When Robyn Sachs received the 2018 property tax assessment on her 4,500 square foot office condominium, she was astounded. Sachs, the president of RMR & Associates, a public relations agency in North Bethesda, was notified that her real estate taxes were being raised by a whopping 51 percent from the previous year. She attributed this to the newly built, upscale Pike and Rose office and retail complex located close by on Rockville Pike.
Luckily for Sachs, she had heard about what the realty firm Rory S. Coakley Inc. could do in the way of appealing this new tax, and she benefited from the unique service they offer. Coakley Realty is a full-service residential and commercial real estate company and their signs can be seen all over Maryland, D.C. and Virginia. They started offering real estate tax appeals in 1989 for both residential and commercial properties and have been busy ever since, saving millions of tax dollars for the clients in the process. According to Coakley, hiring a real estate firm to help with property tax appeals is a great option because these appeals often require some measure of negotiation and also require local market knowledge, all attributes of a good real estate consultant.
With assistance from Rachel Griffin, her firm’s operations manager, Sachs contacted Coakley’s office with their assessment notice. Coakley agreed to review the tax assessment at no charge to decide if an appeal was in order. This included comparing her office town house to comparable town houses in her community and determining what the properties were selling for. Coakley’s office promises not to charge clients until a successful appeal is negotiated and then they charge only a portion of what they save a client in their tax bill. In Sachs’ case the outcome was worth the effort – Coakley managed a thirty percent reduction in the tax amount Sachs had to pay.
Ultimately Sachs’ says that “using Coakley was hugely beneficial to us.” Not only did they save her money but they communicated what was ongoing and “kept me informed every step of the way.”
Chip Mitchell, the chief operating officer of the Kirlin Group, a privately owned construction company, has had a long-standing professional relationship with Coakley Realty. He reports that the team has represented Kirlin in their tax assessment appeals for seven different appeals. He describes them as “very efficient, they know the landscape in and out, up and down.” He adds that they really know how the appeals process works. Kirlin leased a 97,000 square foot building in Rockville and another 75,000 pre-fabricated building in Derwood. In both properties, their tax appeals reduced their tax assessments by approximately ten percent. In addition, Rory S. Coakley and Joe McLeod, his associate, estimated the final tax assessment after each appeal within a few hundred dollars of the final tax bill.
Coakley makes a good case for property owners to hire an experienced consultant if they feel their real estate tax assessment is higher than it should be. He notes that the tax assessment process varies by state and county and it is important to understand the appeals process. This is a good argument for hiring an expert with knowledge of appraisals, state and local mandates, approaches to valuation and negotiation techniques.
Another interesting wrinkle is the expert’s knowledge of individual assessment offices. For instance, Coakley reflects that the assessment office is often overworked or understaffed. According to him, “It’s easy for assessors to make mistakes when assessing thousands of properties each year.” He adds that “Your property or neighborhood may have unique conditions that affect its value that the tax assessor is not aware of. Human error could inflate property assessments. Filing a property tax appeal allows you to request that the assessor take a closer look at your property’s value using the data you provide.”
Another important fact is that common reasons to appeal include a lack of uniformity, market changes or a recent purchase, all facts that a skilled tax adviser can utilize. Because tax appeals are often negotiations, understanding the assessment office’s techniques can give you a leg up.
In Maryland tax assessments are prepared for one-third of the state’s property owners every three years and the next round of reassessments in Maryland are sent out in December. If someone is allowed to appeal it can affect his taxes for the next three years. In Maryland the appeal must be filed within 45 days of the date of the new assessment notice.
Today’s climate makes hiring an expert to file one’s property tax appeal even more relevant when an increasing number of property owners are looking to save money. Sachs says she knows at least twenty business owners and “every single one of them is rethinking what they are going to do with their office space when their lease comes up.” “This time is going to be called coronavirus Armageddon,” she laughs. Business journals write about certain companies not paying their rent, people being laid off and many employees finding they prefer working remotely, even part-time, than trudging into an office every day.
Mitchell concurs that the next round of assessments is going to be fascinating to watch, with the amount of space available, the glut of properties on the market and rents really dropping. Time will tell, but without a doubt Rory S. Coakley and his firm will be ready for the challenge.
For a free property tax review call (301) 340-8700 (ext. 1101) or email Rory@CoakleyRealty.com