On appeal from Tax Court of New Jersey, 6336- 98 in A-5169-99T5 and 993689-99 in A-5163- 99T5.
Before Judges Petrella, Kestin and Alley.
The opinion of the court was delivered by: Petrella, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
OPINION CORRECTED 04/16/02
These consolidated appeals implicate the applicability and scope of the Supreme Court's decision in West Milford v. Van Decker, 120 N.J. 354 (1990). The homeowner, Marianne Centorino, challenged her 1998 and 1999 assessment increases on the grounds that they were based on her recent purchase of the property and therefore were unconstitutional spot assessments under the "welcome stranger" practice. Centorino was unsuccessful before the Hunterdon County Board of Taxation (County Tax Board) as to her 1998 assessment on procedural grounds, but prevailed on her 1999 appeal which the County Tax Board found was based solely on its sale price. Centorino sought separate relief in the Tax Court on the merits of the 1998 assessment, but that assessment was sustained. Tewksbury Township appealed the County Tax Board's rejection of the 1999 increased assessment and reinstatement of the pre-1998 assessment. The Tax Court reversed the County Tax Board and reinstated the 1999 increased assessment. Centorino then appealed the two separate adverse determinations, and those appeals are now consolidated. For the reasons hereafter stated we reverse in both appeals.
Centorino owns property at 102 Old Driftway Lane, Tewksbury Township, Hunterdon County, which she purchased on September 26, 1997. At that time, the assessed value of the property for property tax purposes was $492,100.
In late September or early October 1997, Tewksbury's tax assessor received a copy of the deed abstract informing him of the sale and the sale price of the property. The computer program he used indicated that the assessment to sales ratio fell under 85% *fn1 because it had been assessed at $492,100 and was sold for $730,000, yielding a ratio of 67.41%. The assessor considered this unusual because most other sales in the township fell within an 85% to 100% ratio. The assessor claimed that the larger discrepancy must have been due to an error in the then current property valuation.
The assessor reviewed the property's prior assessment, consulted the selling brokers, and viewed the exterior of the property while driving past it. The assessor said that he also relied on sales of comparable properties. He testified that he consulted the MLS listing, as well as the property record card for Centorino's property. Interestingly, however, the assessor said that the original property record card was lost so it is not at all clear when or how he reviewed that property record card before this revaluation. In any event, it is undisputed that he prepared a new property record card before the Tax Court trial. That card noted that the property was "typical" of other
properties in the neighborhood. Through his investigation, the assessor concluded that the property had been undervalued and testified that the underevaluation resulted from the fact that somehow the property was wrongfully listed as a "class 18 residence" rather than a "class 20 residence." *fn2 At trial, he testified that a class 18 residence was a lower class of property that lacked many of the amenities that this house possessed. He noted a three car garage, a security system, central vacuuming, an intercom system, a Jacuzzi, three and a half bathrooms, an outdoor deck and a fireplace. There was no indication of how common such items were in the taxing district.
The assessor set the assessment at $601,900 for the 1998 tax year.*fn3 Centorino filed an appeal of her 1998 tax assessment to the County Tax Board. The petition was dismissed by the County Tax Board as out of time, but that decision was reversed by the Tax Court in Centorino v. Tewksbury Tp., 18 N.J. Tax 303 (Tax Ct. 1999), which held that she was not out of time because the mandatory notice of assessment was wrongfully addressed to her predecessor in title. There was no appeal of that decision. In the meantime, Centorino filed a separate complaint in the Tax Court challenging the 1998 assessment. That case was eventually tried in the Tax Court along with the challenge to the 1999 assessment.
While that matter was pending in the Tax Court, Centorino filed an appeal with the County Tax Board challenging the 1999 assessment, which was also $601,900. The County Tax Board ruled
that the increased 1999 assessment was improperly predicated upon the property's sale price, and reduced the assessment to $492,100, what it had been at the time of the purchase. The township appealed the County Tax Board's judgment on the 1999 assessment reduction to the Tax Court. The appeal of Centorino filed in the Tax Court with respect to the 1998 assessment and Tewksbury's appeal of the 1999 reduction of the assessment by the County Tax Board were consolidated.
Two weeks before the trial in the Tax Court beginning on April 14, 2000, the assessor amended his 1999 appraisal after inspecting the inside of the subject property for the first time. The appraiser then asserted that the property should have been assessed at $668,000. However, Tewksbury conceded at trial that the original ...