[SonnyJF]

We recently had a reassessment and the tax assessor added extra amenities - garage parking spaces and hallway storage rooms to the total assessed value. These amenities are defined as Limited Common Elements in the Master Deed.

A resident who has an amenity over and above the minimum required, such as an extra parking space in the ground level garage, can sell it to another resident within the same building. The Master Deed amendment allowing this clearly states that the Owner of the Unit shall have the right to assign and transfer its exclusive right to use the designated additional parking space or storage room to the Owner of another Unit within the same Building.

Is the town assessor correct in adding these to the Unit owners tax liability?

[LisaB4657]

This is a sticky situation. Yes, the tax assessor can add the extra amenities to the unit owner's tax assessment. However if the unit owner transfers the amenity to another unit owner there has to be some mechanism for memorializing that transfer, and then it has to be communicated to the tax assessor's office.

Right now the tax assessor is basing the assessment on the limited common elements as set forth in the Master Deed. So the Master Deed would have to be amended in some way, or the transfer of the amenity would have to be recorded in the county clerk's office, for the tax assessor to receive the proper notice for changing the assessment. The tax assessor isn't required (and probably cannot) rely on just some document between the unit owners if that document wasn't recorded in the county clerk's office.

Does the Master Deed detail some kind of procedure when the unit owners transfer amenities to other unit owners? If so, does that procedure require the recording of some type of transfer document?

[SonnyJF]

Thank you for your quick response. Yes, the Master Deed requires that the transfer be recorded with the county.

[LisaB4657]

If the transfer gets recorded then the information gets sent (or should be sent) by the county to the tax assessor and then the tax assessor can reassess that unit owner to add the new amenity.

[SonnyJF]

I'm trying to understand the logic of being assessed for my rights to a limited common area. New Jersey Statute 46:8B-1 states:

46:8B-19. Taxes, assessments and charges; valuation of units; exemptions or deductions

All property taxes, special assessments and other charges imposed by any taxing authority shall be separately assessed against and collected on each unit as a single parcel, and not on the condominium property as a whole. Such taxes, assessments and charges shall constitute a lien only upon the unit and upon no other portion of the condominium property.

Since the parking space is not within the definition of a Unit in the Master Deed, it is owned by the Association.

[LisaB4657]

The parking space has been defined in the Master Deed as a Limited Common Element, right? I would have to see the specific language in the Master Deed to explain exactly why the tax assessor is entitled to tax you individually for that parking space rather than assessing the association, but I've written enough Master Deeds to have a general idea of what it will say. It's because only that unit owner may use that space, and because the exclusive right to use of that space gets transferred along with the ownership of that unit.

To look at it from another point of view, let's say that because these amenities are not wholly contained within the individual unit they should not be assessed to that unit owner. That would mean that they would have to be assessed to the condominium association instead. If they are assessed to the condominium association then ALL unit owners will end up paying the tax on it. Why should a unit owner have to pay tax on an amenity he or she is not permitted to use?

[SonnyJF]

Thank you for the clarification. I understand better now.