receive unfair ‘just compensation’ if faced with eminent domain.
If you have been faced with eminent domain and the government has proposed a monetary offer for a property in your ownership, it is crucial that you precisely evaluate their offer before accepting it. If the offer seems even slightly less than you would have expected, making a counter-offer is something to seriously consider. In most cases, property owners will receive greater compensation after filing a claim against the condemning agency’s offer in an eminent domain proceeding. Keep in mind: appraisers often differ in their opinions of a property’s value by thousands or tens of thousands of dollars, so hiring a professional appraiser, such as an eminent domain attorney, is essential to your case.

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You do have the right to challenge the condemnation; but, it is unlikely that you will succeed.  The Arizona Constitution grants to the State the power to condemn privately owned property (the State may also delegate this power to other governmental agencies and to some private entities, as well).  This right to take private property is referred to as the power of eminent domain.  In order to exercise this power, the government must demonstrate a “public use and necessity” for its taking of your land.  The government’s decision on this issue – that the land is needed for public use and is necessary for the public project, may be challenged in court.  However, the government’s decision is given deference by the courts, and there are deadlines and procedures that must be satisfied.

Practically speaking, challenges against the government’s right to take have largely been unsuccessful in Arizona. The proposed projects are typically for a clear “public use” and the project cannot be completed without the land. Examples might include public roads, schools, parks, etc.  In these situations where the public use and necessity are clear, the battle shifts to the property owner’s right to receive just compensation – being paid fair and adequate money for the land taken and related damages, if any. This is a specialized area and property owners facing the condemnation of their property should consult an attorney.
As construction on the Mesa light-rail extension project is set to begin in 2013, many private businesses and property owners will be facing efforts by the City to acquire all or part of the impacted properties. The 3.1 mile extension into downtown Mesa is clearly a public project, thus appropriate for using the power of eminent domain to acquire the land needed for the project from private owners. This is in contrast to the City’s attempts several years ago to improve the downtown corridor. In April of 2002, an Arizona judge’s ruling allowed the City to seize Bailey’s Brake Shop, a family-owned business, operating in the same location for over 30 years. The City wanted to sell Randy Bailey’s property to an Ace Hardware store, failing to acknowledge that it is against the Constitution to take property from one private owner and give it to another private owner. However, the City argued that they were seizing the property for redevelopment on the claim that the property was blighted and that redevelopment of the property was necessary in the interest of public welfare.

The Institute for Justice Arizona Chapter represented Randy Bailey in an appeal, and on October 1, 2003, the Arizona Court of Appeals ruled against the City of Mesa’s use of eminent domain, protecting Bailey’s Brake Shop from seizure. The Arizona Court of Appeals overturned the earlier decision, stating that the taking was not proper. The opinion went on to outline a series of questions to be considered when evaluating if a taking is truly for a public purpose. Accordingly, cases like Bailey’s Brake Shop are not likely, but the potential for abuse still remains.
Division 1 of the Arizona Court of Appeals recently issued a decision in Roofing Wholesale Co., Inc. v. Neil, 2012 WL 1207349 (Ariz.App.Div.1) (2012). The decision was not approved for citing as a legal precedent except under limited conditions. Regardless, the opinion gives insight into how the Court of Appeals views the issue of tax appeal information being offered as evidence in a fair market valuation hearing.

The Court was presented with the issue of whether a trial court may properly admit evidence of a property owner’s “admissions” made in a tax protest in order to establish fair market value under A.R.S. §33-814, Arizona’s deficiency statute. The Court of Appeals declined to follow the decision of the Arizona Supreme Court in Salt River Project Agricultural Improvement and Power District v. Miller Park, L.L.C., 213 Ariz. 246 (2008) because Arizona deed of trust law (A.R.S. §33-814), according to the court, “does not demonstrate a legislative intent to adopt the highest and best use standard in a fair market valuation proceeding under the deficiency statutes.”

This opened the door for use of evidence from the property tax appeal in a fair market value proceeding under the deficiency statute. The Court’s reliance on the lack of an express adoption of the valuation principle, highest and best use, is puzzling. A property’s available uses or reasonably probable uses, at the time, drive its value in the market.

What the Court was possibly trying to reach was a standard that a trial court, which is tasked with determining value as of the date of the trustee’s sale, is not bound by a particular method to determine value. For example, the court explained that a judge may properly consider “various factors appearing in the testimony in any combination which is reasonable.” Whether it realized it or not, highest and best use will inevitably be a part of a proper analysis.

The use of valuation methods in eminent domain proceedings or deficiency actions requires experience with valuation theories and evidence laws. If you or anyone you know may be facing eminent domain or a valuation of real property, I urge you to meet with an experienced Arizona eminent domain attorney that can help you understand your options. Protect your property rights by calling (480) 464-1111 to set up a consultation.
Do you know the current fair market value of your home? Unless you have had a professional assessment of your property’s value within the past year, I highly suggest that you schedule one.

It’s common knowledge that real estate values in the United States have dropped dramatically during our country’s recent economic struggles. Ironically, as property values have dropped, property taxes have actually increased. This is a concerning statistic, considering that property taxes are equated using property value.

If you own property, you should receive a Notice of Value card in the mail by March 1. The card will list your property’s assessed Full Cash Value and its Legal Classification (a property’s Legal Classification refers to how the land is being used. Classifications include commercial, residential, agricultural, etc.). If you believe the Full Cash Value or the Legal Classification to be incorrect, you can file an appeal either with the County Assessor’s Office or with the Tax Court.

According to the Official Blog of the National Taxpayers Union, GovernmentBytes, “up to 60 percent of the nation’s taxable property may be over-assessed, leaving property owners to pay thousands of dollars more than they need to.” Prepare yourself to file an appeal if necessary by hiring a professional to correctly appraise your property’s current value. In order to insure that your appeal is successful, it must be filed as quickly as possible upon receiving your Notice of Value.

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