NOT FOR PUBLICATION WITHOUT APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS
TAX COURT OF NEW JERSEY
Mala Sundar R.J. Hughes Justice Complex JUDGE P.O. Box 975 25 Market Street Trenton, New Jersey 08625 Telephone (609) 815-2922 TeleFax: (609) 376-3018 taxcourttrenton2@judiciary.state.nj.us February 26, 2018
BY FIRST-CLASS MAIL Chaim Gulkowitz, Self-Represented Lakewood, New Jersey
UPLOADED Lani Lombardi, Esq. Cleary Giacobbe Alfieri Jacobs, L.L.C. 955 State Route 34, Suite 200 Matawan, New Jersey 07747
Re: Gulkowitz v. Township of Lakewood Block 11.11, Lot 87 (18 Queens Court) Docket No. 010328- 2017
Dear Mr. Gulkowitz and Counsel:
This letter constitutes the court’s decision following trial of the above captioned matter.
Plaintiff owns a residence, the above-captioned property (“Subject”), in defendant (“Township”).
For tax year 2017, plaintiff petitioned the Ocean County Board of Taxation (“County Board”),
which reduced the Subject’s local property tax assessment from $452,100 to $442,000. 1 Plaintiff
timely appealed the County Board’s judgment to this court.
The Subject is a single family residence which plaintiff purchased June 2015 for $390,000.
Plaintiff claimed he paid the asking price since his family wanted his mother-in-law to move to a
1 For tax year 2017, the Township underwent a district-wide revaluation.
* home that is close to plaintiff’s home (plaintiff and his wife own another property in the same
neighborhood at 17 Queens Court). The sale was by owner (thus, not listed on the multiple listing
services). The Subject is a two-story colonial style residence with three bedrooms and two full
bathrooms, an unfinished basement, a one-car garage an in-ground pool, and a porch. Built in
early 1990’s, it is dated with a gross living area (“GLA”) is about 1,900 square feet (“SF”). As of
October 1, 2016, it was being rented on a short-term basis (for about $1,800 to $2,000 without
utilities) since his mother-in-law has yet to move in.
Plaintiff relied upon four comparables, including the Subject, all of which were in the
Township, and two in the same development. His data source was the County Board’s website.
Address Built GLA Sale Sale Room Count Other Date Price 1 Subject 1992 1,900 SF 06/11/15 $390,000 3 beds; 2 baths Unfin. Basement; In- ground pool; porch; Attached one-car garage 2 101 Van 1978 1,920 SF 09/04/15 $395,000 5 beds; 3 baths Pool. Buren 3 5 Miller Rd 1973 2,100 SF 07/07/16 $340,000 5 beds; 2 baths
4 36 Leigh Dr 1966 2,104 SF 05/27/16 $220,000 4 beds; 2 ½ Basement; pool. baths
Plaintiff had personally visited Comparable 2, which he conceded was a bi-level, thus, his
assumption that it had a basement could be mistaken. While he felt that the lot size was somewhat
smaller than the Subject’s, he did not know it was about half the size. Comparable 3, he conceded,
was on a busy street as compared to the Subject’s quiet and residential street. While he stated that
from the outside, it looked to be a two-story home similar to the Subject, he stated that he would
not be surprised if it were a bi-level, and if so, would not have a basement. He did not know that
Comparable 4 was marked as a non-usable (“NU”) sale with Code 26. He agreed that there were
other sales closer to the assessment date, but felt that the Subject’s purchase price along with the
2 sale price of Comparable 2, which he claimed was the most similar to the Subject in terms of GLA
and amenities, should suffice as evidence to reduce the assessment to $390,000.
FINDINGS
“Original assessments and judgments of county boards of taxation are entitled to a
presumption of validity.” MSGW Real Estate Fund, L.L.C. v. Borough of Mountain Lakes, 18
N.J. Tax 364, 373 (Tax 1998). “Based on this presumption, the appealing taxpayer has the burden
of proving that the assessment is erroneous.” Pantasote Co. v. City of Passaic, 100 N.J. 408, 413
(1985). “The presumption of correctness . . . stands, until sufficient competent evidence to the
contrary is adduced.” Township of Little Egg Harbor v. Bonsangue, 316 N.J.Super. 271, 285-86
(App. Div. 1998).
A taxpayer can rebut the presumption by introducing “cogent evidence” which is evidence
that is “‘definite, positive and certain in quality and quantity.”’ Pantasote, 100 N.J. at 413 (citing
Aetna Life Ins. Co. v. Newark, 10 N.J. 99, 105 (1952)). Plaintiff must present the court with
“evidence sufficient to demonstrate the value of the subject property, thereby raising a debatable
question as to the validity of the assessment.” MSGW, 18 N.J. Tax at 376. Disagreement with an
assessment must be based on “‘sound theory and objective data rather than on mere wishful
thinking.”’ Ibid. (internal quotation marks omitted).
If the court decides that the presumptive correctness is overcome, it can find value based
“on the evidence before it and the data that [is] properly at its disposal.” F.M.C. Stores Co. v.
Borough of Morris Plains, 100 N.J. 418, 430 (1985). The complainant bears the burden of
persuading the court that the “judgment under review” is erroneous. Ford Motor Co. v. Township
of Edison, 127 N.J. 290, 314-15 (1992).
3 If, at the close of plaintiff’s proofs, the court is presented with a motion to dismiss under
R. 4:37-2(b), in evaluating whether plaintiff’s evidence meets the “cogent evidence” standard, the
court “must accept such evidence as true and accord the plaintiff all legitimate inferences which
can be deduced from the evidence.” MSGW, 18 N.J. Tax at 376. If the court decides that the
plaintiff did not overcome the presumptive correctness, then the assessment should be affirmed.
Ibid. Thus, if a party has not met this burden, the trial court need not engage in a further evaluation
of the evidence to make an independent determination of value.
The market approach (or using comparable sales) is the generally accepted appraisal
methodology to determine value of residential homes. See Appraisal Institute, The Appraisal of
Real Estate 377 (14th ed. 2013) (the comparable sales method is generally appropriate for valuation
of a residential property where value is derived “by comparing similar properties that have recently
sold with the property being appraised, identifying appropriate units of comparison, and making
adjustments to the sales prices . . . of the comparable properties based on relevant, market-derived
elements of comparison”). Market evidence must support any element of comparison that causes
“value differences.” Id. at 378.
Plaintiff’s comparables are problematic as credible indicators of the Subject’s value. Two
of them were bi-level, thus, not the same style as the Subject. Styles can affect the sales prices, as
well as the buyer-pool (thus, the market). Both those comparables did not have a basement. All
three comparables were much older compared to the Subject. The lot size of comparable 2, which
plaintiff felt was most similar to the Subject, was half that of the Subject. Comparable 3 was on a
busy street unlike the Subject. Twwo comparables which plaintiff felt were the best value
indicators (the Subject and comparable 1), sold a year to a year and one half before the assessment
date. While it is not unreasonable to choose these as indicators of market value due to the
4 proximity of location and GLA similarity, plaintiff agreed that there were sufficient sales in 2016.
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NOT FOR PUBLICATION WITHOUT APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS
TAX COURT OF NEW JERSEY
Mala Sundar R.J. Hughes Justice Complex JUDGE P.O. Box 975 25 Market Street Trenton, New Jersey 08625 Telephone (609) 815-2922 TeleFax: (609) 376-3018 taxcourttrenton2@judiciary.state.nj.us February 26, 2018
BY FIRST-CLASS MAIL Chaim Gulkowitz, Self-Represented Lakewood, New Jersey
UPLOADED Lani Lombardi, Esq. Cleary Giacobbe Alfieri Jacobs, L.L.C. 955 State Route 34, Suite 200 Matawan, New Jersey 07747
Re: Gulkowitz v. Township of Lakewood Block 11.11, Lot 87 (18 Queens Court) Docket No. 010328- 2017
Dear Mr. Gulkowitz and Counsel:
This letter constitutes the court’s decision following trial of the above captioned matter.
Plaintiff owns a residence, the above-captioned property (“Subject”), in defendant (“Township”).
For tax year 2017, plaintiff petitioned the Ocean County Board of Taxation (“County Board”),
which reduced the Subject’s local property tax assessment from $452,100 to $442,000. 1 Plaintiff
timely appealed the County Board’s judgment to this court.
The Subject is a single family residence which plaintiff purchased June 2015 for $390,000.
Plaintiff claimed he paid the asking price since his family wanted his mother-in-law to move to a
1 For tax year 2017, the Township underwent a district-wide revaluation.
* home that is close to plaintiff’s home (plaintiff and his wife own another property in the same
neighborhood at 17 Queens Court). The sale was by owner (thus, not listed on the multiple listing
services). The Subject is a two-story colonial style residence with three bedrooms and two full
bathrooms, an unfinished basement, a one-car garage an in-ground pool, and a porch. Built in
early 1990’s, it is dated with a gross living area (“GLA”) is about 1,900 square feet (“SF”). As of
October 1, 2016, it was being rented on a short-term basis (for about $1,800 to $2,000 without
utilities) since his mother-in-law has yet to move in.
Plaintiff relied upon four comparables, including the Subject, all of which were in the
Township, and two in the same development. His data source was the County Board’s website.
Address Built GLA Sale Sale Room Count Other Date Price 1 Subject 1992 1,900 SF 06/11/15 $390,000 3 beds; 2 baths Unfin. Basement; In- ground pool; porch; Attached one-car garage 2 101 Van 1978 1,920 SF 09/04/15 $395,000 5 beds; 3 baths Pool. Buren 3 5 Miller Rd 1973 2,100 SF 07/07/16 $340,000 5 beds; 2 baths
4 36 Leigh Dr 1966 2,104 SF 05/27/16 $220,000 4 beds; 2 ½ Basement; pool. baths
Plaintiff had personally visited Comparable 2, which he conceded was a bi-level, thus, his
assumption that it had a basement could be mistaken. While he felt that the lot size was somewhat
smaller than the Subject’s, he did not know it was about half the size. Comparable 3, he conceded,
was on a busy street as compared to the Subject’s quiet and residential street. While he stated that
from the outside, it looked to be a two-story home similar to the Subject, he stated that he would
not be surprised if it were a bi-level, and if so, would not have a basement. He did not know that
Comparable 4 was marked as a non-usable (“NU”) sale with Code 26. He agreed that there were
other sales closer to the assessment date, but felt that the Subject’s purchase price along with the
2 sale price of Comparable 2, which he claimed was the most similar to the Subject in terms of GLA
and amenities, should suffice as evidence to reduce the assessment to $390,000.
FINDINGS
“Original assessments and judgments of county boards of taxation are entitled to a
presumption of validity.” MSGW Real Estate Fund, L.L.C. v. Borough of Mountain Lakes, 18
N.J. Tax 364, 373 (Tax 1998). “Based on this presumption, the appealing taxpayer has the burden
of proving that the assessment is erroneous.” Pantasote Co. v. City of Passaic, 100 N.J. 408, 413
(1985). “The presumption of correctness . . . stands, until sufficient competent evidence to the
contrary is adduced.” Township of Little Egg Harbor v. Bonsangue, 316 N.J.Super. 271, 285-86
(App. Div. 1998).
A taxpayer can rebut the presumption by introducing “cogent evidence” which is evidence
that is “‘definite, positive and certain in quality and quantity.”’ Pantasote, 100 N.J. at 413 (citing
Aetna Life Ins. Co. v. Newark, 10 N.J. 99, 105 (1952)). Plaintiff must present the court with
“evidence sufficient to demonstrate the value of the subject property, thereby raising a debatable
question as to the validity of the assessment.” MSGW, 18 N.J. Tax at 376. Disagreement with an
assessment must be based on “‘sound theory and objective data rather than on mere wishful
thinking.”’ Ibid. (internal quotation marks omitted).
If the court decides that the presumptive correctness is overcome, it can find value based
“on the evidence before it and the data that [is] properly at its disposal.” F.M.C. Stores Co. v.
Borough of Morris Plains, 100 N.J. 418, 430 (1985). The complainant bears the burden of
persuading the court that the “judgment under review” is erroneous. Ford Motor Co. v. Township
of Edison, 127 N.J. 290, 314-15 (1992).
3 If, at the close of plaintiff’s proofs, the court is presented with a motion to dismiss under
R. 4:37-2(b), in evaluating whether plaintiff’s evidence meets the “cogent evidence” standard, the
court “must accept such evidence as true and accord the plaintiff all legitimate inferences which
can be deduced from the evidence.” MSGW, 18 N.J. Tax at 376. If the court decides that the
plaintiff did not overcome the presumptive correctness, then the assessment should be affirmed.
Ibid. Thus, if a party has not met this burden, the trial court need not engage in a further evaluation
of the evidence to make an independent determination of value.
The market approach (or using comparable sales) is the generally accepted appraisal
methodology to determine value of residential homes. See Appraisal Institute, The Appraisal of
Real Estate 377 (14th ed. 2013) (the comparable sales method is generally appropriate for valuation
of a residential property where value is derived “by comparing similar properties that have recently
sold with the property being appraised, identifying appropriate units of comparison, and making
adjustments to the sales prices . . . of the comparable properties based on relevant, market-derived
elements of comparison”). Market evidence must support any element of comparison that causes
“value differences.” Id. at 378.
Plaintiff’s comparables are problematic as credible indicators of the Subject’s value. Two
of them were bi-level, thus, not the same style as the Subject. Styles can affect the sales prices, as
well as the buyer-pool (thus, the market). Both those comparables did not have a basement. All
three comparables were much older compared to the Subject. The lot size of comparable 2, which
plaintiff felt was most similar to the Subject, was half that of the Subject. Comparable 3 was on a
busy street unlike the Subject. Twwo comparables which plaintiff felt were the best value
indicators (the Subject and comparable 1), sold a year to a year and one half before the assessment
date. While it is not unreasonable to choose these as indicators of market value due to the
4 proximity of location and GLA similarity, plaintiff agreed that there were sufficient sales in 2016.
Credibility-wise, those sales would be considered first, and if rejected as non-comparable, the
earlier year’s sales could be then considered. However, without this initial “screening,” the court
cannot conclude that the 2015 sales are the only ones available, thus, can be considered as credible
indicators of the Subject’s value, and then would also need to consider whether the prices would
require adjustments for market condition, among others.
Finally, comparable 4 was marked with an NU-26 code which applies to sales, which for
reasons other than those listed in the regulations, “are not considered to be between a willing,
knowledgeable buyer, not compelled to buy, and a willing, knowledgeable seller, not compelled
to sell.” 2 See N.J.A.C. 18:12-1.1(a)(26). This raises a question whether the sale was an arms-
length transaction. If “non-market conditions of sale are detected in a transaction, the sale can be
used as a comparable sale but only with care,” thus, the “circumstances of the sale must be
thoroughly researched . . . [, and any] adjustment should be well supported with data,” otherwise
the sale should be “discarded” as a comparable. See The Appraisal of Real Estate, supra, at 410.
Of course, the use of a sale marked with an NU code could be satisfactorily explained.
This was not done here. The statute provides:
In any action or proceeding . . . on review of the assessment for taxes of any real property, or in any action or proceeding in the Tax Court, any person offered as a witness in any such action or proceeding shall be competent to testify as to sales of comparable land, including any improvements thereon, contiguous or adjacent to the land in question, or in the vicinity or locality thereof, or otherwise comparable, from information or knowledge of such sales, obtained from the owner, seller, 2 In developing a credible sales-to-assessment ratio to be used in developing the table of equalized valuations for each taxing district, the Division of Taxation reviews “the sales prices and assessed values of all real property sold during the sampling period” and “discards those sales which fall into one or more of 27 categories of transactions [set forth in N.J.A.C. 18:12-1.1] deemed to yield unreliable results[.] . . . These are called nonusable sales.” Borough of Englewood Cliffs v. Director, Div. of Taxation, 18 N.J. Tax 662, 665 (App. Div. 2000) (citation and internal quotation marks omitted). The sales-to-assessment ratio is used to determine the “state school aid distribution,” the “assessment discrimination claims by property owners,” and also is “adopted in county equalization tables . . . which are used to allocate the cost of county government among a county's municipalities.” Id. at 666.
5 purchaser, lessee or occupant of such comparable land, or from information obtained from the broker or brokers or attorney or attorneys who negotiated or who are familiar with or cognizant of such sales, which testimony when so offered, shall be competent and admissible evidence in any such action or proceeding.
[N.J.S.A. 2A:83-1 (emphasis added).]
The burden is on the plaintiff to show that the sale he deems comparable is a reliable
indicator of the Subject’s market value. 3 The court cannot accept a comparable sale without any
verification of its bona fides. See Glen Wall Associates v. Township of Wall, 99 N.J. 265, 282
(1985) (the court must “appraise the circumstances surrounding a sale to determine if there were
special factors which affected the sale price without affecting the true value”).
For the above reasons, the court finds that it does not have sufficient sampling, thus, there
is no credible quantitative and qualitative evidence of the Subject’s true value. Plaintiff’s
calculation of the Subject’s true value (sale price of comparable divided by its GLA times the
Subject’s GLA), standing alone, oversimplifies the valuation technique and process and dilutes the
need for qualitative cogent evidence.
The court is mindful that it must strive to find value. However, as stated in Township of
Warren v. Suffness, 225 N.J. Super. 399 (App. Div. 1988), “the Tax Court’s right to make an
independent assessment is not boundless,” but must be “based on the evidence before it and the
data that are properly at its disposal.” Id. at 414 (citation and quotation marks omitted). Thus, the
court cannot “arbitrarily assign a value to the property not supported in the record.” Ibid. (citation
3 Of course, if plaintiff showed the court with credible evidence that each sale with the NU code was verified as being arms-length despite existence of any factors indicating or implying a non-market sale, the Township cannot simply rest on an opposition that the sale is unreliable because it was treated as non-useable by the assessor in developing the Chapter 123 ratios. See Greenblatt v. City of Englewood, 26 N.J. Tax 41, 54 (Tax 2010) (“Simply saying that a sale was determined by the assessor to be non-useable for purposes of the Director’s sales ratio study does not render the sale non-useable for valuation purposes.”). But plaintiff must first satisfy this court of the sale’s reliability. Here, this was not done.
6 and quotation marks omitted). Here, there was no such credible evidence for the court to
independently conclude the Subject’s value.
CONCLUSION
For the aforementioned reasons, the court finds that plaintiff has failed to produce sufficient
evidence to overcome the presumptive validity of the judgment of the County Board. An Order
affirming the County Board’s judgment will accompany this opinion.
Very truly yours,
Mala Sundar, J.T.C.