Timber Ridge condo owners take tax dispute to court
LYONS TOWNSHIP — In what’s being called an unusual legal move, 224 condominium owners have filed a lawsuit that contends the town’s appraisals of their vacation properties are nearly double the real worth.
Owners of Timber Ridge Lodge condos in Grand Geneva Resort and Golf Course are asking a Walworth County judge to rule that the town’s 2010 assessments for their properties were too high. The lawsuit does not involve the resort.
“The market for condos has gone through the floor,” said Madison attorney Don Millis, who represents the Timber Ridge condo owners. “The loss of value of units is the greatest I’ve ever seen.”
The condos referred to in the lawsuit are not year-around residences but are known as condotels. In this area, condotels usually are in buildings operated as luxury hotels for resorts.
Owners spend a few weeks a year in their units, and the resort rents them to vacationers or as hotel rooms for the remaining portions of the year. Revenue from rentals usually is divided between owners and the resort.
Owners claim the value of condotels has plummeted because of depressed real estate markets and bank policies that discourage lending to purchase the units, Millis said.
The town’s board of review in March denied owners’ claims of inflated assessments.
Dale Thorpe, a Delavan lawyer familiar with condo disputes and who represents homeowner associations throughout the state, said the lawsuit is unusual on two fronts.
“It’s surprising to get 224 people to agree on anything,” Thorpe said.
“It’s very unusual for this issue not to be resolved in an open book period or by a board of review.”
An open-book period is the time when property owners can appeal to municipal assessors the value placed on their properties. If agreements cannot be reached, the disputes then can be taken to boards of review for hearings.
The lawsuit contends the correct assessment total for the 224 condos should be about $25.6 million, instead of the $45.6 million set by the town assessor.
The owners’ figure is based on property valuations done by an assessor they hired, according to the lawsuit.
According to the lawsuit:
If the hired assessor’s figures were to be used, property taxes would decrease from a total of $690,422 collected in 2010 to $387,375.
Also based on the private assessments, condo values should shrink from the town’s range of $180,000 to $268,000 to lower values of between $94,000 and $170,000.
The suggested appraisals would reduce the tax range of $2,700 to $4,100 to between $1,400 and $2,600.
Town of Lyons attorney Dennis Lynch of Burlington said he could not comment on the lawsuit because he had not yet seen it.
The condo group is continuing to negotiate with the town of Lyons about the disputed assessments and its effect on 2011 property taxes, Millis said.
Millis expressed hope that the 2010 dispute can be resolved while examining the town’s 2011 tax structure.
BY THE NUMBERS
$45.6 million
What the town of Lyons contends is the value of 224 Timber Ridge condos in Grand Geneva Resort.
$25.6 million
What Timber Ridge condo owners say is the value of their properties.
Jun 6, 2011 at 11:23 p.m.
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"By banding together as a class they do get to take advantage of the legal system in ways that ordinary taxpayers usually do not." But the state certainly can afford all the lawyers they need now can't they? Must be nice to have the bottomless checkbook. And a checkbook they are looking to make a little deeper at these tax payers expense.
Jun 6, 2011 at 2:19 p.m.
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The point is that the owners believe they cannot sell their condos for more than $1.25M.
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This is the normal appeals process for assessments and has been available for many years. This case is unlikely, as far as I can tell, to set a major precedent. It's just another example of how this process is largely not available to the general public, but used by large commercial or institutional landowners to reduce their tax obligations.
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Here, a number of people who can afford these "condotels" (a nice tax shelter if you can get into one) are unhappy with their tax bills, but each individual would be unlikely to appeal due to the cost barrier. By banding together as a class they do get to take advantage of the legal system in ways that ordinary taxpayers usually do not.
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There was a 2008 law that allowed municipalities, in certain cases, to limit the type of appeal that could proceed, but that law was overturned this spring. I don't think it applied in this case.
Jun 6, 2011 at 12:50 p.m.
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So their condos are valued at 2x the value. Does that mean that if one is trying to sell his or her condo for $2.5 million that I can now come in and buy the condo for $1.25 million? I didn't think so.
Jun 6, 2011 at 7:11 a.m.
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The challenge in circuit court has been a law for MANY years! Often times groups like this try to do a combined appraisal for their valuation - which means what would they be worth if we sold them ALL together. Well, that's not going to happen. They need to each get individual appraisals. And remember, like in any business, there are extremely well qualified individuals doing appraisals and then some that are not. Research the appraiser (or company) before you hire.
Good comment doc0430 - that goes back to this is most likely a joint appraisal.
Jun 5, 2011 at 9:37 p.m.
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I believe a new law this past year allows us to challenge our assessments in circuit court if we are not happy with them. I urge everybody the go to city hall and get all the info on your home as well as neighbor's and other comparable properties in your area. The only way to ensure a fair assessment is to double and triple check their work and challenge them at every turn on everything. There is going to be more pressure now because it is likely the governor will severely restrict the amount a municipality can increase in levy. They are likely to move over to playing the assessment game as Janesville already has begun the public relations blitz on this deal using the "nothing to see here" game plan. They'll come out with all kinds of fancy charts and graphs in an attempt to glaze you over to accept their position that your assessment is going up but the housing market is in the tank. In the end they just want more of your money. Instead of using a gun to your back they use a pencil and clipboard.
Jun 5, 2011 at 5:21 p.m.
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A guess a few questions here would of course be, Would the condo owners take $2.56 million for their condos?, and if the owners do win this suit, would this open up suits through out the state with owners having their property taxes being assessed well over market value, say like what we could all be looking at here in Janesville as announced earlier this week? This will be very interesting to see how this all plays out. I only hope that the Gazette follows this story as in evolves.
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