(US) Property Reassessment is Coming to Washington County, PA

Washington County, Pennsylvania recently concluded its first county-wide reassessment in over thirty-five years, with reassessment values effective for the 2017 tax year.  Property owners will receive two separate notices regarding the new values.

The first notice will be a Notice of Informal Review which will be mailed to property owners starting March 1, 2016.  These notices will be mailed to residential property owners first with commercial property owners to follow.  The second notice will be a formal Change of Assessment Notice which will be mailed to all property owners on July 1, 2016.  Property owners will have 40 days to file a formal appeal from this notice which will be due on August 10, 2016.   The County is considering extending this deadline until September 1, 2016.

You may see significant assessment increases as Washington County currently assesses property at 25% of its market value. Under the new reassessment, a property assessment will reflect 100% of market values.  By example, a property with a market value of $100,000 is currently assessed at $25,000.  As a result of the reassessment, a property with a market value of $100,000 will be assessed at $100,000.

In most cases, millage will decrease, but a property owner should determine:

Is the market value of the property correct?

Property owners have an option to meet with Washington County’s reassessment firm, Tyler Technologies, to informally discuss and review their reassessments between March and June, 2016.  Our experience is that informal reviews only correct property data errors and do not address specific valuation concerns.   If a property owner remains dissatisfied with the results of their informal review, they have the right to file a formal appeal with the Washington County Tax Revenue Department by August 10, 2016.

Property owners electing not to participate in the informal review process do not waive their right to file a formal appeal.   As such, you may bypass the informal review process and file a formal appeal with the Washington County Tax Revenue Department by the same August 10, 2016 appeal deadline.  

Here are some important Washington County reassessment dates

  • March 1, 2016 – Informal review notices to be mailed to property owners
  • March June 2016 – Informal reviews with Tyler Technologies
  • July 1, 2016 – Formal Change of Assessment Notice to be mailed to property owners
  • August 10, 2016 – Formal appeal deadline (deadline may be extended until September 1, 2016)

A property owner receiving a reassessment notice has some decisions to make. Owners should evaluate the following:

  • Is the property data correct  (i.e. land area, building size)?
  • Is the market value fair based on your location (i.e. compared to recent sales in your area)?
  • If the property is rented, is the market value based on the income generated by the property?

Reed Smith is prepared to assist you in evaluating your property for an informal review or a possible appeal.   Please contact us at the email or number listed below to request an evaluation of your property.

Dusty Elias Kirk: dkirk@reedsmith.com, (412) 288.5720
Jeffrey Mills: jmills@reedsmith.com, (412) 288.5724

 

(US) California Real Estate Legislation and Regulation in 2016

In a Law360.com article published on January 4th titled “California Real Estate Legislation and Regulation to Watch in 2016,” Andrew McIntyre of Law360 addresses the challenges facing the California real estate market in the new year.

Here are the items on the 2016 legislative agenda:

  • Proposition 13
  • Bay Area Housing
  • Earthquake retrofitting
  • San Francisco’s Proposition M
  • Overall of CEQA (California Environmental Quality Act)

Simon Adams of the San Francisco office of Reed Smith commented on efforts to overhaul California’s Proposition 13 property tax law. The 1978 law reassesses properties for tax purposes upon sale, as opposed to annually, as is the case in most states. “Every real estate expert will remain focused upon movement in the debate over state Proposition 13 and the chilling effect that this has had over the long term in regard to revenues for the operations of local authorities.”

Developers are against changes to the law, in particular efforts for a so-called split tax roll that would lift Proposition 13 protection from commercial properties while keeping it in place for residential properties. Yet, changes are likely. Simon adds “Some adjustment to the restrictions around the taxing of real property seem inevitable where California continues to expand the population and concurrently increase government services.”

It will take legislative and executive courage to change a law that is considered a “third rail” of California politics.

The full text of the article can be found here.

(US) 4 Areas Of Retail Real Estate To Watch In 2016

In a Law360.com article published on December 23rd titled “4 Areas of Retail Real Estate to Watch in 2016,” Andrew McIntyre of Law360 writes about the changes we will see in retail in the new year.

The four developing areas are:

  • Unlocking Additional Value
  • Moving to Smaller Spaces
  • Opening new categories of restaurants
  • Tinkering with the Apple Store model

Simon Adams of the San Francisco office of Reed Smith commented on the growing trend of retailers to unlock value from their real estate holdings, aided by a broader definition of real property by the Internal Revenue Service. “A retail trend that should come to fruition in 2016 will be the release of capital from certain big-box retailers that have traditionally owned their real estate.”  “The declining brick-and-mortar sales due to online retail completion will result in retailers such as Macy’s and others answering to shareholder pressure to unlock that value.”

McIntyre notes that Sears completed a REIT spinoff in 2015 with the creation of Seritage Growth Properties although Macy’s decided against a REIT creation.

The full text of the article can be found here.

 

 

(US) 4 Common Errors in Year-End Race to Seal Real Estate Deals

In a Law360.com article published on December 17th titled “4 Common Errors in Year-End Race to Seal Real Estate Deals,” Simon Adams of the San Francisco office of Reed Smith offered his thoughts on the risks that appear when speed becomes a requirement of year end deals.

Andrew McIntyre of Law360 identifies the following common errors:

Punting Issues to 2016

Forgetting to Plan for Signings
Simon advises to “not assume your client representatives will be readily available and in an office the day prior to closing when last minute documentation may be signed.” He uses an example where he “has a transaction where a party is due to travel overseas, and so we likely will have the partner take a limited power of attorney.”

Other problems with year end deals include:

Bypassing Bad Boy Carveouts

Skipping Safeguards

Privacy is Paramount

The full text of the article can be found here.

 

(US) New York City’s smallest real estate parcel an historic oddity

On your next visit in Manhattan, go to the corner of Seventh Avenue and Christopher Street.  You’ll be standing on the smallest piece of property in New York City. Hess Triangle is a tiny sliver of real estate in the shape of a triangle, measuring just 25.5 inches at the base and 27.5 inches on its sides.

This quirky property came about as a surveying mistake in the middle of a heated eminent domain battle.

In 1910, the City of New York slated nearly 300 buildings for expropriation and demolition to extend the IRT Broadway – Seventh Avenue Subway Line. David M. Hess, a landlord, owned the Voorhis, a five-story apartment building located within the path of the planned subway extension. He refused the payout and challenged the condemnation action. After years of legal battling, in 1914, the City won and the Voorhis building was demolished.

The survey of the property, however, was discovered later to be inaccurate. This resulted in the Hess estate retaining a tiny triangle of land. When the mistake was discovered, the City asked the family to donate the leftover parcel, but the Hess family, still smarting after losing their legal case, refused.

To make it perfectly clear to the City, on July 27, 1922, the Hess family installed a mosaic proclaiming in capital letters: “PROPERTY OF THE HESS ESTATE WHICH HAS NEVER BEEN DEDICATED FOR PUBLIC PURPOSES.” Taxes were assessed for $100.

 

NYNYChesstriangle_bernstein1

Ownership of the Hess Triangle has changed hands over the years, but the mosaic remains as a testament to the importance of property in the private and public spheres.

It’s also a good remainder to hire counsel well versed in eminent domain proceedings, make sure your surveyor is experienced, and double check your legal descriptions before you record.

To read about other real estate holdouts, check out the following article for a great story on the “Seattle Steadfast” house:

http://99percentinvisible.org/episode/holdout/

More on the Hess Triangle:

http://gothamist.com/2015/04/09/hess_triangle_history.php

Update on Landlords Rights Against Tenants in Administration

We have written before on the subject of Landlords’ remedies when there is a pre-pack administration where a new company is formed to buy the viable part of the business and is put into occupation by the administrators without even prior notice to the landlord let alone landlord’s consent.

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Update on Office Conversions to Residential

The Government has issued a statement on 13 October 2015 confirming that the temporary permitted development right to convert office premises to residential, subject to local authority prior approval of specified matters, is to become permanent.  This was originally introduced as a temporary permitted development right in May 2013 and was due to expire in May 2016.  Continue Reading

CDM Regulations 2015: Have You Appointed Your Principal Designer Yet?

6 October 2015 is the end of the transition period under the 2015 CDM Regulations. See our previous post for more information about the changes. The big issue that the experts have been considering since the Regulations came into force in April 2015 is which of the various professionals engaged in health and safety on construction sites can fulfil the role of principal designer under the new Regulations. Sadly the guidance from the HSE has not made that clear.

What makes the appointment of principal designers difficult is the definition of principal designer captures anyone who prepares or instructs design in the course of its business but they have to be “in control” of the pre-construction period. A company cannot act as principal designer where they were not involved in the project design and multiple disciplinary practices cannot be appointed as principal designer unless their design function has been involved within the relevant project. Our construction team have written a more detailed alert on the issue which can be found here.

 

 

(UK) New Rules for ASTs

The snappily titled Assured Shorthold Tenancy Notice and Prescribed Requirements (England) Regulations 2015 come into force 1st October 2015.

In a nutshell, the landlord of any AST granted from 1 October 2015 onwards must provide the following to the tenant:

  • Government factsheet “How to Rent: the checklist for renting in England”. To ensure you always pick up the latest version go to the government website for the checklist.
  • valid EPC.
  • gas safety certificate.
  • tenancy deposit prescribed information which actually has to be provided within 30 days of receipt of the deposit.

Only item 1 is an entirely new requirement, but the sting in the tail is that failure to provide all of this information to the tenant (later prove that you did so) will prevent the landlord from being able to serve a valid s.21 notice for possession at the end of the term.

It may be prudent to annex the factsheet, EPC and gas safety certificate to the AST signed by the tenant to avoid any later suggestion that the information was not provided at the start of the term.

ESOS Regulations: Are you ready to report?

The Energy Savings Opportunity Scheme Regulations 2014 (“ESOS”) came into force across the UK last July. The purpose of ESOS is to require large businesses to identify energy efficiency savings by carrying out energy audits; ESOS is intended to deliver part of the UK’s 2020 target to reduce energy consumption by 20%. The reality is that ESOS imposes yet another obligation on businesses to calculate their energy usage and report to the regulators that is different to existing reporting obligations such as CRC and the deadline to report is 5 December 2015 which is not long for businesses only starting their compliance now.

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