Court Opinion

ID: 9966201
Source: CourtListenerOpinion
Date Created: 2024-05-06 14:07:21.323874+00
Date Added: 2024-06-11T08:25:45.573805
License: Public Domain

NOT FOR PUBLICATION WITHOUT APPROVAL OF
                         THE TAX COURT COMMITTEE ON OPINIONS

                               TAX COURT OF NEW JERSEY
                                                                        Essex County Dr. Martin Luther King, Jr. Justice
                                                                      Building 495 Martin Luther King Blvd. - Fourth Floor
 MARY SIOBHAN BRENNAN                                                           Newark, New Jersey 07102-0690
         JUDGE
                                                                                   (609) 815-2922 Ext. 54600
                                                                                      Fax: (973) 424-2424

                                                     April 26, 2024

Evelyn Hoque
54 Williams Avenue
Jersey City, NJ 07304

William Maslo, Attorney at Law
City of Jersey City Law Department
364 MLK Drive
3rd Floor
Jersey City, NJ 07305

                 Re:    Evelyn Hoque v. City of Jersey City
                        Docket No.: 008552-2023

Dear Ms. Hoque and Mr. Maslo:

       This shall constitute the court’s opinion with respect to Plaintiff, Evelyn Hoque’s

(“Plaintiff”), summary judgment motion “to modify the tax assessment” of real property owned

by her in Jersey City for tax year 2023. Her motion is based on the following four arguments; (1)

without a certificate of occupancy and actual occupancy, the assessment is premature; (2) the

property meets the criteria for special treatment under the Urban Enterprise Residential Tax

Abatement Law; (3) the assessment is disproportionate to similar properties; and (4) the tax

assessment value should remain the same until a certificate of occupancy is issued.

       The City of Jersey City (“Municipality”) opposes the motion on the basis that the motion

is not in compliance with the court rules, and that the requested relief by way of summary judgment

is inappropriate.

       For the reasons stated more fully below, the court denies Plaintiff’s motion.
       In accordance with R. 1:7-4(a), the court makes the following factual findings based on the

submissions of the parties.

                           I. Findings of Fact and Procedural History

       Plaintiff and her husband, Mahabub Hoque, are the owners of real property located at 52

Williams Avenue, also identified as Block 20501 Lot 76 on the Municipality’s tax map (“Subject

Property”). Plaintiff has owned the Subject Property since July 31, 2019, and it is her intention to

construct a single-family home on the 20 by 90-foot non-conforming lot. At the time of the

assessment, October 1, 2022, a foundation wall had been erected on the property. There is no

evidence establishing when the construction process began. To date, no certificate of occupancy

has been issued, and there is no actual occupancy of the premises.

       Prior to tax year 2023, the assessment on the Subject Property was $78,000. For tax year

2023, the Municipality increased the assessment to $369,100 for the Land and $20,000 for

improvements, for a total assessment of $389,100. Plaintiff timely appealed her 2023 assessment

to the Hudson County Board of Taxation. After a hearing, the Hudson County Board of Taxation

issued a Memorandum of Judgment on June 1, 2023, lowering the assessment utilizing code 1B

(Assessment Out of Range N.J.S.A. 54:3-22), indicating a revised Land portion of the assessment

of $190,000, resulting in a new assessment of $210,000. Unhappy with this reduction, Plaintiff

filed a timely appeal to this court on July 20, 2023.

       On December 6, 2023, the Municipality served upon Plaintiff a demand for responses to

standard interrogatories. On December 8, 2023, Plaintiff filed this summary judgment motion

requesting the court to modify the tax assessment. That same date Plaintiff also propounded a

discovery request on the Municipality. The court carried the motion to allow both parties to

complete discovery.

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       On April 5, 2024, the Municipality filed opposition to the motion.

       On April 12, 2024, the court was copied on an email from Plaintiff to Defendant’s counsel

which read:

               Mr. Maslo, In reviewing the NJ Assessors Handbook Revised 2022,
               particularly section '801.02 Property Taxable', it's clear that two
               types of property are impacted by the Added Assessment Law: 1.
               Structural Changes, which include new structures, additions to
               existing structures, and improvements of existing structures. These
               are subject to the Added Assessment Law if they are completed after
               the statutory annual October 1 assessment date. A structure is
               deemed “completed” when it is substantially ready for the purpose
               for which it was intended. Importantly, the structure need not be in
               use to be taxable; it becomes taxable when it is ready for use. The
               single-family residence at 52 Williams Ave in Jersey City falls
               squarely within this framework. To date, the property remains unfit
               for use as the structure is incomplete, and we lack both water and
               sewer connections. Despite the striking down of NJSA 54:23a,
               current taxation laws continue to prohibit the imposition of an added
               assessment on properties that are not substantially ready for their
               intended use. This legal interpretation directly applies to the
               property at 52 Williams Ave, Jersey City, and I will update my
               summary judgment request to accurately reflect this stance.

               Furthermore, the League of Municipalities versus Kimmelman case
               of 1987, which emphasized fair and equitable treatment of taxable
               property, holds significant weight. Assessing higher land values for
               new construction compared to older construction violates the
               principles on which NJSA 54:23a was overturned.            Regards,
               Evelyn

       At 1:57 p.m. on Thursday April 25, 2024 (the day before the return date of this motion),

Plaintiff sent an email to the court in response to the Municipality’s opposition. In brief, Plaintiff

made the following points:

               1       The Municipality’s focus on procedural aspects such as the
                       absence of a material fact statement should not detract from
                       the core issue: the unlawful tax assessment of her property.

               2       The New Jersey Assessors Handbook Revised 2022, section
                       '801.02 Property Taxable', delineates the conditions under

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                     which properties are subject to the Added Assessment Law.
                     It explicitly states that structural changes, including new
                     constructions, are taxable only when they are substantially
                     ready for their intended use. As of now, the single-family
                     residence at 52 Williams Ave remains incomplete, lacking
                     essential utilities such as water and sewer connections,
                     thereby rendering it unfit for use. This fact alone should
                     exempt the property from the added assessment imposed by
                     the City.

              3      The Municipality’s reliance on New Jersey State League of
                     Municipalities v. Kimmelman is misplaced. Assessing
                     higher land values for new construction, as opposed to older
                     properties, contravenes the very principles of equity and
                     uniformity that the Kimmelman decision sought to protect.
                     The improper assessment during the construction phase,
                     unjustly impacts Plaintiff’s financial obligations before the
                     completion of the property.

              4      The Municipality failed to apply the relevant legal standards
                     correctly in assessing the property at 52 Williams Ave. The
                     imposition of an added assessment on a property that is not
                     substantially ready for its intended use is contrary to the
                     established legal framework.

              5      The burden of proof in tax assessments requires the
                     Municipality justify its assessment practices. It must
                     demonstrate that its assessment of the Subject Property is
                     both lawful and equitable.

              6      The lack of transparency and failure to provide requested
                     evidence during discovery call into question the validity of
                     the assessment. The Municipality’s lack of cooperation in
                     providing publicly available information, as well as evidence
                     pertaining to the assessment practices, is deeply concerning.

The court held oral argument on April 26, 2024.

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                                         II. Legal Analysis

       A. Compliance with New Jersey Court Rule 4:46.

       When a plaintiff seeks resolution of a tax appeal by way of summary judgment, the New

Jersey court rules set forth certain procedural requirements. The summary judgment rules require

that the moving party provide “a statement of material facts . . . with or without supporting

affidavits.” R. 4:46-2 (a). The statement of material facts shall set forth in separately numbered

paragraphs a concise statement of each material fact as to which the movant contends there is no

genuine issue together with a citation to the portion of the motion record establishing the fact or

demonstrating that it is uncontroverted. Ibid. The citation shall identify the document and shall

specify the pages and paragraphs or lines thereof or the specific portions of exhibits relied on. A

motion for summary judgment may be denied without prejudice for failure to file the required

statement of material facts. Ibid.

       The court finds that Plaintiff’s motion is not in compliance with the court rules with respect

to summary judgment motions. Specifically, the moving papers do not contain a statement of

material facts as required by R. 4-46-2(a). The Municipality submits that this violation of the rules

renders the motion deficient. Furthermore, they claim that Plaintiff’s motion is confusing and fails

to isolate the issues and the factual considerations necessary for analysis by the Municipality and

ultimately the court.

       In addition, R. 4:46-1 also requires that responses to opposition papers shall be served and

filed not later than four days before the return date – not the afternoon before.

       While this court does not condone non-compliance with the rules, considering the

interrogatory responses provided by Plaintiff, and in light of all of the circumstances, the court

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exercises its discretion to relax the rules as permitted by R. 1:1-2.1 The court finds there is no

injustice by doing so and that a decision on the merits of Plaintiff’s summary judgment motion is

more helpful to the parties.

          B. Summary Judgment.

          When deciding a motion for summary judgment under R. 4:46-2, the court must determine

whether there exists a genuine issue as to any material fact. In addition, the court must determine

whether competent evidential materials have been presented sufficient to permit a rational

factfinder to resolve the issue at hand in favor of the moving party, when viewed in the light most

favorable to the non-moving party. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523

(1995).

          Plaintiff has advanced multiple arguments in her motion, and the court shall address each

argument applying the above standard.

          (1) N.J.S.A. 54:4-23a bars the increased assessment due to the lack of a Certificate of

             Occupancy.

          N.J.S.A. 54:4-23a states in pertinent part:

                 Any other law to the contrary notwithstanding, no building or other
                 structure newly constructed on any parcel of real property and
                 intended for occupancy and use for residential purposes as a single
                 family dwelling shall be added to the assessment list as real property
                 subject to taxation, until a certificate of occupancy or temporary
                 certificate of occupancy has been issued and unless the building or
                 other structure is actually occupied and used for such purposes;
                 provided, however, that such building or structure shall be omitted
                 from taxation for a period not to exceed 24 months. At the
                 termination of the 24 month period or following the granting of a
                 certificate of occupancy or temporary certificate of occupancy and
                 the occupation and use of the building for residential purposes, the
                 building or structure shall be assessed and taxed as of the first day

1
 R. 1:1-2 is a catch-all relaxation provision that provides “any Rule may be relaxed or dispensed
with by the court in which the action is pending if adherence to it would result in an injustice."

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                  of the month following the date of such use for the proportionate
                  part of said year then remaining.

                  [N.J.S.A. 54:4-23a]

        The Municipality has correctly pointed out that this statute has been rendered invalid and

unconstitutional by the New Jersey Supreme Court in the matter of N.J. State League of

Municipalities v. Kimmelman, 105 N.J. 422 (1987). That action sought to declare that N.J.S.A.

54:4-23a, which exempted newly constructed unoccupied single family property from local

property taxes, was a special law in violation of N.J. Const. art. IV, § 7, ⁋ 9 and N.J. Const. art.

VIII, § 1, ⁋ 2.

        Upon a thorough and exhaustive review of the history, meaning, and interplay of the

constitutional provisions at play, our Supreme Court determined that the property tax exemption

afforded by N.J.S.A. 54:4-23a violated the uniformity provision of the state constitution, which

requires that all real property be taxed by general law and uniform rules.

        Consequently, this argument does not provide any basis for modification of the assessment

on the Subject Property.

        (2) The Subject Property meets the criteria for Special Treatment under the Urban

            Enterprise Zone (N.J.S.A. 54:4-3.139) entitling Plaintiff to a modification of the

            2023 assessment.

        The New Jersey Constitution, recognizing the need to encourage economic growth through

rehabilitation and redevelopment of real property, gives the New Jersey Legislature the power to

enact exemption and abatement laws to restore the vitality of depressed areas and to increase

municipal ratables upon which property taxes are levied. See N.J. Const. art. VIII §§ 1 ¶ 6, 3 ¶ 1.

        Through the power vested in it, the New Jersey Legislature has enacted N.J.S.A. 54:4-

3.139, known as the Urban Enterprise Residential Tax Abatement Law.

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       The Legislature has stated that “[p]roperty tax abatements for the construction of certain

residential structures . . . will constitute a substantial incentive for owners and investors to improve

vacant land and underutilized structures.” N.J.S.A. 4:4-3.139(i). Thus, a municipality “may, by

ordinance, provide for abatements of real property taxes for qualified residential

property.” N.J.S.A. 54:4-3.142. Such abatements shall be for a period of five years. N.J.S.A. 54:4-

3.142(a). Municipalities that engage in adopting ordinances to implement this abatement program

designate urban enterprise zones (“UEZ”) that define geographically what properties may qualify

for the abatement program.

       N.J.S.A. 54:4-3.142(e)(1) provides that as a condition for receiving an abatement, a

municipality may require that the residential property “be occupied by the owner thereof….”

       Pursuant to this statutory authority, on December 23, 1985, the Municipality enacted

an ordinance, codified in Chapter 323.1 of its Revenue and Finance Code ("the Code"), setting

forth the eligibility requirements for tax abatements for “new one and two-family residential

structures[.]” Consistent with N.J.S.A. 54:4-3.142(e)(1), “[o]wners of new residential properties .

. . are entitled to avail themselves of the opportunity to gain a five-year tax abatement when . . .

[t]he newly constructed residential dwelling unit [is] occupied by the owner thereof[.]”

       Abatements are essentially a form of partial exemption of local property tax authorized by

law. In addition to the guiding constitutional, statutory, and municipal ordinance laws, there are

also certain well-established principles applicable to exemption determinations. Because they

represent a departure from the fundamental approach of our statutes that all property bear its just

and equal share of the public burden of taxation, exemption statutes are strongly construed against

those claiming exemption. Princeton Univ. Press v. Princeton Bor., 35 N.J. 209, 214 (1961). Those

claiming an exemption from taxation have the burden of establishing their entitlement to

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it. Ibid. Strict construction does not require a rigid interpretation that would defeat the evident

legislative design, but taxation is the rule, and the claimant bears the burden of proving entitlement

to an exemption. New Jersey Carpenters Apprentice Training & Educ. Fund v. Kenilworth Bor.,

147 N.J. 171, 177-78, (1996), cert. denied, 520 U.S. 1241 (1997).

       It is undisputed that the Subject Property does not yet have a fully constructed single family

home with a certificate of occupancy. Although Plaintiff intends to reside at the Subject Property,

she does not live there yet. That Plaintiff plans to apply for the tax abatement, is not relevant. Her

intent to avail herself of the benefits of the Urban Enterprise Residential Tax Abatement Law does

not render the Municipality’s 2023 increase in her assessment improper. Plaintiff’s argument that

the land value of the assessment must remain unchanged from its preconstruction state until

construction is completed, and a certificate of occupancy is not supported by existing law.

       The court finds no legal basis for affording a taxpayer the benefits of the Urban Enterprise

Residential Tax Abatement Law until such time as the legal qualifications have been met. Plaintiff

has not received a Certificate of Occupancy and has not made the Subject Property her primary

residence. The abatement statute is for the moment inapplicable, and not a basis for modification

of the assessment by summary judgment.

       (3) The Assessment of the Subject Property is Disproportionate to Similar Properties

           and therefore it is overassessed.

       The assessment of real property, despite its assignment of separate land and building

values, is essentially a unitary concept pertaining to total true value for purposes of imposition of

an ad valorem tax. What is ultimately at stake for both the municipality and the taxpayer is the

ultimate number of total tax dollars a single piece of real property, improved or unimproved, is

accountable for. The petition of appeal and the form of county board judgment both require that

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the total assessment be addressed as well as each of its components, since the ultimate question of

fact to be determined is the true value of such property. See Hackensack v. Rubenstein, 37 N.J.

37-39 (1952); Matawan v. Tree Haven Apts., Inc., 108 N.J. Super. 111, 115 (App. Div.1969).

       It is a well-established principle that “[o]riginal assessments and judgments of

county boards of taxation are entitled to a presumption of validity.” MSGW Real Estate Fund,

LLC v. Mountain Lakes Bor., 18 N.J. Tax 364, 373 (Tax 1998). The complaining party bears the

burden of proving that the county board judgment is erroneous. Ford Motor Co. v. Edison, 127

N.J. 290, 313-4 (1992). See also Rodwood Gardens, Inc. v. Summit, 188 N.J. Super. 34, 38, (App.

Div. 1982) (concluding that on appeal to the Tax Court “a similar presumption [of correctness]

attaches to the county board judgment.”).

       The presumption of correctness stands “until sufficient competent evidence to the

contrary is adduced.” Little Egg Harbor Township v. Bonsangue, 316 N.J. Super. 271, 285-86,

(App. Div. 1998). The complaining party can only rebut the presumption by introducing "cogent

evidence" of true value; that is, evidence "definite, positive and certain in quality and quantity to

overcome the presumption." Aetna Life Ins. Co. v. Newark City, 10 N.J. 99, 105, (1952).

       In evaluating whether the evidence presented 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." Id. at 376 (citing Brill v. Guardian Life Insurance Co. of

America, 142 N.J. 520, (1995)). The evidence presented, when viewed under the Brill standard

"must be 'sufficient to determine the value of the property under appeal, thereby establishing the

existence of a debatable question as to the correctness of the assessment,'" or county board

judgment. West Colonial Enters, LLC v. City of East Orange, 20 N.J. Tax 576, 579 (Tax

2003) (quoting Lenal Properties, Inc. v. City of Jersey City, 18 N.J. Tax 405, 408 (Tax

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1999), aff'd, 18 N.J. Tax 658 (App. Div. 2000), certif. denied, 165 N.J. 488, (2000)). “Only after

the presumption is overcome with sufficient evidence. . . must the court ‘appraise the testimony,

make a determination of true value and fix the assessment.’”

        The presumption of correctness arises from the view “that in tax matters it is to be

presumed that governmental authority has been exercised correctly and in accordance with

law.” Pantasote Co. v. City of Passaic, 100 N.J. 408, 413, (citing Powder Mill I Assocs. v. Twp.

of Hamilton, 3 N.J. Tax 439 (Tax 1981)); See also Byram Twp. v. Western World, Inc., 111 N.J.

222, (1988).

        Real property’s fair market value as of a specific date (in this matter October 1, 2022) is a

determination of fact and not law. The Hudson County Tax Board cited Code 1B (Assessment Out

of range NJSA 54:3-22) as the basis for their judgment reducing the assessment. That statute states

in pertinent part:

                c. Whenever the county board of taxation is satisfied by the proofs
                that the ratio of the assessed valuation of the subject property to its
                true value exceeds the upper limit or falls below the lower limit of
                the common level range, it shall revise the taxable value of the
                property by applying the average ratio to the true value of the
                property except as hereinafter provided.

                d. If the average ratio is below the county percentage level and the
                ratio of the assessed value of the subject property to its true value
                exceeds the county percentage level, the county board of taxation
                shall reduce the taxable value of the property by applying the
                average ratio to the true value of the property.

        When a taxpayer appeals a county board judgment to the Tax Court, the court's review is

de novo, meaning that it hears the case anew and without regard to any legal conclusions or factual

findings made by the county board members. See N.J.S.A. 2B:13-3(b) (Tax Court “shall”

determine “all issues of fact and of law de novo”). When there is an appeal from a county board

judgment, the Tax Court's “jurisdiction is not as a court of review.” Rossi v. Twp. of Upper

                                                  11
Pittsgrove, 12 N.J. Tax 235, 240 (Tax 1992). This means that the court must “consider all

competent evidence and not only that which was presented to the county board.” Ibid. See also

Chevron U.S.A., Inc. v. City of Perth Amboy, 9 N.J. Tax 571, 581 (Tax 1988) (“[b]y use of the

term de novo the Legislature intended that this court consider an original assessment completely

anew”).

       For the court to fulfill its role, the matter requires a hearing with testimony under oath, the

admission of evidence, and the Municipality’s right to cross-examination and to put on its own

case and defense. The court must independently find if the ration of a property’s TOTAL

assessment when compared to the true market value of the property (assessment/true market value

= ratio) falls within the common level range of the municipality. If the ratio is below the lower

limit of the common level range, the total assessment should be raised and if the ratio exceeds the

upper limit of the common level range the total assessment should be lowered.

       The court presumes that the assessment of the Hudson County Board of Taxation is correct.

It is the Plaintiff’s burden of proving otherwise as it is she who filed the appeal to the Tax Court.

       As such, the issue of valuation cannot be determined by means of summary judgment.

       (4) Tax Assessment Should remain the same until a Certificate of Occupancy is

             issued.

          Plaintiff alleges that “under both the UEZ designation and NJ Statute 54:4-23a, the land

value should be assessed at the same rate as before construction” until a certificate of occupancy

is issued, and she can submit the necessary application for abatement. She states that the current

tax assessment is not valid, and it should be reverted to the 2022 assessment amount of $78,000

until such time as construction is completed.

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       The record is devoid of sufficient facts or law to support such a conclusion, and therefore

this argument cannot be a basis for modifying the assessment on summary judgment.

                                        III. Conclusion

       For the reasons expressed above, the court finds that there are issues of fact sufficient to

withstand a motion for summary judgment. Plaintiff is not entitled to a modification of the

assessment as a matter of law but must overcome the presumption of validity attached to the

Hudson County Board of Taxation’s judgment and establish by a preponderance of the credible

evidence that the assessment of the Subject Property is too high and falls outside the Common

Level Range as established by the Director of the Division of Taxation.

                                                            /s/ Mary Siobhan Brennan
                                                            Hon. Mary Siobhan Brennan, J.T.C.

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