The opinion of the court was delivered by: Kuskin
Plaintiff seeks to apply the Freeze Act, N.J.S.A. 54:51A-8, so as to reduce the aggregate of the 1995 regular assessment on plaintiff's property (imposed pursuant to N.J.S.A. 54:4-23) and a 1995 added assessment (imposed pursuant to N.J.S.A. 54:4-63.3) to the amount of the Judgment entered by the Tax Court reducing the 1993 regular assessment on the property. The factual background is as follows.
Plaintiff appealed the 1993 regular tax assessment on property designated as Block 11001, Lot 12 on the Tax Map of the Township of Rockaway, which was improved with a multi-story office building. The appeal was settled at a total assessment of $11,500,000, and a Tax Court Judgment in such amount was entered on December 3, 1993. At the time of the settlement, interior improvements for tenant occupancy had been installed in some, but not all, of the building. The transcript of the settlement proceedings dated April 27, 1993 reflects the parties' agreement that no added assessment would be imposed for work completed through May 1, 1993 and contains a statement by plaintiff's counsel that "The freeze act is not requested but not waived for 1994". There is no Discussion as to 1995.
For 1995, the subject property was assessed at $11,500,000 in accordance with the 1993 Judgment. Plaintiff's appeal of this assessment and the municipality's counterclaim have both been withdrawn. On October 1, 1995 an added assessment in the amount $3,961,700, based upon tenant improvement work performed in the building at various times during 1994, was imposed on the property pursuant to N.J.S.A. 54:4-63.3 for twelve months of 1995. The aggregate assessments for 1995, therefore, totalled $15,461,700. Plaintiff's appeal of the added assessment is currently pending in the Tax Court.
Plaintiff has filed a motion to apply the Freeze Act to reduce the 1995 aggregate assessments to $11,500,000 using the 1993 Tax Court Judgment as the base year judgment. For purposes of the motion, I have assumed, but not decided, that the 1995 added assessment was properly imposed. Issues raised by plaintiff in its motion papers as to the validity and amount of the added assessment need not be considered or resolved in order to rule on the motion.
The purpose of the Freeze Act has been reiterated by our courts on numerous occasions. In Union Minerals & Alloys Corp. v. Town of Kearny 13 N.J. Tax 114 (App. Div. 1992), the Appellate Division described such purpose as follows:
The design of the Freeze Act is to remedy "repeated yearly increases in the assessed value of property, not related to or justified by any changes increasing its market value, and resulting in harassment of the taxpayer, subjecting him to the trouble and expense of annual appeals to the county tax board".... To avoid the mandate of the Freeze Act, it must be established that the value of the property has changed after the assessment date. The burden of proof is on the taxing district.
[Id., at 117 (citations omitted).]
The Freeze Act is not applicable to years for which "a program for complete revaluation of all real property within the district has been put into effect." N.J.S.A. 54:51A-8, 54:3-26. Ennis v. Alexandria Tp., 13 N.J. Tax 423 (Tax 1993) holds that the term "revaluation" includes "reassessment". Id. at 429. Except in years for which a revaluation or reassessment is in effect, the application of the Freeze Act is "mandatory and self-executing". Clearview Gardens Assocs. v. Parsippany Troy-Hills Tp. 196 N.J. Super. 323, 328 (App. Div. 1984). If a final judgment is entered before the assessing date for the freeze year (October 1 preceding the freeze year), it is the responsibility of the assessor to reduce the assessment for the freeze year in accordance with the base year judgment, and, in order to avoid the application of the Freeze Act on the grounds of a change in the value of the property, the municipality must file an appeal with the county board of taxation or the Tax Court by April 1 of the freeze year. If the base year final judgment is entered after the assessing date for the freeze year, the taxpayer must apply for Freeze Act relief, and the municipality may resist such application on grounds of change in value. Id. at 329. See also Cumberland Arms Assocs. v. Burlington Tp., 10 N.J. Tax 255, 259 (Tax 1988) and Edgewater Borough v. United States Life Realty Corp., 2 N.J. Tax 421, 423-24 (Tax 1981), aff'd, 4 N.J. Tax 531 (App. Div. 1982).
The "mandatory and self-executing" application of the Freeze Act occurs without regard to whether the base year assessment or the freeze year assessment constitutes a "true valuation of the property" within the meaning of N.J.S.A. 54:4-23. The freeze attaches to the assessment contained in the base year judgment, and, unless the municipality asserts a change in value in accordance with the procedures described in the preceding paragraph, the application to the freeze years is a purely mechanical process divorced from considerations of value. Riverview Gardens, Section One, Inc. v. North Arlington Borough, 9 N.J. 167, 173 (1952). A change in value will render the Freeze Act inapplicable only if the change "is the result of either an internal or an external change occurring after the base-year assessing date which substantially and meaningfully increased the property's value". Cumberland Arms Assocs., 10 N.J. Tax at 272.
Under N.J.S.A. 54:4-23, the valuation date for regular assessments is October 1 preceding the tax year, and changes in value which occur after that date (subject to the limited exception contained in N.J.S.A. 54:4-35.1) have no effect on the assessment. October 1 preceding a freeze year (here October 1, 1994) is, therefore, the date for determining for Freeze Act purposes whether a change in value has occurred since the base year assessing date (here October 1, 1992), 2nd Roc-Jersey Assocs. v. Morristown, 11 N.J. Tax 45, 52 (Tax 1990), and a change in value which occurs after the October 1 preceding the freeze year (here October 1, 1994) cannot provide a basis for avoiding application of the Freeze Act to the freeze year (here 1995).
The purpose of the added assessment statutes is:
to permit the taxation of real property which becomes taxable during the year following the assessment date of October 1, in order to avoid having properties escape taxation until the next assessment date arrives.
[Snyder v. South Plainfield Borough, 1 N.J. Tax 3, 7 (Tax 1980)]
An added assessment may be imposed only when the "parcel of real property contains any building or other structure which has been erected, added to or improved after October 1...." and the value of the property as improved "exceeds the assessment made as of October 1 preceding...." N.J.S.A. 54:4-63.2 and 63.3. An added assessment, therefore, imposed for all or a portion of a freeze year must, by statutory definition, be based on a change in value occurring after October 1 preceding the freeze year. An increase in assessment based upon a change in value resulting from work completed prior to the October 1 preceding the freeze year may not be imposed by an added assessment and may be imposed only if the municipality follows the appropriate procedure ...