Reassessment 2012: Fudge Factor?

No. 780

Just a thought: Is the increase in the land component of assessments a way to fudge assessment increases in neighborhoods or locations where the assessors think values should be rising?

If so, don’t accept any fudge that is half-baked.

[Apologies to King’s Family Restaurant for the photo.]

CLT

Category: 2012, Property Assessments, Reassessment 2012

Reassessment 2012: Give Me Land Lots of Land — well, not so much.

No. 779

We’re hearing that the assessors have been increasing the land value in the City on some properties much more than the value of improvements. I saw one today where the building value of a four unit apartment building went down a significant amount but was more than offset by an enormous increase in the land portion of the valuation.

Although assessors have been splitting value between land and buildings forever, one has to wonder how they arrive at the split in value. There are not too many sales of vacant lots, especially in a city that doesn’t see that much new construction. Moreover, comparable property sales never have the value split between land and buildings.

Extra land can enhance value, but you have to be careful about jumping to conclusions in a place like Pittsburgh. Terrain can make land that looks great on the assessment map worthless or nearly so. Side yard lots that are too small to build a house or even a garage are frequently little more than grass to cut.

However, chances are that we will never know where they derived the land value. There won’t be anyone at your assessment hearing to answer the question.

CLT

Category: Property Assessments, Reassessment 2012

Reassessment 2012: What About All Those Sheriff Sale Properties?

No. 778

Photo: Jim Dolanch

From all reports, the assessment notices that started arriving in City and Mt Oliver mailboxes yesterday were full of assessment values that are double and triple the 2002 numbers. With all of the sheriff sale properties on the market, how can this be? Good question.

The Sheriff’s deed, which frequently represent a very small bid of costs and taxes, are culled out of comparables for assessments. Those are not considered to be arm’s length transactions between a willing buyer and a willing seller. However, the recently foreclosed properties that are being dumped on the market are being sold for very low prices. Moreover, they are driving the market down. As many would-be sellers will testify, it is very hard for a seller these days to compete with foreclosure properties.

The sales market has not been robust for a long time. There has been a sharp decline in residential lending for a variety of reasons, some of which are subtle. Credit standards are significantly higher than they were ten years ago, due mostly to the 2008 debacle. But low interests, fueled by the Fed, are actually a disincentive to portfolio lenders. Low interest loans create a future interest rate risk problem for community lenders who do not sell their loans to investors. In this environment, the sales that are happening involve the best qualified buyers.

By the same token, many potential sellers cannot sell because their properties would not yield enough to pay off mortgages obtained during better times. Thus, a substantial portion of would be buyers and sellers are sitting on the sidelines. Where then are the sales coming from? Sellers with lots of equity and well-qualified buyers are playing a larger role. But so are buyers of distressed properties.

Although we don’t know about the methodology used in this reassessment, it would not surprise me if the sheriff sale property resales are being ignored in favor of the highest comparable sales available. If there is a range of sale prices for comparable properties, the median of the group, not the highest or lowest, is the best expression of value. However, if the assessors are consistently choosing the highest price in the range is this any wonder?

The assessment values, even if they pass statistical tests, may not reflect the true picture of the housing. Appeal, and then dig up some of those post-sheriff sale transactions that the assessors buried when they determined comparable sales for your property.

CLT

Category: Property Assessments, Real Estate, Reassessment 2012

Reassessment of the Reassessment by Fitzgerald — Too Little, Too Late?

No. 777

When we wrote “Christmas Reassessment” (below at No. 774) we gave Rich Fitzgerald credit for being shrewd enough to pass a one mill tax increase this year — before the assessment year in which increases would be limited to 105% of the prior year, at least in theory, by Act 146.

However, to listen to the statements he has been giving to the press lately, it appears that he has other ideas. Fitzgerald says that he will refuse to allow reassessment letters to go out after he takes office on January 3 and will order the assessors to refuse to certify the values contained in those letters.

The problem is that the letters are due to be mailed this week to residents of the City of Pittsburgh and Mt. Oliver. Moreover, the City and School tax bills must be prepared immediately, with no opportunity to do anything but use the new values. What then will happen if Fitzgerald persists in his protest?

In addition, the Pennsylvania Supreme Court has refused to grant Allegheny County’s requests for extraordinary relief, thereby assuring that the current reassessment will not be halted by judicial intervention. Nor will there be assistance from the legislature. Almost all of the members are from other Counties and have no desire to impose Allegheny County’s pain upon their own districts and thus upon themselves.

The City and School bills will be out there and an angry Judge Wettick will order Fitzgerald to certify the values or be in contempt. After a day or so of this, Fitzgerald will meekly announce that his hands are tied. Count on it.

Category: 2012, News Commentary, Pittsburgh, Property Assessments, Real Estate
Tags: Act 146 > assessment appeals > Rich Fitzgerald

Hark, the Herald Angels Sing! It Took Over a Century to Get it Just Right.

No. 776

PHOTO; Living Nativity Scene in Kenya, 2011. Courtesy of Susan Ferson.

The hymnbooks credit Charles Wesley for the words and Felix Mendelssohn for the tune. True, but that’s not the whole story.

Wesley (1707 – 1788) and Mendelssohn ( 1809- 1847) were not contemporaries. Wesley published the original version of this work in 1839 under the title “Hark! How all the Welkin Rings”. The word means heaven. Over the next Century, various editors tinkered with the lyrics, notably George Whitefield, who revised the opening couplet to its present form.

In 1840, 101 years later, Mendelssohn composed a cantata, “Festgesang” commemorating Gutenberg and the printing press. In 1855, an English musician named William H. Cummings put the hymn and the music together in its current form. It is now regarded as one of the four great Anglican hymns.

It has been written that neither Wesley or Mendelssohn would have approved of the hymn in its final version. Wesley set this hymn to a rather somber melody. The Mendelssohn composition was a secular one. Or so the critics say.

I wholeheartedly disagree. If Wesley and Mendelssohn could be transported to the present day to hear a chorus and orchestra perform “Hark the Herald Angels Sing!”, after the initial shock wore off, they would both love it.

Merry Christmas 2011.

CLT

Category: Holidays
Tags: Charles Wesley > Felix Mendelssohn

Do they still hang horse thieves in Texas?

No. 775

Everyone knows that Texas is just about the world champion in administering capital punishment. But do they hang horse thieves? There is a real case of serial horse theft and equicide pending in the Lone Star State. Improve your education on the subject by reading the Equine Law Blog.

Category: Constitutional Law, Criminal Law

Christmas Reassessment

No. 774

The County Assessors really do have a heart. They tried to keep from delivering the first batch of reassessment notices before Christmas. But Judge Wettick would have none of it.

I must admit, I didn’t initially give Rich Fitzgerald credit for shrewd thinking. It was puzzling that the County Council rushed to pass a one mill tax increase almost immediately after the election. But, upon reflection, the answer is simple. They can’t pass more than a nominal tax increase in a reassessment year. Moreover, once the numbers start to trickle out, there won’t be any political cover for tax increases.

Smart.

K Mart Smart.

CLT

Category: 2012, News Commentary, Pittsburgh, Property Assessments, Real Estate
Tags: County Assessor > Rich Fitzgerald

War is Peace. Freedom is Slavery. Complex is Simple.

We’ve talked about this before. The Consumer Financial Protection Bureau has been trying to simplify and illuminate home mortgage financial disclosures. Periodically they put out a couple of variations on their merged disclosure form prototypes and ask the public which one they like the best. If you want to try, click here.

As for me, I’d like to see APR and closing costs being explained by the Muppets. That would extend my attention span. Especially if they worked up a few catchy songs and some lively dance routines, say, involving a chorus line of chickens.

CLT

No. 773

Category: Consumer Protection

The Operating System Made Me Do It!

772

I have a reliable report that a lawyer using Macintosh’s OSX Lion was drafting a will calling for an executrix. While proofing, he discovered that the ever-helpful operating system had “corrected” the word “Executrix” to read — no kidding — “Dominatrix.”

Computer as Dominatrix.

Photo: John Lund.com

Category: Legal Technology

Goodbye, What’s-His-Name.

No. 771

If we could only remember your name, we might sue you for breach of contract. Aha — Otto Graham! No, Martha Graham!

No, that’s not right.

You’ll always be remembered as the guy who sent a text message to one of the assistant coaches to say goodbye to the team, except of course, that we don’t remember who you are — is it Billy Graham? No, but I think we are getting warm. Alexander Graham Bell? Getting cold.

Come to think of it, you won’t be remembered for anything. Hope they send a text to one of your assistants when they fire you at Texas Tech! No, that can’t be right. We’ve forgotten the name of the place you went, too.

Oh well, that’s basketball for you!

CLT

Category: Pittsburgh

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CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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