Enhancing Your Texas Property Tax Services Through Appeals Litigation

A Guide for Property Tax Consultants and Agents

 

As property tax protest season approaches, consultants across Texas face increasingly complex challenges in securing fair valuations for their clients. With commercial property values continuing to surge throughout the state, understanding the full spectrum of available remedies - including appeals litigation - has become essential for providing comprehensive service to your clients.

The Evolving Texas Market

 

The numbers tell a compelling story: commercial property valuations in major Texas markets have experienced unprecedented growth. The metro areas have seen commercial property values increase significantly since the pandemic, with some areas experiencing staggering 100 percent increases over just three years. Yet these dramatic value increases rarely come with proportionate reductions in tax rates, creating an increasingly challenging environment for property owners.

Beyond the ARB: The Appeals Advantage

 

While the protest process through the Appraisal Review Board remains the first line of defense, the appeal of an ARB value determination offers additional strategic opportunities that many consultants may not fully utilize. Understanding these options can significantly enhance the value you provide to your clients.

Key Benefits of the Appeals Process

 

Fresh Start with New Evidence
Appeals provide a "de novo" review, meaning you're not limited to evidence presented during the initial protest. This creates the opportunity to present new supporting documentation, additional market analysis, or expert testimony that can strengthen your client's position.

 

Leveling the Information Playing Field
Unlike residential real estate where appraisal districts have access to comprehensive sales data, commercial property information is often limited and may be skewed in favor of the district. The appeals process provides a forum to present more complete and accurate market data that better reflects true property values.

 

Professional Legal Representation
Appeals require formal legal proceedings, bringing a level of sophistication and advocacy that can be particularly effective in complex commercial property cases.

Strategic Considerations for Consultants

 

As a tax consultant, incorporating appeals litigation into your service offering provides several strategic advantages:

Enhanced Client Value

Offering a complete solution from initial protest through appeals litigation positions you as a comprehensive resource for your clients' property tax needs. This full-service approach can differentiate your practice and strengthen client relationships.

Improved Success Rates

Some cases that reach an impasse during the protest process may find resolution through appeals litigation. Having this option available means you can pursue every available avenue for your clients.

Partnership Opportunities

Working with experienced appeals litigation attorneys allows you to maintain your client relationships while accessing specialized legal expertise. This collaborative approach can enhance outcomes while allowing you to focus on your core competencies.

The Economics of Appeals

 

The financial impact of successful appeals can be substantial. Reducing a property's assessed value by $1 million typically saves approximately $30,000 annually in property taxes. For clients with significant commercial portfolios, these savings can represent meaningful improvements to net operating income.

When evaluated against the cost of appeals litigation - which can often be structured on a contingency or fixed-fee basis - the return on investment potential becomes compelling for many properties.

Market Dynamics Favoring Appeals

Several factors in the current Texas market environment make appeals litigation particularly relevant:

 

Limited Sales Data: Commercial property sales information remains incomplete, giving property owners and their consultants opportunities to present market data that may contradict district assessments.

 

Rapid Value Increases: The speed of recent valuation increases may not always reflect underlying market fundamentals, creating opportunities for challenge.

 

Revenue Pressures: Counties' reliance on property taxes as a primary revenue source can create institutional bias toward higher valuations, making independent judicial review valuable.

Working with Appeals Litigation Counsel

 

Successful appeals require specialized expertise in both property valuation and legal procedure. When considering appeals litigation for your clients, look for attorneys who offer:

• Collaborative Approach: The ability to work alongside your existing client relationships rather than replacing them
• Flexible Fee Structures: Options for contingency or fixed-fee arrangements that align with client needs
• Statewide Capability: Experience handling appeals across Texas counties with varying procedures and practices
• Commercial Focus: Specific expertise in commercial property valuation and Texas Property Tax Code

Best Practices for Incorporating Appeals

 

To effectively integrate appeals litigation into your service offering:

1. Educate Clients Early: Discuss the full range of available remedies during initial consultations, so clients understand their options if protests don't achieve desired results.

2. Document Everything: Maintain comprehensive records during the protest process, as this information will be valuable if appeals become necessary.

3. Identify Strong Candidates: Properties with significant value disputes, unique characteristics, or substantial financial impact are often good candidates for appeals.

4. Build Professional Relationships: Establish working relationships with qualified appeals litigation attorneys before you need them.

The Timing Factor

 

Appeals must be filed within 60 days of the ARB order, making advance planning crucial. Clients who understand their options early in the process can make informed decisions about whether to pursue appeals if their protests don't achieve satisfactory results.

Looking Ahead

 

As the Texas commercial real estate market continues to evolve, property tax consultants who understand and can effectively utilize the full range of available remedies will be better positioned to serve their clients. Appeals litigation represents an important tool in this comprehensive approach, providing opportunities to secure fair valuations when traditional protest methods fall short.

 

The combination of rising property values, limited commercial sales data, and the substantial financial impact of property taxes creates an environment where appeals litigation can provide significant value for many clients. Consultants who embrace this comprehensive approach will be well-positioned to meet the challenges of an increasingly complex property tax landscape.

Moving Forward

 

Understanding appeals litigation doesn't require becoming a legal expert - it simply means recognizing when this tool can benefit your clients and knowing how to access the specialized expertise needed to pursue it effectively. By incorporating this option into your service offering, you enhance your ability to deliver results for your clients while strengthening your position as a comprehensive property tax resource.