Author: Jon Jordan

Tucker Continues the Trend of Cityhood

On Tuesday, November 3, 2015, the City of Tucker became the eighth new city to be incorporated in the Metro Atlanta area in the past ten years.  Voters came up short by just a few hundred votes from creating a ninth city, LaVista Hills. Proponents of municipal incorporation point to dissatisfaction with County government services, political corruption, higher crime rates, and tax dollars accommodating other areas of the County.  Opponents argue that municipal incorporation would simply add another layer of government that would not be able to serve them any better than the County. While the opponents of municipal control prevailed in blocking cityhood for LaVista Hills, Tucker became the eighth new city in ten years in the Metro Atlanta area that began with the creation of City of Sandy Springs, followed by the cities of Brookhaven, Chattahoochee Hills, Dunwoody, Johns Creek, Milton, and Peachtree Corners. Local government efforts continue as well for residents in South Fulton County pushing for the creation of a new city of South Fulton.

The creation of a new city begins with a grass roots effort to inform and persuade local residents to support and eventually vote for cityhood.  In the meantime, before the issue can be voted on by local residents, the Georgia legislature must first pass a bill authorizing the issue to be placed on the ballot. Residents in Sandy Springs waited more than two decades for the Georgia legislature to allow them to vote on cityhood, and the residents of South Fulton continue to wait for such authorization. Once authorized by the State legislature, it is up to the residents of the involved communities to vote on whether or not to incorporate.

The creation of a new city involves a shift of a number of governmental responsibilities from the County to the new city, such as fire departments, police, water, and even trash collection services.  It is up to the city officials to decide what services to take over and what to continue to pay the County to provide. For example, while the cities of Sandy Springs and Brookhaven have chosen to create their own police force, the new City of Tucker will continue to rely on the law enforcement services of Dekalb County. Cities will also assume the powers and responsibilities to issues bonds, levy taxes (such as a Local Option Sales Tax and ad valorem property taxes), create city parks, establish a municipal court system, buy, sell and use property, issue permits, and hire and fire city personnel.

The incorporation of a new city and the assumption of various governmental services and responsibilities can greatly affect individual residents and businesses alike. One of the largest and most comprehensive duties of a new municipal government is to create a new set of ordinances and regulations to govern its citizens, including a new zoning map and zoning ordinances regulating the use of private property.  In some instances, the new City zoning ordinance may disallow types of property usage in areas of the new City that the County previously permitted, or require new special use permits for certain property uses. These new ordinances can also be extremely costly for new property owners.

Zoning ordinances continue to be more strict and costlier, especially for business owners looking to purchase property in the affected area. Many ordinances follow a growing trend to require expensive improvements to properties before new uses will be allowed, including the creation of bike paths and sidewalks across the property, and even the construction of covered bus stops.  Parking lots may be prohibited from the front of buildings, and brick masonry privacy fences may be required.  Zoning ordinances also can control the design of any new building on property and what materials can be used.  While existing property uses may be grandfathered and protected from stringent new zoning requirements, individuals and businesses looking to move into new cities should familiarize themselves with any new zoning ordinances that could affect the use of their new property. Property owners adversely affected by zoning ordinances should consult with an attorney who may be able to provide advice on the property restrictions, and assist with any rezoning and special use permit needs.

The real estate attorneys at Hecht Walker have represented numerous purchasers, builders, developers and commercial property owners in re-zoning, special use permit and land use matters. Because we have represented several counties, cities, and local authorities, including development, housing, water and re-development authorities, we have developed an in depth understanding of the responsibilities, rights, and limitations of local governments on land use control.  Our familiarity of local zoning ordinances, the rezoning and permitting process, and local governments enable us to better help you protect your property rights. If you or someone you know are ever in need of zoning and permitting assistance in the Metro Atlanta area, please contact us at 404-348-4881 or at laurie@hmhwlaw.com.

This article is not intended to provide legal advice and should not be relied upon as such.  We strongly advise anyone with questions regarding their legal rights to contact an attorney directly in order to assess and advise on particular matters.  This article is based upon information available as of the date above, and contains general information that may change depending on particular circumstances of certain matters. 

Georgia law allows contractors, subcontractors and suppliers who supply work, labor or materials improving property for others, to claim an interest in and lien that property if payment is not made. The recording of such Mechanics or Materialmen liens can hold up the sale or refinancing of the property owner’s mortgage, or even result in the seizure and sale of their property. Consequently, these liens can be a very effective tool for Contractors, Subcontractors and Suppliers to ensure payment for their work, services or materials. However, the requirements and procedure associated with the creation and enforcement of liens are very specific and strict. Failure to properly follow these procedures can result in the forfeiture of lien rights and possibly legal liability by the property owner against the lien claimant. Prior to filing a lien, it is important to ensure that (1) there is a legal right to file a lien, and (2) the lien filing and lien perfection* procedures are properly followed.

One of the most fundamental considerations to determine lien rights is whether there is a contractual relationship between you and the property owner or contractor, either directly or through a direct chain of contracts. Where a contractor is hired to perform work for a property owner, he/she is recognized as that owner’s agent. That Contractor’s direct Subcontractor for the project has such a direct relationship with both the contractor and owner. A subcontractor of the Subcontractor does not. Subcontractors and suppliers providing labor or materials to other subcontractors should always ensure that the subcontractor requesting the work or materials was authorized to do so by the Owner or General Contractor. If not, the work or materials may not be secured by a Mechanics or Materialmen lien.

Where there is no direct relationship, remote subcontractors and suppliers may be required by law to provide notice of their work to the contractor and owner. In many cases, a Notice to Contractor, identifying the work to be done, as well as other information must be posted and recorded with the Superior Court of the county where the property is located. This allows the Contractor and owner notice and an opportunity to object to the work or supplies before they are provided. Work that is not authorized by the Property Owner or Contractor cannot be liened.

In Benning Const. Co. v. Dykes Paving & Const. Co., 263 Ga. 16 (1993), a Subcontractor hired a paver to do work on a project it had been hired to do. The contract between the Contractor and original Subcontractor had a provision that prohibited further subcontracting out work without the Contractor’s consent. The paver failed to pay for the asphalt material used for the job and the supplier filed a lien. The Georgia Supreme Court held that because the paving subcontractor was not authorized and expressly prohibited in the original Subcontract, the original Subcontractor’s agreement with the Paving Company was not within a direct contractual line with the Contractor. Thus the supplier had no lien rights for recovering payment for its work.

One area where Owner authorization is often overlooked is when a tenant of property requests work, services, or materials for the improvement of the leased property. The tenant is not necessarily considered an agent of the owner, and thus it is important to ensure that the work, services and materials requested by the tenant is actually authorized by the owner of the property beforehand. As stated in Worley v. Cowper Const. Co., Inc., 259 Ga. App. 263 (2003), By contracting for improvements to be made upon leased premises, a tenant does not create a basis for imposing a materialman’s lien against the landlord’s interest in the premises. Finally, Contractors, Subcontractors and Suppliers should all note that Mechanics and Materialmen liens cannot be filed against government property for government projects.

All Contractors, Subcontractors and Suppliers should ensure that the work or supplies they provide for the improvement to property is authorized by the property owner or the owner’s Contractor. Without such authorization, direct or implied, the worker or supplier will not be able to avail itself of the lien protections established by Georgia law and take the unnecessary risk of not being able to recover payment for their work, services or materials. Ensure your ability to take advantage of the payment protections established by Georgia lien statues by contacting the attorneys at Hecht Walker.

*Perfecting a lien ensures statutory procedural requirements are met so as to make the lien legally enforceable.

This article is not intended to replace the need to contact legal counsel in the event you would like to ensure or protect your lien rights. This article is based upon applicable laws as of the date above, and contains general information that may change depending on particular circumstances of certain matters. Please note that every situation is different and contains unique facts that may allow for a successful claim or defense or not. We always advise that you speak to legal counsel directly in order to learn how to ensure, preserve and protect your lien rights.

Next Installment – Perfecting Your Lien Rights.

Owners of real estate, whether residential or commercial are taxed for buying their property, selling their property, and even for simply owning their property. Each year around November, property owners receive a bill for ad valorem taxes on their real property[1]. This bill is a combined tax assessment made by the State of Georgia, the County where the property is located, and in some instances the local municipality as well.

Unlike income taxes which are based upon verifiable data, ad valorem property taxes are often based upon a property valuation opinion made by a panel of taxpayers summoned to serve on the County Board of Tax Assessors. Often times, these opinions are based upon generalized assessments of the type of property being taxed and the general location of the property, without knowledge or consideration of the particular characteristics and condition of the property.  After all, local governments simply do not have the resources to make individualized assessments of each and every property in the County before each tax assessment every year.  As such, it is up to the taxpayer to ensure that his/her properties are valued and taxed properly.  Otherwise, the taxpayer could risk overpaying the government thousands if not tens of thousands of dollars each year.

WHAT IS FAIR MARKET VALUE?

The Georgia Department of Revenue has established guidelines to assist County Tax Assessors with determining property values. Georgia statute defines a property’s fair market value as the amount a knowledgeable buyer would pay for the property and a willing seller would accept for the property at an arm’s length, bona fide sale. The best indicator of fair market value is the sale amount for a recent arm’s length, bona fide sale of the taxpayer’s property.

However, where no recent sale occurs, there are three alternate general methods by which to determine a property’s fair market value. The first method is the Sales Comparison Method in which recent sales of similar properties in similar locales are used as indicators of the fair market value of the taxpayer’s property, and adjustments are made depending on apparent differences.  For income producing properties such as shopping centers, office buildings, warehouses, and hotels, a property’s value is the potential income to be generated by the property which is estimated by projecting a future income stream that reflects typical management and current market conditions. A third and less used method is determining the cost of replacing the property as of that tax year. These three methods involve more complex factors as well but illustrate how differences of opinion can arise from the valuation of property.

WHEN TO DISPUTE A TAX ASSESSMENT

Owners of real property in Georgia are required to file a real property tax return with their local Tax Assessors office by April 1[2], declaring what they believe the fair market value to be.  The local Board of Tax Assessors then makes its own determination of value and in the Spring each year, mails each taxpayer an official tax assessment, notifying the taxpayer of the fair market value the County placed on the property, and the assessed value of the property. The assessed value is 40% of the fair market value of the property and is the value that is taxed by the County. Property owners should consider disputing a tax assessment when the County’s fair market value determination exceeds what the taxpayer believes the fair market value to be.

As a general rule, the savings resulting from a successful tax appeal can be estimated at $1,500.00 for every decrease of $100,000.00 from the County’s opinion of the property’s fair market value. For example, one of our firm’s clients received a tax bill for its commercial property valued at $8,301,000.00.  After an appeal, our firm was able to assist in having the valuation lowered to $5,900,000.00, saving our client more than $360,000.00 for that tax year alone. While we cannot guarantee this type of recovery, tax appeals can be a very effective means by which to lower the costs of owning real property.

A taxpayer has 30 days from the mailing of his/her assessment to dispute the assessment by filing a notice of appeal with the local Tax Assessors Office. Prompt action is required to avoid a waiver of appeal rights. It’s in your best interest to work with a commercial real estate attorney.

HOW TO DISPUTE A VALUATION ASSESSMENT

Every property owner has the right to dispute State and local government real property ad valorem taxes by mailing or delivering in person a simple Notice of Appeal to the local County Tax Assessor’s Office within 30 days from the County’s mailing of current year’s tax assessment notice. Taxpayers should keep evidence of their mailing or delivery of the notice to better protect their appeal rights. Using certified mail or gaining a time-stamped copy of your filing from the Assessor’s office upon personal delivery are both good methods of preserving evidence of timely filing. There are three grounds upon which a taxpayer may base its dispute (1) fair market value (2) uniformity, and (3) taxability. The grounds for appeal must be expressly stated in the Notice of Appeal or are considered waived. In an abundance of caution, taxpayers should preserve all three grounds for appeal.

A. Board of Assessors Reevaluation of Tax Assessment – Upon the filing of a Notice of Appeal, the County Board of Tax Assessors will review the taxpayer’s dispute and reevaluate the fair market value of the taxpayer’s property. If the Board of Assessors makes any change in the taxpayer’s property tax assessment, it will provide notice of such to the taxpayer by certified mail. The taxpayer then has 30 days to dispute the reassessment by filing a Notice of Appeal of the reassessment with the County Board of Tax Assessors. The taxpayer’s appeal is then sent to the Board of Equalization which will schedule a hearing date for the taxpayer and County Tax Assessor’s Office.[3]

B. Board of Equalization – If the County Board of Assessors does not resolve the taxpayer’s tax appeal to the taxpayer’s satisfaction, a hearing date will be scheduled for the County Board of Equalization to consider the County’s tax assessment and the taxpayer’s concerns, or if properly requested the taxpayer may have the alternative of forwarding the dispute to arbitration or having the matter heard by a neutral hearing officer. The Board of Equalization consists of three (3) members selected by means similar to being summoned for jury duty. The County Tax Assessors office will have the opportunity to argue why it believes the tax assessment to be correct, and the taxpayer will have his/her opportunity to argue otherwise.  The Board of Equalization will often mail the taxpayer its decision the same day. If the Board of Equalization did not resolve the appeal to the taxpayer’s satisfaction, the taxpayer may then continue the appeal by filing a Notice of Appeal to Superior Court. As with prior appeal notices, the Notice of Appeal to Superior Court is filed with the County Tax Assessor’s Office and must state all grounds upon which the appeal will be based (1) fair market value, (2) uniformity, and/or (3) taxability.  The taxpayer has 30 days from the mailing of the Board of Assessors’ decision to file its Notice of Appeal to Superior Court with the County Tax Assessor’s Office.

C. Superior Court – Upon the filing of a Notice of Appeal to Superior Court, the County Tax Assessor’s Office will certify (file) the appeal with the Superior Court and send the Superior Court all documents presented to the Board of Equalization. The taxpayer will then receive a Civil Action File number and the action will proceed much like an ordinary lawsuit. While individual taxpayers may represent themselves in Superior Court, the law requires that businesses and other entities be represented by legal counsel.

Our commercial real estate lawyers at Hecht Walker, P.C. have provided valuable and effective services for numerous companies looking to gain relief from their real property tax bills. We have been successful in resolving tax appeals for our clients at the Board of Equalization level and in litigation. In the event you are interested in gaining more information about how we might be able to assist you in seeking real estate property tax relief, please do not hesitate to contact us at 404-348-4881.

This article is not intended to replace the need to contact legal counsel in the event you would like to preserve or appeal your tax appeal rights. This article is based upon applicable laws as of the date above, and contains general information that may change depending on particular circumstances of certain matters.  Our firm advises cities, counties, authorities, and real property owners regarding land use and property taxation issues as a part of our practice. Please note that every situation is different and contains unique facts that may allow for a successful claim or defense or not. We always advise that you speak to legal counsel directly in order to learn how to preserve and protect your tax appeal rights.

Attorney Jon Jordan’s legal practice areas are commercial disputes, property tax appeals and government issues. Prior to becoming an attorney, Jon worked for Senator Arlen Specter, serving as Deputy Press Secretary, Legislative Aide for Foreign Affairs and Defense issues, and as Special Assistant to the Senator.