A one-time or periodic governmental levy imposed on property for specific infrastructure improvements that differs from regular ad valorem property taxes. Pass-through rights for special assessments vary by lease.
Leases that pass through property taxes may or may not include special assessments - the distinction depends on whether "taxes" is defined to include governmental assessments of all types. Multi-year installment special assessments present allocation timing challenges.
A city imposed a $2.1M special assessment for road improvements, billed in 10 annual installments. The landlord passed through the full annual installment despite the lease's tax provision only covering "ad valorem property taxes" - a narrower definition.
When you receive a tax reconciliation, ask specifically: does this include any special assessments? Confirm your lease permits pass-through of special assessments vs. only regular property taxes.
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Find My OverchargesThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.
