Prepare for Increased Property Valuation Challenges

by | Oct 14, 2020 | Construction & Real Estate, COVID-19 (Coronavirus), General

The COVID-19 pandemic has impacted our lives and businesses in ways we never envisioned.  The real estate market has certainly not been spared.  Office space, hotels, restaurants and retail establishments have been particularly hard hit.  Demand for office space is likely to decline given our adaptation to working at home.  As of July 30th, the American Hotel and Lodging Association reported that more than half of hotel rooms were empty across the country with many hotels being completely closed.1  Many of our favorite restaurants and retail establishments have also been forced to close during the pandemic.  All of this is likely to affect real estate values for years to come.    

Starting in January, property owners will have the option to file complaints with their county boards of revision seeking to lower the county auditor’s value assigned to their properties (and their tax bills).  We anticipate that many property owner’s will take advantage of this opportunity.  However, their complaints may be premature.  That is because real estate taxes are paid one year in arrears.  Thus, any complaint filed next year is for valuation during the 2020 tax year.  By law, boards of revision must establish value next year as of January 1, 2020.  As of that date, the COVID-19 pandemic had not greatly impacted our lives or the real estate market.  Nonetheless, many property owners will not realize this distinction and will file anyway.  

County boards of revision understand and appreciate this aspect of the law.  However, the individuals who sit on those boards, which sometimes include elected officials, are often empathetic toward property owners who face significant challenges with their commercial businesses or properties.  For that reason, it is not uncommon for boards of revision to grant relief even though they technically should not do so under law.  They are easily able to do so when property owners are unopposed.

Faced with similar issues during the great recession, the Ohio Board of Tax Appeals made it clear that general references to decreased real estate values will not be enough to sustain a reduction in property value.  In Price v. Summit County Board of Revision, 2012 WL 440783 (February 7, 2012), a property owner sought to reduce the value of his properties due to the recession and foreclosure crisis.  The BTA rejected his request because it “has consistently rejected the notion that real property values must necessarily rise or fall commensurate with some preconceived notion of ‘historical trending’ or inflationary/deflationary rates.”

To help ensure county boards of revision uphold the law, school districts are advised to strongly consider filing counter-complaints against requests for reduction that appear unwarranted.  Under R.C. 5715.19, boards of education are entitled to notice of all valuation complaints that seek to decrease the value of real property by $50,000 or more.  Boards of education have the option to file counter-complaints contesting those decrease requests within 30 days of receipt of that notification.

What this means for your district?

Decreases in value through the county board of revision process directly impact the tax revenue received by school districts.  Any decrease in valuation will result in a refund issued to the property owner.  Those refunds are directly taken from school funding via the county treasurer settlement statements. We anticipate that school districts will face many decrease complaints next year, some of which are sure to be unwarranted.  Ennis Britton attorneys can help school districts determine when it is appropriate to file counter-complaints to contest unwarranted decrease complaints to help maintain the tax valuation of the district.

1https://www.ahla.com/covid-19s-impact-hotel-industry

New Federal Guidance from OSEP: a COVID-19 Q&A

by | Oct 2, 2020 | COVID-19 (Coronavirus), General, Special Education

The U.S. Department of Education’s Office of Special Education Programs (OSEP) published a new COVID-19 Q&A on September 28, 2020 (OSEP QA 20-01). While OSEP explicitly cautions that the Q&A “is intended only to provide clarity to the public regarding existing requirements,” it nonetheless provides insights on how long-standing rules and laws will be applied to the novel COVID-19 virus.

In support of school districts that are guiding their decision-making based on the health and safety of students and staff, OSEP repeatedly describes health and safety as “most important” and “paramount.” If a hearing officer or court is making a decision based on the equities (i.e. fairness) the emphasis of OSEP on safety will weigh in favor of schools making reasonable adjustments to how IDEA is implemented. However, OSEP also repeatedly states that school districts “remain responsible for ensuring that a free appropriate public education (FAPE) is provided to all children with disabilities.” This requires an individualized response to COVID-19 that focuses on “each child’s unique needs” and ensures “challenging objectives.”

To strike the balance of protecting health and safety while also providing FAPE, OSEP points school districts to the normal IDEA processes. The Q&A notes that no changes to the law or regulations have been made at the federal level. Interestingly, when discussing the timeline for initial evaluations OSEP advises that states “have the flexibility to establish additional exceptions” to the 60 day initial evaluation timeline. As of this writing, the Ohio Department of Education has not taken actions to allow for COVID-19 specific exceptions from the timeline.

Otherwise, OSEP’s Q&A largely points to approaches that have been addressed in prior “Special Education Spotlight” articles, Ennis Britton blog posts, and in our Coffee Chat webinar series. These approaches include conducting records review evaluations when in-person evaluations are not possible, using virtual team meeting platforms, and delivering services flexibly (e.g. teletherapy, consultation with parents.). OSEP warns against conducting remote evaluations if doing so would violate the instructions of the test publishers.

The discussion of extended school year (ESY) services is perhaps the topic most likely to generate interest in the short-term. After clearly distinguishing ESY from compensatory education or recovery services, OSEP acknowledges the authority of the states to establish standards for ESY. Note that in Ohio the standard is based on excessive regression and recoupment. OSEP proceeds to observe that, understandably, ESY services may not have been provided over the past summer due to COVID-19 restrictions. In such cases, OSEP encourages school districts to “consider” providing ESY during times such as the regular school year or scheduled breaks (e.g. winter break).

The Ennis Britton Special Education Team will continue to monitor and share with clients the latest developments as we navigate this unusual school year. Please contact a member of our team with questions or concerns.