Mammoth Real Estate Q&A – Taxing Time For All

Q: The bio on your blog site says you are member of the Mono County Assessment Appeals Board, what’s that all about??

A: Despite being a licensed real estate broker for a couple of decades before joining the Assessment Appeals Board (AAB), the whole process was foreign to me. And from what I can tell it is off the radar of most of the real estate industry and property owners alike. The roller coaster of real estate acquisitions and values in the past few years has shifted the process from the rather mundane to the contentious. And while the process is quite serious, I can’t help but to see the humor and irony in it.

The Appeals process all centers around the law and the art of appraisal. Property tax law in the State of California is voluminous. I am told that attorneys who specialize in it only specialize in sections of it. Through the Appeals hearings I’m just beginning to get an understanding of the Rules and Sections of the law. The appraisal side is what I am much more familiar with. While I am not an appraiser, valuing real property is a big part of my business. And it is definitely not an exact science, especially here in Mono County. The meeting of the law and appraisal is where I find most of the humor. I’ve concluded that attorneys and appraisers would not be good at judging a beauty pageant. The hearings become arguments of the law versus the ambiguity of real estate appraisal all in the vein of the State needing to protect the raising of tax dollars. Witnessing attorneys and appraisers argue and posture over appraisals can be enlightening at first, but ultimately becomes rather monotonous. I find myself asking, “How did I get here?”

It all started with a vacancy on the Board. Apparently, positions on three-member Board aren’t highly sought after by Mono County citizens (it doesn’t pay anything other than mileage). But two of our local County Supervisors thought I was the man for the job. I had served on the ML Planning Commission with one of them. I had been out of the public office and volunteer realm for a while and happily running my business. They convinced me my background was a good fit for this specialized position. One of the Board members assured me the time involvement was minimal since so few people appeal their property tax assessments (so much for real estate “always going up”). I liked the obscurity of it while soothing my guilt over not being volunteered at something.

The next thing I know I went through training and they gave me a huge pile of books, most of it legal oriented. What I learned is that AABs have Constitutional and Statutory authority in the State of California and are governed by the Property Tax Rules. Here in Mono County, this quasi-judicial, three-member board falls under the scrutiny of the Fair Political Practices Commission and conflict-of-interest rules (including making public filings) and are also required to complete an Ethics class every two years (I always remember one of my former associates at RE/MAX saying “you can’t teach ethics”). For the layman, common citizen and property owner, the Board’s function is the checks-and-balances that the public has to challenge the local Tax Assessor’s valuation of their property. In California and under “Prop. 13” those new valuations basically come when there is a change of ownership or new construction at the property. That is when the Assessor’s office performs an appraisal of the property to establish a base value.

The typical Appeals hearing includes: the Assessor and the County’s staff of appraisers, in particular the appraiser(s) who worked on the appraisal of the property that is subject to the appeal, a specialized property tax attorney representing the Assessor’s office, a member of the County Counsel’s office (to ensure the administrative process is correct), the County Clerk’s office taking the record, and the applicant who could simply be the property owner and/or their representative who is likely an attorney and/or appraiser. Sometimes, when the stakes are high, the applicant has a court reporter to record the transcript of the hearing. And of course the three of us who comprise the AAB. (The most fun for me is all of this occurs in the lovely historic courthouse in Bridgeport.)

The hearing itself can range in temperament from rather casual to almost a courtroom shootout. Many of the formal rules of a trial are relaxed especially the rules of evidence. But there are still plenty of formal rules. Any applicant not represented by counsel should be very clear about what is required of them, from beginning to end. My observation is that the Assessor’s office bends over backwards to help. For property owners appealing valuations of owner-occupied properties, the burden of proof is on the Assessor’s office. The evidence is by-and-large appraisal work, and that’s where things get messy. Any appraisal can be torn apart. Adjustments are a key element to any appraisal report and they are subjective by nature. (Banks will rely on a minimum of three opinions before pricing an REO.) That’s where it becomes a beauty pageant and the debate could go on endlessly, and sometimes it goes on way too long.

Ultimately, after all of the evidence is heard, and the witnesses/appraisers are allowed to be questioned and cross-examined, and the applicant and Assessor’s office are allowed summarize their cases, the Board has to make a decision. And usually it is all taken into submission and a formal decision is made at a later time. Sometimes the applicant is unsuccessful simply because they didn’t follow the rules. Other times they just didn’t present a good case, and basic whining doesn’t work in this forum. Sometimes the paid experts and consultants don’t present anything compelling either, but it probably makes their clients feel good that they fought the fight. For the common man a hearing is not a pleasant experience, he is simply out-gunned by the County and overwhelmed with legal lingo and formalities. The better tack is making a timely appeal and then sitting down with members of the Assessor’s office and working out a reasonable valuation. Getting to a hearing is expensive for the County, so once it happens they take it very seriously.

All of this has become rather critical for many property owners because of the recent decline in property values. People who bought in the 2003-07 timeframe are sitting on valuations that may be up to twice the current value. Many owners want their assessed values to be instantly dropped to a distressed sale that occurred last week. The reality is assessed valuations and appraisals are historical in nature. Owners with high valuations can only expect a stair-step down in valuations. And most values have now flattened so the downward trend is over, at least for now. Expectedly, the volume of appeals has risen dramatically in the past couple of years. The Assessor’s office has handled a huge volume of work to review (and reduce) these valuations (known as “Prop. 8” reductions”). They have also met, communicated with, and educated many property owners including those with appeals filed. Most never make it to hearings. Again, the process is burdened with administration and paperwork, and filing your appeal too early or too late will certainly get it tossed out. The latest trend seems to be appeals on very expensive homes, with the homeowners (their attorneys) arguing for substantially less assessed values while their local Realtor® is marketing the property and justifying a price for substantially more. Imagine that.

While I have only been on this Board for the past six years I have had the unique experience of three different Assessors. The Assessor is a publicly elected position and here in Mono County we have had a recent and quite interesting but positive transition. The first was the long-standing Assessor who was a local boy. The next an outsider with years of experience who came in to take over and did get elected but eventually retired. And now we have Jody Henning who brought loads of experience and progressive management as well as local knowledge. The Office of the Assessor in Mono County has arrived in the 21st century.

Kudos go out to my fellow Board members Mammoth real estate attorney Rick Liebersbach and north county Walker River real estate broker Rose Murray. Both are incredibly competent in their roles, I’ve learned plenty from both and nobody can fill their shoes. I’ve had to fine-tune my impartiality. I can also emphasize the value of volunteering in the community. Most people don’t realize that when business is slower that is the perfect time to volunteer. In the 90’s I was volunteered for all kinds of things. All of that volunteering really paid off, especially the invaluable real estate related knowledge that I gained and about the workings and economics of the community, and the people I met and learned from.

18 thoughts on “Mammoth Real Estate Q&A – Taxing Time For All”

  1. Wish I could share in the humor/irony. Having bought in 2004 and requesting a Prop. 8 review in 2008, I was adjusted back to the 2004 purchase price.

    My unit is one of 24 so it shouldn't be to difficult to I.D. the complex. Both my neighbors one with a larger unit and one with the same floor plan reversed are paying thousands of dollars less in property tax based on their purchase price since the market has tanked.

    I fail to see the humor in me using the "process" only to pay thousands more in property tax then my neighbors as well and being upside down on the purchase.

    I am contesting last year valuation based on the above stated facts . I think being made to jump through the hoops to get the same Tax base as my neighbors is a problem that could easily be addressed.

    This is not my idea of a public service that I could take pride in! Public service is suppose to serve the public, not ones business interest. Fair and equal treatment for taxpayers is what you should be writing about, not how to falsely inflate valuations and blame appraiser and lawyers.My downward step has landed me at the 2004 evaluation to say that they are over is a bunch of BULL!

    The purchase price on the open market is the best indicator of a fair evaluation. All these supposed experts is how we got into this mess, I have little faith that these same people are unbiased and have my best interest in mind.

    Impartiality, I know it when I see it and frankly I don't see it here. This reminds me of a past post about WEASELS!

  2. Just in from some very nice skiing. No spring slush to be found on this mid-April day.

    Yeah, my reading comprehension goes down too when all I see is red.

    California property tax law and Prop. 13 are a double-edged sword. Owners hate it when their assessed value is higher than their market value. But they sure love it when their assessed value is less than their market value, many times far less.

    Sorry to hear about your asset devaluation, I haven't heard of anybody else with this problem.

  3. There is nothing wrong with my reading comprehension, in fact I'm quite adept at reading between the lines. I comprehend that brokers are notorious for feathering their own nest.

    This is not about my asset devaluation, it is about the Prop. 8 appraisal process that is not being applied fairly across the board based on asset devaluations market wide.

    Your pompous attitude speaks volumes, I for one think you are not impartial and should resign from the Assessment Appeals Board.

    These boards were created to give a sense of legitimacy to the process. You have convinced me that the jury is rigged for the price of gas.

    I think this an area that the Grand Jury needs to investigate in order to get a handle on an agency that is dysfunctional at best. They need to compare the assessments of the politically connected with a sampling of the average citizens of Mono County.

    By the way, have the owners of that mountain you skied on today paid their property taxes yet?

  4. If the Grand Jury (I've been on the Grand Jury) could be convinced to investigate the AAB and the County Supervisors would ultimately ask me to step down it would be a "Make My Day" moment. Until then I will work on my impartiality.

    BTW, I know I'm over-assessed on the home I completed in 2007 on a lot I bought in 1997, but I'm not comfortable filing an appeal. So go ahead and make my day….

  5. Wow…kind of makes you wonder WHO asked the original question for this blog??!!

    Sounds like we're talking about nickels and dimes here.

    If someone wants to make some money with their investment, stay in the city, and stand on a street corner with a sign.

    If they want to enjoy the mountains, skiing and fishing, then come to Mammoth. I've always been told, "if you don't live here, don't plan on making money from your property".

  6. I wish we were talking nickel and dimes. The fact is we are talking hundreds of properties over assessed totaling many thousands of dollars.

    This is a financial hit that will cost Mono County jobs, the county employees that assess our property taxes have a financial interest in keeping them inflated.

    People who's incomes are based on a properties sales price also have the same bias.Their incomes have been impacted with both falling real estate sales and prices.

    Again it is the tax payer bailing out public and private interest, in this case with inflated assessed values( Tax dollars ).

    It is not rocket science, you can't expect to let the wolves guard the hen house and still plan on being in the egg business.

    I have every intent on making Paul's day, more important is making government employees once again accountable to the people that employ them.

    As the article states the odds are against the common man for the obvious reason that tax dollars is the nectar from which they all feed. Except of course the three members that are in it for the public service and a little gas money.

  7. Anonymous,

    I can understand your frustration on paying higher taxes, but you did buy the property at a higher price. So the fault lies with you. As Paul said, Prop. 8 work for you and sometime it does not.

    Personal attacks on Paul are not so nice. Nobody is fully objective, but he is pretty good IMHO. The fact that your post showed up here says a lot about him. At the end of the day, his paycheck depends on the RE in Mammoth, so use your best judgement, without attacking anyone.

    Mammoth RE is coming down to decent levels and the next wave of foreclosures should complete the correction. Make sure you have cash ready.

  8. That is the whole point my friend of mensa. I could sell at a loss and the buyer gets a lower tax rate! So why don't they show they same courtesy to existing owners that have been paying the higher taxes when values warranted? That is the intent of Prop 8 reviews that these greedy public servants haven't properly applied. By forcing the sale to make the correction the realtors get another commission, so does the broker!

    I am not attacking Paul, just calling a spade a spade. Do good'ers are donating their time at disabled sports or friends of the library etc. Not masquerading as public servants in this charade and then blogging about it IMHO.

    Now an attack would be removing my size 11.5 from that that big ass you use to sit and think with. Counting your cash waiting to capitalize on someone else misfortune is pathetic. See the difference?

    I didn't think so Einstein!

  9. That may be the laugh of the day! Disabled sports, friends of the library, and all the rest don't want me to volunteer, they just want my CASH donation and for me to leave them alone. Talk about the unseen tax of being a business owner in Mammoth. Luckily, I can write most of it off as "advertising."

    As my accountant said years ago "they'll want your work, your wealth or your wisdom, so allocate appropriately."

    Man, I'm glad I don't wake up angry.

  10. Insulting others won't get you anywhere. Since YOU are the one MORON who bought HIGH, I'd recommend you join Mensa.

    I am not in RE business BTW. I employ people here in cali. and build real stuff.


    Also, your logic of 'if I sell at lower price' is flawed. Laws don't work on 'if so' scenarios. If you are so upset, sell your property and write off your loss.


  11. I had a very smooth appeal experience with the assessor's office. Jody Henning and her office did go out of their way to explain things to me as well as proactively work on my appeal. I thought her free workshop/seminar a year ago was a great help and it was good to see concerned property owners there. Prior to the full-blown appeal I did ask the assessor's office for a "taxable valuation review". I was dismayed at the response, albeit immediate, from their in-house appraiser stating "no change in valuation" hence the appeal.

    After many phone calls we were able to reach a "stipulation" for the appeal on the taxable valuation that I felt was fair. This was just prior to having the appeal being heard in a hearing. The assessor's office was always very helpful and Jody herself was very receptive to returning emails which I was very impressed with. Considering the amount of appeals, let alone the fact that the assessor's office was going to review all valuations of purchases made since 2005, I have to give them some credit for how much they got done.

    Just wanted to put in a good word for how much work the assessor's office put in. I'm also assuming the appeals board put in a great deal of work, so thanks for all the pro bono work Paul.

  12. > Why does this woman use such bad
    > language, even if she is a MEN-SA
    > member.

    Be careful, this woman has size 11.5 foot, or was it mouth?!

  13. Touche' Paul, I was angry having to get up that early in order to get to an airport three hours early so some moron can ask if I packed my own bags, I had no bags and I don't feel any safer with them wasting of my time! Brings out the gadfly in me. Then throw in a little jet lag/confusion, makes me question whether it is worth the effort to travel to warmer climates anymore. Until I check the Mammoth weather forecast, now to get a full night sleep and all is well being worth the hassles once again.

    To the imbecile who wants to know what I do for work, the answer is nothing. I troll the internet when bored, sparing with thinkers and I guess insulting those that are to lazy to think for themselves. Prodding those who have potential of thinking for themselves.. I employ nobody and build nothing with independent contractors doing non existent work.

    For the last time the equation here is that two identical properties should be valued equally after a Prop. 8 review!!!!!!!!! anything else is a bunch of Hocus Pocus tax assessors B.S.

    You are correct about that I was dumb enough to buy at the more or less the high, but smart enough use someone else money. Kind of gives a different definition to the term broker. But It would hurt to be called a weasel by a broker, broker. Thanks for the tax advise, I'll stick with H.R. Blockheads because they use my real numbers.

    jimbob your story made me a little misty and jealous. I'm sorry to say it isn't mine, I'll keep trying though ;^) I have a connection on the appeals board.

    To the two tough persons who insult women with foul-large mouth and feet! That wouldn't be my preferred complement either but I don't think they have any say in the manner.

    It's been a riot, but I am now tied up with Brokers without borders listening to public service appeals. No pun intended but I have always considered pubic service the higher calling.

  14. Geez! You used money from someone else to purchase an overprice 'condo' and are whining about taxes. Priceless! You must walk among Gods in the weasel world.

    It is very clear that you are a one-man shop who hires independent contractors to do the 'real' work. Your story just keeps getting better.

    Also, looking at the times you have posted your comments (6:36AM, 4:03PM, 11:49PM), I don't think you have much work to do.

  15. Yes the Tax money is my money, LoL whine , whine

    I already told you I don't work, in the true sense of the word. Only because you asked!

    You ever hear of time zones or the international date line my mental midget?

    Off to play in weasel-dumb……


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