Offer to reassess home raises red flag
If you’re a homeowner, you may have received an official-looking letter recently informing you that your property needs to be reassessed for tax purposes. The cost of the reassessment is $179, but you’ll have to pay an additional $30 if you don’t mail in your application within the next few weeks.
“It’s a scam,” Los Angeles County Assessor Rick Auerbach told me. “They’re trying to make you think the letter comes from my office so you’ll pay them to do something you could do yourself for free.”
The letter is actually from a company called Property Tax Reassessment, which gives a Los Angeles post office box as its address. Auerbach said the company’s letters have prompted a raft of complaints from homeowners to his office and to other assessors statewide.
“This outfit is particularly disturbing because they seem to be sending their notices to everyone,” said Larry Stone, Santa Clara County’s assessor in Northern California. “The letters are terribly deceiving.”
I’ll get back to Property Tax Reassessment in a moment. First, it’s worth asking whether companies like this actually offer some value to homeowners at a time when property values are down by double digits in most areas.
Auerbach and other California assessors say no. They say they routinely reappraise people’s homes, whether they’re asked to or not.
In L.A. County, roughly 318,000 single-family houses and condos were given a second look last year, Auerbach said, and 128,000 of that number had their assessed values reduced by an average $73,000. That represented an average tax savings per home of about $750.
But you have to wonder: What incentive do county assessors actually have to lower people’s tax obligations, especially with cash-strapped local governments all but begging for spare change from state and federal authorities?
“The incentive is that I and my staff have to do what the law requires us to do,” answered Auerbach. “The job of the assessor is to put the right value on properties.”
Even so, more than 78,000 California homeowners felt they’d been shortchanged by the assessor’s office last year and requested additional appraisals.
Of that number, Auerbach said, about 35,000 did indeed merit lower property values, with the average reduction running $93,000.
About 11,000 of those 78,000 applications were submitted on behalf of homeowners by private companies. “I don’t need to enlighten anyone on the status of the budget,” said Eliav Dan, managing director of a Calabasas company called Assessment Appeal Advisors. “There’s no incentive for assessors to just give money away.”
Unlike Property Tax Reassessment, Assessment Appeal Advisors asks for no money upfront. Instead, eligible homeowners agree to hand over half of whatever amount is saved in taxes during the first year after a home’s appraised value is reduced.
Moreover, Dan said his company would stick with clients throughout the process. If an assessor’s office rejects an application for lower taxes, he said the company would mount an appeal -- a time-consuming service I have yet to see offered by any other such outfit.
Property Tax Reassessment may offer legitimate value for the money, but it doesn’t pass my smell test.
When I called the company and identified myself as a journalist, a service rep said she couldn’t connect me with anyone in the corporate office.
“It says right here,” the rep said as she shuffled the pages of her script, ‘Calls from the media: No information is to be given out except the P.O. box address.’ ”
A supervisor subsequently coughed up an e-mail address for the company, but no one responded to my request for an interview.
According to the California secretary of state’s office, Property Tax Reassessment was based as of January 2008 at an address in Murrieta in Riverside County.
The address isn’t for an office. The site is in fact a five-bedroom house in a quiet residential neighborhood. According to property records, the house was purchased by a married couple for about $600,000 in February 2007.
It was foreclosed upon by Washington Mutual in July 2008. About a month later, WaMu sold it to someone else for about $340,000. I couldn’t track down the former owners of the house.
Auerbach said his office would be reviewing about 500,000 properties this year. By April, he said, L.A. County homeowners will be able to check whether they’re on the review list by entering their address at the assessor’s website.
“If you find that you weren’t in the review but think you should have been, you can send in a form,” Auerbach said. “Every form that gets sent in gets put into the review.”
Owners of reviewed properties will be notified by July whether their home values -- and property taxes -- will be going down. If no reduction is made, a second review can be requested. If that’s still unsuccessful, a formal appeal can be made.
“All you have to do to request a review is put your name and address on a form,” Auerbach said. “If you think that’s worth $179, I have something else to sell you.”
Actually, there’s a bit more to it than that, at least if you want fair market value for your home. You’ll need to put together a file of comparable properties and recent transactions, and basically make the case for why your property tax should be significantly lower than it is now.
I’ll be checking in a month or so whether my home is on the review list. If not, I’ll send in the form.
And if that doesn’t work, I’m thinking the no-money-down pitch from Assessment Appeal Advisors looks a whole lot more enticing than paying $179 for a helping hand from a P.O. box.
David Lazarus’ column runs Wednesdays and Sundays. Send your tips or feedback to firstname.lastname@example.org.
Would you pay for help lowering your property tax?