Options for continuing appeal of your Harris County Appraisal District assessed value - By: Patrick OConnor

Harris County Appraisal District assessed values can be appealed after the ARB hearing. For properties with an assessed value of $1,000,000 or less after the ARB hearing, you can choose binding arbitration to appeal market value or a judicial appeal (lawsuit in district court). For properties with a Harris County Appraisal District value in excess of $1,000,000, you can file a judicial appeal.

Binding arbitration and judicial appeals share several characteristics:

You must timely file a property tax protest regarding the Harris County Appraisal District value
You cannot agree to a value at the informal hearing
You must attend the appraisal review board hearing in person or by affidavit
You must act by requesting binding arbitration or filing a lawsuit within 45 days of the date of you receive the formal notice of the ARB hearing results.

Steps 1 through 3 are often referred to as "exhausting your administrative remedies." Multiple court decisions affirm you must file a property tax protest and attend the ARB hearing to be entitled to file a judicial appeal.

Advantages of using binding arbitration to appeal your Harris County Appraisal District value after the ARB hearing include lower cost, speedier decisions, an independent arbitrator who understands valuation and the opportunity to directly address the valuation problem outside of Harris County Appraisal District offices. Costs are lower because you do not need an attorney or an expert witness (likely to be necessary to seriously pursue a judicial appeal against Harris County Appraisal District). Costs of engaging an attorney and expert witness can be substantial, perhaps $3,500 to $20,000 for many real estate cases. For cases involving smaller properties, consider engaging a firm on a contingency fee basis. The Texas Comptroller expects binding arbitration cases to be resolved in 6 months while judicial appeals usually take 8 to 18 months. The arbitrator will be licensed appraisers or real estate agents/brokers and should understand real estate valuation. Even though the arbitrator is a real estate agent or appraiser, they may not be familiar with some types of commercial properties. Attempt to confirm your arbitrator is competent for the subject property.

Disadvantages of binding arbitration include

It currently (September 2006) only applies to market value for real estate. (i.e. you can't appeal for unequal appraisal for real estate).
There is a $500 deposit required when you request binding arbitration, although $450 is returned if the property owner prevails. In this case, Harris County Appraisal District would pay the $450 arbitration fee. When setting the requested value on the arbitration form, consider not putting the lowest possible value you can request. Include a value for which you can provide impressive documentation.
Binding arbitration can't be used for real estate with a Harris County Appraisal District value over $1,000,000 for unequal appraisal, business personal property and mineral interests.

Judicial appeals against Harris County Appraisal District are more expensive but offer more options. You can appeal market value and unequal appraisal for property with any value. Judicial appeals can be used for real estate, mineral interests and business personal property. They can also be used to appeal Harris County Appraisal District when "a property owner has been denied a hearing to which the property owner is entitled." While judicial appeals are more expensive, they offer more options and flexibility.

Property owners should seriously consider appealing the Harris County Appraisal District assessed value after the ARB hearing. Most judicial appeals are successful.

About the Author

O'Connor & Associates is the leading provider of commercial property tax services in Texas and national real estate consulting services including financial modeling, tax reduction, property appraisal, & lease audits.

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