Just 10 Of Owners Give Miamidade County Property Appraiser Requested Data
Written by Yudislaidy Fernandez on May 20, 2010
By Yudislaidy Fernandez
About 10% of Miami-Dade commercial property owners have submitted financial data to the property appraiser to help his office calculate property values. The deadline is this week.
Property Appraiser Pedro J. Garcia says the second round of letters sent to property owners requesting the information generated a bigger response turnout.
"It’s been a surprise the reaction from people to the second letter," he said. "We increased the percentage of what we had gotten" and more owners were calling to learn more about the process, he said.
Mr. Garcia’s office has mailed about 20,000 written requests to owners of such commercial properties as office buildings, industrial sites and retail stores. In the letter, the office requests such documents as rent rolls, expense reports and a federal tax return copy, to be provided voluntarily and kept confidential.
As the economy slid last year, many commercial property owners complained that assessments were unreasonably high because they were based on boom-time property sale prices. At such artificially high levels, some said, their properties became guaranteed money-losers.
The appraiser’s office, in response, offered to set values based on how much a property could actually earn for its owners, hence the request for income data that might reduce evaluations — and tax liabilities.
But overall response has been small.
In late February, the appraiser’s office reported 2% of commercial property owners had opened their books, a figure that by April grew to 5% and has now reached about 10%.
Tax service professionals, who represent many commercial property owners, have cited reasons such as property owners’ fear of opening their books to the government and plain procrastination as reasons for the low return rate.
Mr. Garcia says he’s extending the deadline until this week to allow commercial property owners planning to send the data a few more days.
"We are still receiving some [responses]. I try to accommodate them [commercial property owners] because the more information we can get, the better is going to be for everybody," he explained.
The documents can be crucial in painting a more current picture of income-producing properties, since landlords have been cutting deals, including reducing rents and other concessions, to retain tenants.
From those submitting the financial details "we are getting the real information. We know exactly from them the vacancy, rent they are getting, the expenses they have for the property," Mr. Garcia explained. "That will give us a full view of what is the income and expenses in that particular building before we make the decision on value."
The appraiser’s office is comparing a commercial property’s income information with that of similar properties to help calculate values on which taxes are based that are more consistent with current market conditions.
Appraisers often use income valuation in commercial real estate appraisals, capitalizing an income stream into a value indication.
But in the past, the office used market values instead because transactions were abundant. Now, with fewer commercial sales to use as comparison, it’s hard to rely on the market value approach.
This month, Mr. Garcia also met with the county’s commercial growers and other agricultural producers to get from them lease information, including market and financial data, which the office needs to determine agricultural land rates for this year.
The appraiser’s office is now analyzing submitted financial data, along with reports it’s gathered from market sources, to determine and report all property values in the county.
By June 1, Mr. Garcia must submit projected values to the mayor and county commission so they can start working on the budget for the year starting Oct. 1.
Mr. Garcia estimates those value projections will be very close to the final numbers.
The office must file its tax roll with the Florida Department of Revenue by July 1.