NOT FOR PUBLICATION WITHOUT APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS ____________________________________ : SENOS SUZANNE & SCULLY C/O : TAX COURT OF NEW JERSEY BOYLE, : DOCKET NO: 010067-2022 : Plaintiff, : : vs. : : TOWNSHIP OF BRICK, : : Defendant. : ____________________________________: ____________________________________ : LA PORTE ASSOCIATES C/O DUCH, : TAX COURT OF NEW JERSEY : DOCKET NO: 010070-2022 Plaintiff, : : vs. : : TOWNSHIP OF BRICK, : : Defendant. : ____________________________________: ____________________________________ : D&R RENTO HOLDINGS LLC C/O, : TAX COURT OF NEW JERSEY : DOCKET NO: 010072-2022 Plaintiff, : : vs. : : TOWNSHIP OF BRICK, : : Defendant. : ____________________________________: Decided June 27, 2025
Jack A. Triana for plaintiffs (Triana & Traina, attorneys).
Scott William Kenneally for defendant (Starkey, Kelly, Kenneally, Cunningham, Turnbach & Yannone, attorneys). CIMINO, J.T.C.
Three taxpayers each own beachfront property in Brick Township. After
Superstorm Sandy in 2012, the assessor reduced the land portion of the assessment
of each property by twenty-five percent due to external obsolescence seemingly
attributed to destruction of the road network and public utilities servicing the
properties. In 2021, the assessor increased the land assessments fifteen of the
twenty-five percent. The taxpayers seek to void these increases. They assert that
the increases are either illegal spot assessments or that the assessor failed to have an
approved assessment compliance plan. While the municipality certifies repair of the
road network and the public utilities, and the construction of protective dunes and a
revetment, the assessor’s rationale for increasing the assessments is not clear. The
court denies summary judgment.
I.
Taxpayers, D&R Rento Holdings, La Porte Associates and Suzanne Senos are
the owners of lots 1, 3 and 5, respectively, of block 58 of the Tax Map of Brick
Township. The properties are located on Dune Avenue. The lots are similar in size,
2 and each has seventy feet of beach frontage. A single-family home is the current
improvement on each lot.
In 2010, Brick Township conducted a revaluation of property assessments.
For administrative purposes, assessors break down assessments into land and
improvement components. Texas Eastern Transmission Corp. v Township of East
Amwell, 13 N.J. Tax 24, 34 (Tax 1992), aff'd sub nom., 18 N.J. Tax 126 (App. Div.
1999). See also In re Kents 2124 Atl. Ave., Inc., 34 N.J. 21, 33-34 (1961). For the
three properties in question, the assessor placed the land assessment at $1.59 million.
The improvement assessment varied for each property.1
After the devastation of Superstorm Sandy in late October 2012, the assessor
adjusted the assessments of the properties to reflect the awesome devastation of the
storm.2 The assessor reduced the improvement assessments between thirty to one-
hundred percent. 3 The assessor also reduced the land assessments by twenty-five
1 The lot 1 improvement assessment was $535,900. The lot 3 assessment improvement was $211,300. The lot 5 assessment improvement was $486,400. 2 The storm damaged 325,000 housing units in New Jersey. Stephanie Hoopes Halpin, Rutgers Univ. Sch. of Pub. Affs. and Admin., The Impact of Superstorm Sandy on New Jersey Towns and Households 8 (2013). For ninety-municipalities, power was out for more than ten days. Ibid. 3 The lot 1 structure was reduced 30%. The lot 3 structure was reduced 100%. The lot 5 structure was reduced 60%.
3 percent, from $1.59 million per lot to $1.19 million for external obsolescence.4
External obsolescence is generally a reduction due to factors external to the land that
affect the utility of the land. BASF Corp. Coating & Ink Div. v. Town of Belvidere,
23 N.J. Tax 551, 580 (Tax 2007), Westwood Lanes, Inc. v. Borough of Garwood, 24
N.J. Tax 239, 262 (Tax 2008). The reductions here reflected external obsolescence
seemingly attributable to the destruction of the road and public utility infrastructure.
With the repair or rebuilding of the houses on the properties, the assessor
increased the improvement assessments. For example, the lot 1 improvement
assessment increased in 2013 and then again in 2015; the lot 3 improvement
assessment increased in 2016; and the lot 5 improvement assessment increased in
2017. However, the assessor did not increase any of the land assessments until 2021.
Just prior to the 2021 increase, the assessments were as follows: 5
Assessed Value with Twenty-Five Percent Land Reduction
Block 58, Lot 1 Block 58, Lot 3 Block 58, Lot 5 Land $ 1,189,000 $ 1,070,100 $ 1,189,000 Improvement $ 535,900 $ 501,700 $ 486,400 Total $ 1,724,900 $ 1,571,800 $ 1,675,400
4 To be exact, the assessor reduced the land assessment for each parcel from $1,585,300 to $1,189,000. 5 It is unclear why between 2013 and 2020, the Lot 3 land assessment was further reduced to $1,070,100.
4 In 2021, the assessor increased the land assessment for each property to $1.43
million which is still ten percent below the 2010 assessment. The increased
assessments are now: 6
Assessed Value with Ten Percent Land Reduction
Block 58, Lot 1 Block 58, Lot 3 Block 58, Lot 5 Land $ 1,426,800 $ 1,428,000 $ 1,426,800 Improvement $ 535,900 $ 501,700 $ 486,400 Total $ 1,962,700 $ 1,929,700 $ 1,913,200
The township engineer certified repair of the roads and public utilities, and
the construction of a dune structure and revetment. However, the assessor has not
clearly spelled out the reason for the increases, or why the increases did not revert
to the pre-Sandy level.
II.
The taxpayers move for summary judgment asserting the municipality has
engaged in spot assessments or failed to have an approved compliance plan. On
summary judgment, the court assesses “whether the competent evidential materials
presented, when viewed in the light most favorable to the non-moving party, are
sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor
of the non-moving party.” Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540
6 It is likewise unclear why the lot 3 land assessment was increased to $1,428,000 which is greater than the $1,426,800 land assessment on lots 1 and 5. 5 (1995). Since there are factual issues in dispute, this matter is not ripe for summary
judgment.
III.
The Uniformity Clause of the New Jersey Constitution generally requires
assessment of all real property at the same standard of value. N.J. Const. art. VIII,
§ 1, ¶ 1(a). Proper assessment valuation is the bedrock of uniformity.
Assessed property values are set and maintained a number of ways. First, a
municipality can conduct a revaluation. An outside appraisal company values all
properties in the municipality after an inspection of the exterior and an attempt to
inspect the interior. N.J.S.A. 54:1-35.35. N.J.A.C. 18:12A-1.14(b)(4). The exercise
is usually an expensive endeavor for the municipality. See generally N.J.S.A. 54:1-
35.36, N.J.A.C. 18:12-4.1 to 4.11.
Second, the assessor can conduct a district-wide reassessment to adjust the
values of all properties after review of the exterior of all properties. N.J.S.A. 54:4-
23, N.J.A.C. 18:12A-1.14(c). This is generally an interim measure between
revaluations. It is a timely and possibly costly endeavor.
Third, assessors must perform basic assessment maintenance. N.J.S.A. 54:4-
23. See N.J.A.C. 18:12A-1.14(j)(3)(viii). The assessor needs to be alert for changes
in individual properties that affect assessed value. Tri-Terminal Corp. v. Borough of
Edgewater, 68 N.J. 405, 414 (1975). The assessor must track changes in the physical
6 characteristics or the legally permissible uses of the property. Ibid. For example,
physical changes could be an addition to a residence, or a garage may burn to the
ground. See N.J.A.C. 18:12A-1.14(j)(3)(viii). Legal changes include variances
allowing a larger structure to be built or changes in the zoning code limiting
commercial construction. See Ibid. These changes do not always dictate a change
in the assessed value of the property. However, these changes alert an assessor that
further investigation is necessary.
Both physical and legal changes differ from appreciation or depreciation
driven by the broad market. Market driven changes are already captured by an
“average ratio” which the Director of the Division of Taxation calculates each year
through a sales study. N.J.S.A. 54:1-35a, -35b, -35.1 to -35.3.
Fourth, the assessor can employ a compliance plan. N.J.S.A. 54:4-23. A
compliance plan is a specially authorized type of assessment maintenance designed
to equalize uneven appreciation or depreciation between (1) different neighborhoods
in a municipality or (2) different types of property classes (residential versus
commercial). Ibid., N.J.A.C. 18:12A-1.14(j), City of Elizabeth v. 264 First Street,
LLC, 28 N.J. Tax 408, 437 (Tax 2015) (compliance plans required for property class
reviews). Prior to the Legislature codifying this procedure and the subsequent
adoption of detailed regulations by the Director, our courts found that compliance
plans to adjust certain property classes to be appropriate. Regent Care Ctr., Inc. v.
7 City of Hackensack, 362 N.J. Super. 403, 419-420 (App. Div. 2003), Frieman v.
Township of Randolph, 216 N.J. Super. 507, 510-11 (App. Div. 1987).
The following example demonstrates the importance of a compliance plan.
Neighborhood A values are increasing at ten percent over base per year and
neighborhood B values are increasing at twenty percent over base per year. After a
few years, the average ratio for the entire municipality may not be applicable to
either neighborhood. If both neighborhood A and neighborhood B have a property
assessed at $100,000, after five years the property would be worth $150,000 in
neighborhood A and $200,000 in neighborhood B. The owners of each respective
property would continue to pay the same amount of tax even though the property in
neighborhood B is worth one-third more.
Recognizing the inequities of uneven appreciation (or depreciation) within a
municipality between municipal-wide revaluations or reassessments, the Legislature
allows assessors to implement a compliance plan reassessing only a portion of a
municipality. L. 2001, c. 101, § 1 (codified as amended N.J.S.A. 54:4-23).
Previously, an assessor could only correct this inequity by undertaking a reevaluation
or reassessment of the whole municipality. This is a costly and time-consuming
proposition. With a compliance plan, an assessor can focus in on the neighborhoods
or property classes experiencing a change in value not commensurate with the
balance of the municipality.
8 A compliance plan allows an assessor to update assessments despite the lack
of any physical or legal change. To prevent abuse, the assessor must obtain approval
from the County Board of Taxation. N.J.S.A. 54:4-23, N.J.A.C. 18:12A-1.14(j)(2).
The assessor must demonstrate a sufficient variance in assessment between classes
or neighborhoods. See N.J.A.C. 18:12A-1.14(j)(3)(v).
In adopting compliance plan regulations, the Director provided examples of
what constitutes traditional assessment maintenance not requiring a compliance
plan. N.J.A.C. 18:12A-1.14(j)(3)(viii). Physical changes which do not require a
compliance plan include added assessments, omitted assessments, omitted-added
assessments, demolitions, site contamination, removal of contaminated soil and
property remediation, and damage from storm, cyclone, tornado, earthquake, fire,
flood, hurricane, vandalism or other casualty. Ibid. Legal changes not requiring a
compliance plan include governmentally imposed restrictions, planning board
and/or zoning board of adjustment approvals, subdivisions and mergers.7 Ibid.
7 The Director also recognized corrections of errors such as those caused by clerical, typographical, transpositional, physical descriptive or mathematical errors do not constitute or need a compliance plan but are obviously part and parcel of assessment maintenance. Ibid. It also goes without saying that approved revaluations do not require a compliance plan since revaluations are approved by the Director. Ibid. Qualified farmland does not require a compliance plan since this is addressed in a separate statutory section. Ibid. Changes resulting from appeals or settlement agreements do not require compliance plans since they are subject to oversight of either a county board of taxation or the courts. Ibid. 9 Finally, an assessor cannot engage in spot assessments. A spot assessment is
an illegal adjustment of assessed value based upon an appreciation in value not tied
to any physical or legal change, nor authorized by a compliance plan. See Centarino
v. Township of Tewksbury, 347 N.J. Super. 256, 266-67, 20 N.J. Tax 35, 44-45 (App.
Div. 2001). Sale of the subject property or a nearby property usually presages such
change. Township of West Milford v. Van Decker, 120 N.J. 354, 361-62 (1990). In
the normal course, the average ratio prepared by the Director captures increases in
value that are not the result of physical or legal changes. See N.J.S.A. 54:1-35a(a).
Spot assessments short-circuit that process.
Spot assessments are especially egregious if the decision to spot assess is
based solely upon the sale of the property. The spot assessment impacts the taxpayer
twice. First, and most obvious, is the increase in the assessed value. Second, the
sale, as part of the sales study of the municipality, impacts the average ratio. Ibid.
With this double effect, the taxpayer would face an effective increase in taxation
even beyond the intent of the spot assessment.
IV.
In this case, the taxpayers allege that the assessor engaged in either illegal spot
assessments or failed to secure proper approval of a compliance plan. However, the
court has more to decide than whether there are spot assessments or an unapproved
compliance plan. The municipality has filed a counterclaim challenging the
10 assessor’s assessment. Assessors “‘perform quasi-judicial functions” by applying
‘independent judgment.’” VNO 1105 State Hwy. 36, LLC v. Township of Hazlet,
33 N.J. Tax 20, 26 (App. Div. 2021) (quoting Ream v. Kuhlmen, 112 N.J. Super.
175, 190 (App. Div. 1970)). Municipalities are free to challenge the assessments of
their own assessor.8 N.J.S.A. 54:3-21(a).
There are two competing interests at play. First, the appealing property
owners have an interest in not having their properties spot assessed or subject to a
rogue compliance plan. Second, all the taxpayers in the municipality have an interest
in having all properties assessed fairly by the assessor to ensure everyone pays their
fair share of taxes. Despite competing interests, the goal is the same, the
constitutional mandate of uniformity in taxation.
Traditionally, a taxpayer had to establish that assessed value exceeded true
value. See Royal Mfg. Co. v. Bd. of Equalization of Taxes, 76 N.J.L. 402, 404-05
(Sup. Ct. 1908), aff’d, 78 N.J.L. 337 (E. & A. 1909). With stable property values,
this was a workable standard for tax appeals. With appreciating property values, the
assessed value may represent only a fraction of true value after only a couple of
years. Thus, even if a property was over-assessed as compared to other properties,
so long as the assessed value was below true value, no downward adjustment in
8 Typically, the assessor and the municipality are on the same side with the municipality merely defending the assessor’s assessment from attack by a taxpayer. See N.J.A.C. 18:17-4.1(a)(5) 11 assessed value was warranted. Ibid. If a taxpayer wanted the fair taxation which
results from fair assessments, the remedy was to raise the assessments of all
properties in the taxing district to true value. Kents, 34 N.J. at 25. A taxpayer would
have the Herculean task of proving the individual true values of all properties in the
taxing district.
By the early 1960’s, with assessed values only representing a fraction of true
value, a tax appeal was fast becoming an illusionary remedy. Recognizing the
inequities, the Supreme Court in Kents allowed taxpayers to utilize the Director’s
school aid ratio to establish discriminatory treatment. Kents, 34 N.J. at 31-32. The
Legislature had mandated the Director promulgate the school aid ratio for “the
purpose of fixing a basis for the distribution to municipalities of State aid for
education.” Id. at 26. See N.J.S.A. 54:1-35.1. The ratio compares assessed value
to true value, based upon sales of properties sold in each municipality. N.J.S.A.
54:1-35.3, Township of Jefferson v. Dir., Div. of Tax'n, 26 N.J. Tax 1, 5 n.5
(Tax 2011) (citing Memorandum from the Dep't of the Treas., Div. of Tax'n, Local
Prop. Tax Bureau, to The Sec'y of Each Cnty. Bd. of Tax'n, All Mun. Assessors, and
All Mun. Clerks (July 30, 1970)). For consistency, the school aid ratio calculation is
uniform statewide. See Ibid.
The Legislature further advanced the goal of uniformity by enacting Chapter
123 in 1973. L. 1973, c. 123. Initially, Chapter 123 relied upon an average ratio
12 similar to, but not the same as, the school aid ratio. Id. at § 1. In 1979, the
Legislature amended Chapter 123 to rely upon the school aid ratio as the average
ratio. L. 1979, c. 51, § 1 (codified at amended at N.J.S.A. 54:1-35a).
In adopting Chapter 123, the Legislature recognized that determining property
values is not an exact science. “Mathematical perfection in taxation is unobtainable,
and hence relief should not be denied merely because the result lacks absolute
precision. The injured taxpayer is entitled to practical relief.” Kents, 34 N.J. at 32.
Thus, there is a “common level range” of plus or minus fifteen percent of the
“average ratio.” L. 1973, c. 123, § 1 (codified as amended at N.J.S.A. 54:1-35a(b)).
The bounds of the “common level range” are known as the “lower limit” and the
“upper limit.” See N.J.S.A. 54:3-22(c), 54:51A-6(a). Dividing the assessed value
by the true value yields a ratio. A ratio outside the lower or upper limit requires
adjustment of the assessed value. 9 N.J.S.A. 54:3-22, 54:51A-6.
Except for revaluation years and district-wide reassessment years where the
assessed value is set to one-hundred percent of true value, the municipality has an
automatic counterclaim despite the lack of an affirmative counterclaim. Campbell
Soup Co. v. City of Camden, 16 N.J. Tax 219, 228 (Tax 1996). In this case, the
9 Certain exceptions apply in revaluation and district-wide reassessment years where the assessment is set to true value, the assessment is greater than true value or the Chapter 123 ratio is greater than 100%. A handy chart for dealing with these issues can be found in Passaic St. Realty Assoc., Inc. v. City of Garfield, 13 N.J. Tax 482, 486 (Tax 1994). 13 municipality filed an affirmative counterclaim challenging the assessed value of the
property. An affirmative counterclaim precludes a taxpayer from unilaterally
withdrawing the claim if things are not going well for taxpayer at trial. Id. at 228.
Township of Cherry Hill v. U. S. Life Ins. Co. of N.Y., 176 N.J. Super. 254, 261, 1
N.J. Tax 236, 243 (Tax 1980); Passaic St. Realty Assoc., Inc. v. City of Garfield, 13
N.J. Tax 482, 485, 488 (Tax 1994).
A finding of spot assessments or an unapproved compliance plan may require
the court to reduce the value imposed to reflect the twenty-five percent land
assessment reduction. The question then arises whether the court should deny the
municipality’s pursuit of a counterclaim. To deny the municipality the right to
pursue a counterclaim because of a misdeed of the assessor is extraordinary relief
reserved for the most egregious of circumstances. 264 First Street, 28 N.J. Tax at
451. “The appeal procedure is a necessary tool for attaining uniformity and equality
in a real estate tax system. . . .” Comment, The Road to Uniformity in Real Estate
Taxation: Valuation and Appeal, 124 U. Pa. L. Rev. 1418, 1445 (1976). Denying a
counterclaim cuts against the goal of the Uniformity Clause to ensure uniformity.
V.
The assessor adjusted the twenty-five percent reduction to the land
assessments to ten percent in 2021. Taxpayers appealed their 2022 assessments. The
14 common level range of values in 2022 for assessments with the land assessments
only being reduced ten percent are:
Common Level Range of 2022 Values with Ten Percent Land Reduction
Block 58, Lot 1 Block 58, Lot 3 Block 58, Lot 5 Below $ 2,078,031 $ 2,043,092 $ 2,025,622 Average $ 2,389,748 $ 2,349,568 $ 2,329,478 Above $ 2,811,488 $ 2,764,217 $ 2,740,582
Taxpayers seek restoration of the twenty-five percent reduction in land
assessments. The common level range of values in 2022 for the total assessed values
with the twenty-five percent land assessment reductions are: 10
Common Level Range of 2022 Values with Twenty-Five Percent Land Reduction
Block 58, Lot 1 Block 58, Lot 3 Block 58, Lot 5 Below $ 1,826,257 $ 1,664,161 $ 1,773,849 Average $ 2,100,207 $ 1,913,795 $ 2,039,937 Above $ 2,470,849 $ 2,251,540 $ 2,399,943
With the assessments based upon a ten percent land reduction, no increases
will occur unless the municipality can prove 2022 true values in excess of about $2.8
10 The calculations for the common level range of values are made by dividing the total assessed value by the upper limit, average ratio and lower limit. The Chapter 123 ratio for Brick Township for 2022 is as follows:
Average Ratio 82.13% Lower Limit 69.81% Upper Limit 94.45%
15 million. 11 With a restoration of the twenty-five percent reduction, the municipality
only has to prove 2022 true values in excess of+- about $2.4 million. With reduced
assessments, the municipality has lower thresholds to cross to obtain an increase.
What does this all mean? If the taxpayers believe the properties will appraise
for more than $2.4 million dollars for 2022, they should consider abandoning their
claim of improper spot assessments or an unapproved compliance plan. This may
shield the taxpayers from an increase by requiring the municipality to prove a 2022
true value of at least $2.8 million instead of $2.4 million.
Overall, this is a thorny issue which summary judgment is not well-suited to
resolve. The court needs to hear from both the present and the prior assessor to
determine the credibility of their reasoning for adjusting the assessments. However,
this issue may be moot if the true value of each property exceeds about $2.4 million
for the 2022 tax year.
The court denies summary judgment. The matter will be set down for trial
with the court determining both the existence of improper spot assessments or a
compliance plan, and the value of the properties for 2022. The court will afford the
11 In deciding tax appeals, the court considers the total assessed value. The separate land and improvement assessment are for the administrative convenience of the assessor. Texas Eastern, 13 N.J. Tax at 34. See also Kents, 34 N.J. at 33-34.
16 parties additional time to finalize their appraisals and secure the attendance of their
appraisers at trial.