Real Estate Tax Appeal Evidence: Admissible in Eminent Domain Case?

by Cory K. Kestner / New Jersey Condemnation Law

Kansas property owner recently challenged the $7.5 million award of court-appointed appraisers in an eminent domain matter, only to have the award reduced to $6.95 million at trial based on evidence of the property’s value from a prior tax appeal.  The owner, KC Mall Associates, filed a motion before the trial began to prevent the condemnor from presenting evidence of a 2005 tax appeal.  KC Mall Associates argued that the tax appeal was filed to force the local government to abide by an assessment freeze as part of a revitalization plan.  The government argued that the tax appeal information was not related to the revitalization plan, and was an admission against interest.  The Kansas Supreme Court found “tax appeal evidence was relevant to—both material to and probative of—the fair market value of the subject property.”

In New Jersey, a property’s assessed value is not admissible as proof of a property’s market value.  However, New Jersey Rule of Evidence 803(b)(2) could permit a valuation report, or other valuation evidence, from a property tax appeal to be admitted into evidence as an admission against interest.  Notably, to be admissible, the rule does not require the statement to have been against the party’s interest at the time that the statement was made.  However, the mere existence of an expert report is insufficient to have it admitted against a party, and the report must have been previously relied upon by the party to qualify as the party’s statement.  See Skibinski v. Smith, 206 N.J. Super. 349, 353-54 (App. Div. 1985).

A copy of the Kansas Supreme Court’s opinion in Kansas City Mall Assoc., Inc. v. Unified Gov’t of Wyandotte County/Kansas City, Kansas, No. 102163 (Mar. 16, 2012) can be found here.

For news coverage of the story, please see the following:

Kansas Supreme Court upholds decision in Indian Springs mall case – Wyandotte Daily News

KCK hopes Indian Springs will be its next success story – Kansas City Star

For more blog posts on expert testimony in eminent domain cases, please see the following blog posts:

Expert’s “Gut Feeling” on Costs Survives Dismissal Claim

Experts’ Opinions on Golf Course Valuation Not Up to Par

Discounted Jury Verdict Upheld on Appeal

Court Disapproves Averaging of Comparable Sales

Originally published by New Jersey Condemnation Law; republished with permission

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