Disclosures & Taxes – The Nitty Gritty

​Assessment Appeals Deadline is Looming

The market upswing has resolved many owners’ concerns about real property taxes.  For owners that believe their assessment is still above market value, the deadline to appeal the San Francisco Assessor’s valuation for tax year 2013-2014 is September 16, 2013.  This deadline cannot be waived, so appeals should be filed as early as possible.  (For other counties check the Assessor’s website.)

Many appeals are still pending for the last few years.  According to the Assessment Appeals Board, appeals from 2010-2011 are still being heard, leaving two tax years to resolve.  Due to the high caseload, for the most part, the Assessor’s office has been unable to focus on resolving appeals before they are heard by the Assessment Appeals Board.  

With all of the sales activity buyers should be aware that if they disagree with the new property value assessed due to the sale, the deadline to file an appeal is 60 days after receipt of the notice or the new tax bill.  Owners should confirm that the Assessor/Tax Collector has their current contact information for notices.  It could take 2-3 years for a new tax bill to be issued, so owners should reserve funds to pay taxes and follow up with the Assessor’s office regularly.  Failure to receive a tax bill does not excuse the payment obligations.

Reassessment Exclusions are Available for Certain Projects

For developers building a new project or renovating existing property, there are a number of real estate tax exemptions available for issues like seismic upgrades and ADA renovations (to existing buildings), low income housing, and immediate sale after construction (most applicable to condominiums).  There are strict filing requirements and deadlines for these exemptions, so check with the Assessor or legal counsel to be sure that you do not lose the potential benefits.

New Disclosure Laws are in Effect

    Commercial Energy Disclosures.  

In a previous update we mentioned that the long-postponed commercial energy disclosure requirements were supposed to kick in as of July 1, 2013.  These disclosures would initially apply only to the sale of commercial property with over 50,000 square feet.  However, because the website established by the California Energy Commission is unavailable for utility companies’ uploading of energy data, the enforcement of the regulations have been suspended until September 1, 2013.  The California Energy Commission recommends that the disclosures be made “to the extent feasible.” More information about these disclosure requirements may be found at www.energy.ca.gov/ab1103/index.html.  

    Accessibility – Lease Disclosures.  

New disability access disclosure requirements took effect as of July 1, 2013.  Despite the additional administrative burden, the stated goal of reducing lawsuits is beneficial to owners.  California Civil Code Section 1938 requires landlords to disclose whether the premises has undergone inspection by a “Certified Access Specialist”.  Performing an inspection would give some legal defenses to landlords.  (See our March 22, 2013 update for more information.)  Even without an inspection, the disclosures help focus attention on any issues.

The City and County of San Francisco added additional and more detailed disclosure requirements at the local level.  Effective as of July 1, 2013, the City requires that a specific notice be provided to all commercial tenants occupying less than 7,500 square feet of space, which must include a copy of the Small Business Commission Access Information Notice under Section 38.6 of the Administrative Code in the tenant’s requested language.  The notice informs the tenant that the lease must specify who is responsible for disability access upgrades that are required by law, and that the tenant should investigate these issues before signing the lease.  While there are no specific penalties for ignoring the disclosure requirements, landlords should comply in order to avoid any failure to disclose or negligence claims, and to be sure the lease properly allocates responsibility for delivery access.

Other local jurisdictions may have specific requirements, and these should be confirmed before finalizing a lease.

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben, Junius & Rose, LLP is a full service real estate law firm.  We specialize in land use, development and entitlement law.  We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.