A legal or administrative proceeding challenging a property's assessed value with the goal of reducing property taxes. In NNN leases, tenants may share in tax appeal costs but should also receive the resulting savings.
Tax appeal costs (attorney fees, appraisal fees, filing costs) can be included in operating expenses only if the lease permits. When an appeal succeeds, the resulting tax reduction should be passed through to tenants as a credit.
A landlord filed a tax appeal ($35,000 in legal fees) and billed those costs through the CAM pool. The appeal succeeded, reducing taxes by $180,000 over two years. The landlord credited tenants for only the first year of savings and kept the second-year reduction without disclosure.
If you paid tax appeal costs through CAM, follow up on the outcome. Request confirmation of whether the appeal succeeded and how savings were credited.
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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.
