The question comes up constantly: When is it time to sue my appraisal district over the value of my property?
A lawsuit, of course, is the last resort. No property owner wakes up in the morning and says, “I can’t wait to take the appraisal district to court!” Every property owner has a million things they would rather do.
However, in some cases, a lawsuit is necessary.
The cold, hard truth is that simply protesting the property’s value often doesn’t accomplish much. How many of us have heard from colleagues who own a commercial lot, an apartment complex, a business park or a vacant strip center where their appraisal protest got them almost zero reduction in their tax valuation?
It happens that way all the time because appraisal districts and appraisal review boards (ARBs) have absolutely no incentive to cut your valuation and, in turn, your tax bill. The protest and review process often are little more than a dog and pony show, and they don’t like giving you a trophy!
This brings us full circle to the question of when it makes sense to sue.
One way to get at that question is to look at how far off the appraised value really is. If the discrepancy is only a few thousand dollars after you’ve met with the ARB, then a lawsuit probably isn’t worth the time and expense. Obviously, the bigger the gap between the ARB’s number and your own valuation of the property, the more reason you have to sue. When you get into hundreds of thousands of dollars difference it’s extremely likely you’ll recover far more in reduced taxes than you’ll pay in attorney fees.
The other major factor is whether you have strong evidence that the appraisal district’s valuation is wrong. Just like the protest negotiation, you need to do your homework and gather objective facts to support your lawsuit. The good news is that the district court judge should be much more receptive to fact-based evidence than the ARB.
Think of it this way: The ARB hearing is like a trial where the judge and the defendant are the same person. Guess who wins almost every time! But district court is a level playing field where your odds of success are substantially more in your favor.
So, if you’ve gone through the usual protest and ARB hearing but you are convinced the final valuation rendered by the ARB is still way off base, it’s time to take them to court. In many cases, that’s the only way to force them to take you seriously.