The generally accepted approaches for establishing property value

By utilizing this firm’s vast knowledge and experience, your appeal case and value estimates will be created by incorporating one or more of the following accepted approaches to value: Income, Market (a/k/a Comparable Sales) or Cost approach.

1. Income Approach: The income approach is typically used for income producing properties and the basic theory relies on the premise that investors and laypersons alike almost exclusively purchase income properties for the income stream they produce and the resulting potential return on investment. The primary steps in the income approach are to determine the potential gross income using actual income or other indicators of income such as comparables or a prospective income analysis. Allowance for vacancies and other variables are applied based on the performance of the subject property as well as other market indicators. Operating expenses are applied using actual expenses at the subject property and/or market expenses for similar properties. The net operating income is calculated by deducting items such as vacancy and operating expenses from the potential or actual gross income. Net operating income is then converted to an indication of market value by dividing it by an applicable capitalization rate. If you are not familiar with the income approach and want to protest an income producing property, it would be in your best interest to hire the Law Office of Todd Miller, LLC to perform an income approach for you.

2. Comparable Sales Approach (a/k/a Market Approach): The Market or Comparable Sales approach is invaluable in nearly every property tax hearing in that comparable sales data provides the adjudicator a direct comparison or reference to other similar properties where a sale has occurred. To perform the sales comparison approach, acquire certain information regarding recent sales of properties similar to your subject property. Most if not all comparable sales must be recent. Dated sales provide little help as the market may have changed since such sales closed. There is no requisite number of comparables you must find but at least three (3) sales generally provide a reasonable range for comparison. Comparable sales information may be obtained from a variety of sources including the assessor/appraiser, property tax attorneys, real estate appraisers, brokers and third party property value vendors.

Inspect and photograph the comparable sales making detailed notes regarding differences between the comparable sales and the subject property. Then make adjustments up or down for differences between the subject property and the comparable properties. For example, if a comparable sale has four (4) stories and the subject property has three (3), make an upward adjustment to the sales price of the comparable sale in order to recognize the additional value of the fourth floor improvements. Of course, if possible, select comparable sales as similar as possible to the subject property to minimize the need for any such adjustments. The Law Office of Todd Miller, LLC has at its disposal a comprehensive comparable sales database for use on your analysis.

3. Cost Approach: Although almost exclusively relied upon by taxing authorities nationwide, the cost approach should be used with caution in that its use is particularly helpful only for newer construction and special use properties in that variables such as depreciation and obsolescence are very subjective. Its strict application for all properties regularly misses the mark. Additionally, its use generally causes the appraiser to rely upon cost manuals or estimator programs produced by third parties to determine the replacement cost new of your property. In their defense, appraisers and assessors often use the cost approach for most properties in that they have access to mass appraisal software and their budgets often don’t provide for personal inspection of each of their numerous properties. This computerized, impersonal form of appraising several properties through data entry regularly relies upon only the cost approach to value.

An appraiser or assessor generally applies the cost approach for a property by adding the market value of the land (typically the purchase price or a comparable land value) to the construction costs for the improvements plus allowances for soft costs and entrepreneurial profit and less amounts for depreciation and obsolescence. If the sum of land and construction cost after application of the above mentioned variables is less than the appraiser’s proposed assessed value, it obviously is to your advantage to provide this information at any hearing to motivate the tax authority to generate a reduction in your assessed value and property taxes.

As a taxpayer, you must take every measure available to you to ensure the taxing authorities reconcile their cost approach value by also applying the other two approaches to value. The vast majority of properties can realize a more accurate appraisal by incorporating and reconciling all three approaches to form a value opinion. The Law Office of Todd Miller, LLC will protect your interests in this regard.

4. Uniform and Equal Approach (Only in certain jurisdictions): This approach relies upon the premise that your property should be valued equal to, or uniform with, a similar property in the same jurisdiction. A uniform or equal approach is very similar to the comparable sales approach. To prepare a protest, gather data on properties similar to the subject property. Make adjustments for significant differences between the comparables and the subject property such as building size, land size, number of bedrooms, number of bathrooms, size of garage, site influences, age, etc… Make upward or downward adjustments to the comparables to address their differences to the subject property.

After applying appropriate adjustments to the comparables, calculate the median level of assessment for all comparables. The median is the middle data point after the adjusted comparables are arranged in order of increasing or decreasing (on a per square foot value basis). Multiply the median per square foot assessed value by the size of your property (improved area) to calculate the value the subject property should be valued.

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Steps to selecting your property tax attorney

The selection of a property tax attorney is terribly important in that property taxes often represent one of largest expenses you or your company will pay this year. To help in the process of finding a reputable property tax attorney, here are a few tips, to wit:

1. Ask for referrals: First ask friends or business associates if they have an experienced property tax attorney for referral such as Todd Miller of the Law Office of Todd Miller, LLC in that like any other important decision, a referral from someone who has enjoyed direct experience and whose judgment you trust is very valuable. But once an attorney has been selected to contact, insist he or she provide you client referrals so that you may candidly discuss how their representation was conducted.

2. Once a list of attorneys is created, immediately schedule an appointment to speak: Regardless of the month, most reputable firms will provide a free initial consultation wherein you may ask an attorney how he or she would approach your particular case. Even if your appeal deadline has just passed, you can begin a subsequent year’s appeal process in earnest.

3. Discuss fee arrangements during the initial interview to clarify the relationship and prevent subsequent anxieties or disputes. Property tax appeals are typically handled on a contingency fee basis; however, some firms like the Law Office of Todd Miller, LLC can create a fee agreement to meet your particular needs. Of course, the most favorable result of a contingency fee arrangement is that any initial call or meeting to discuss your particular situation is without initial fee.

4. Ask for the attorney’s website address then spend a few minutes reading its content for items of interest and the attorney’s experience. In today’s marketplace a website provides you an immediate reference of a firm’s ability to represent your best interests.

5. Don’t be fooled by the number of associations or organizations the attorney is affiliated with in that they are often merely resume builders and warrant very little of your attention. Additionally, don't be fooled by advertising slogans or large offices as they are often a reflection of high overhead costs and the need for high fees. Instead, meet or phone the attorney and decide if you have confidence in his or her skills and ability to understand your particular needs.

6. Ask which attorney will work on your case if you hire the firm, and what their particular experience level is; what portion of work will other people be doing, and what will be the attorney's participation in your property tax appeal? Does the attorney attend all the hearings? If not, does the attorney assign this task to non-lawyers, as he or she is authorized to do in most jurisdictions? At the Law Office of Todd Miller, LLC, Mr. Miller personally participates in every case.

7. Discuss the facts of your particular case in your initial meeting or telephone interview with the attorney and make sure he or she has the time to represent your interests as dates and deadlines are critical to all property tax appeals. Additionally, the attorney should be able to discuss in general terms how he or she will proceed and how your tax appeal will be handled.

8. Inquire about the firm’s communications with its clients and what the attorney's policy is regarding apprising you of your property tax appeal’s progress.

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Todd Miller is an experienced property tax attorney and a former tax senior consultant with Deloitte & Touche’, LLP wherein he directed its national golf course representation group, Golftax. Mr. Miller created the firm in 2006 and now represents a wide variety of commercial, institutional, high-end residential, agricultural and municipal taxpayers at BOE and VAB proceedings throughout the nation. Mr. Miller handles both valuation and legal claims.

Mr. Miller has several years of property tax experience involving appeals throughout the nation. He has filed property tax appeals in twenty-one (21) states and enjoys a very successful property tax reduction rate in each state. Additionally, Mr. Miller has personally presented oral arguments in front of property tax tribunals in fourteen (14) states.

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Why the law office of Todd Miller, LLC for your property tax administration?

In order to protect your bottom line, the Law Office of Todd Miller, LLC will perform a free analysis of your property to determine if an appeal is warranted. The firm will coordinate the entire appeal process from site inspections, when necessary, to case preparation and appeal filing right down to personal representation at both informal and formal property tax hearings. Of course, each appeal is filed with your express authorization and only when warranted in order to protect your best interests and any established relationships, exemptions or abatements that may be pertinent to your property.

Property taxes are often one of the three (3) largest annual facility expenses you or your company must pay annually and as you can imagine, this tax is not likely to be reduced or remain flat by taxing authorities without constant and annual, professional review of your proposed tax values. As you know, it is your diligence to pay only the appropriate amount of property taxes that allows you to remain competitive in your particular marketplace. The most significant opportunity for decision makers of commercial, industrial and residential properties to reduce their property tax burden is to appeal overestimated real property tax valuations and personal property tax valuations when necessary. Your diligence must be constant in that depending upon your particular jurisdiction’s tax codes, your review and/or appeal of proposed property valuations may occur annually in that in some jurisdictions, property assessments increase substantially every year.

The Law Office of Todd Miller, LLC Will Represent Commercial, Industrial and Residential Properties

While the firm usually represents properties with a value of $1 million and above, it has been very successful working with lesser valued properties. In particular, the firm will work with all types of income producing commercial properties such as:

• Apartment complexes
• Hotels
• Office buildings and warehouses
• Manufacturing plants
• Car dealerships
• Golf courses
• Banks
• Restaurants
• Many others

WHAT SETS THE LAW OFFICE OF TODD MILLER, LLC APART?

1. Personal Attention:

Our clients attribute this firm’s success to personalized service, aggressive negotiating skills, attention to detail, and an extensive database of information from brokers, property managers, clients and outside services. Unlike some firms that "mass produce" valuations or seek to represent every available client, this firm limits its clients and properties so it will have time to pursue creative ways serve its clients such as to analyze each property's valuation and produce results, all the while establishing long-term business relationships.
 
In addition to property tax appeal representation, the firm also provides the following property tax services:

A. Due diligence services relating to the prospective purchase and sale of properties;
B. Valuation estimates of properties and those of the competition;
C. Services to ensure your property taxes are paid in a timely manner thereby avoiding unnecessary interest and penalties.
D. Expert Testimony

2. Reasonable Fee Terms:

1. Contingency Fee: The Law Office of Todd Miller, LLC represents clients pursuant to a contingency fee agreement in that this term is generally thought to be the most advantageous term to our clients who have injuries or property tax complaints. Pursuant to the contingency fee agreement, our firm’s fee is derived solely from the tax savings we deliver to our clients.

2. Fixed or Flat Fee: The client pays a specific fee for the representation.

3. Combination Fee: For those property tax clients who still prefer a results oriented fee arrangement but want to lessen the impact of the fee in any one year, our combination fee arrangement offers a fixed fee plus a lower than normal contingency fee.

3. Unique Real Property Services:
The Law Office of Todd Miller, LLC comprehensively protects your real property tax liabilities by:

• Filing necessary real property tax returns and fulfilling tax authority information requests per jurisdictional requirements, all the while researching each respective taxing jurisdiction’s assessment procedures and protecting valuable and established relationships with taxing authority personnel;
• Protesting and/or appealing overvalued assessments timely using negotiation, appeal and litigation techniques where necessary;
• Reporting details of tax savings and results to our clients;
• Verifying property tax bills in a timely manner, or in the alternative, forwarding property tax bills should the client desire our firm to receive them directly;
• Budgeting and estimating future property tax liabilities when possible.

4. Reliable Personal Property Services:

A. Pre-Rendition Services:

Because personal property clients require form preparation and submittal skills, our pre-rendition personal property services include multiple steps even before we submit returns to a taxing authority. Such planning and preparation provide the following benefits to our clients:

• Early communication, generally prior to or immediately after the receipt of a Notice of Value, allows the taxing authorities to be more flexible in that they have not yet posted an assessment or tax dollar figure to your asset base. This critical step provides more time to work with the taxing authority’s offices and establishes a working relationship when none exists, or in the alternative, protects established relationships with those important personnel;
• Understand, identify, document and demonstrate assets as they relate to taxable or non-taxable statutes;
• If requested and warranted, we will travel to a particular facility for on-site evaluations.

B. General Personal Property Tax Services:

• Gather pertinent information from client regarding their properties;
• Research taxing jurisdiction's assessment procedures;
• Open dialogue with local tax assessor/appraiser;
• Evaluate client's existing reporting methods;
• Evaluate total asset listing
  • Life assets;
  • Remove disposed assets;
  • Evaluate current year additions;
  • Identify non-taxable assets;
  • Value taxable assets;
  • When applicable, communicate with individual department(s)/location(s) to determine status of existing capitalized assets.
• Evaluate lease agreements for potential tax savings;
• Discuss our valuation approach with the local tax assessor/appraiser;
• File returns timely;
• Review proposed assessments for accuracy;
• File timely appeals when necessary and subject to client approval;
• Generate tax bill approval.

C. Personal Property Fees:

• Cost Reduction and/or Appeals = Contingency Fee
• Audit or General Consulting = Time and Expenses
• Compliance = Flat Rate

Evaluating Your Property

The Law Office of Todd Miller, LLC, if necessary, will inspect and compare the physical characteristics of your property with that described on the taxing authority’s records for accuracy. In the event there is a mistake in the taxing authority’s records for your property, value changes should be made by filing an appeal. Often, the firm will also conduct a physical inspection of your property in that a close examination confirms or calls into question the depreciation and obsolescence variables used by the taxing authorities.

Once the firm’s free value opinion is established, the firm will determine if an appeal is justified and then seek your express authorization prior to filing timely. Generally, the Law Office of Todd Miller, LLC seeks informal discussions, presentations and negotiations with the appropriate taxing officials prior to either informal or formal hearings in order to expedite the process and/or to protect any established relationship you may have already enjoy with these parties. The firm will also provide the timely filing of forms taking into account your deadlines and it regularly report to our clients the status of their appeals as the processes play out.

To learn more about how our firm can increase your bottom line, contact Todd Miller at the Law Office of Todd Miller, LLC today for a free consultation (573) 634-2838.

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