‘Double-Taxed’ Condo Owners Must Pay Maplewood, South Orange

ESSEX COUNTY, NJ — The owners of a New Jersey condominium may find themselves paying taxes to two towns at the same time under a recently issued court decision.

A New Jersey appellate court affirmed a trial court’s decision on Friday, ruling that owners of The Top Condominium at 616 West South Orange Avenue will have to pay property taxes to both Maplewood and South Orange.

According to court records, the unusual taxing scheme is due to the fact that although all of the 10-story condo’s 93 units, parking and amenities are located in Maplewood, it also has access via a “largely vacant parcel of 1.46 acres” in South Orange.

Court records state that the dispute began when Maplewood imposed real property taxes on the individual unit owners. Soon afterward, South Orange assessed the property and forwarded its tax bills to the owners’ condominium association for payment. And that’s where the condo owners drew the line, arguing that the property was already taxed and was therefore exempt from South Orange taxes.

The association disputed South Orange’s assessed value of the property in 2011: $318,000. When the Essex County Board of Taxation confirmed the assessment, the condo owners then filed a complaint in the tax court, alleging that the property should qualify for a local exemption because it wasn’t separately assessable and the total amount was “excessive.”

When the tax board denied the association’s request for summary judgement, the condo owners repeated the process for 2012 and 2013, disputing South Orange’s assessments of $239,700, and again taking their challenge into tax court when the board upheld the assessments.

In February of 2014, the association moved for summary judgment of their 2012 and 2013 challenges, this time including the testimony of a local real estate expert who asserted that condo owners were being subjected to “double taxation” because Maplewood's assessments composed 100% of the property’s market value.

Tax Court Judge Kathi Fiamingo refuted the expert’s opinion, but said that because neither South Orange or Maplewood had passed a resolution saying otherwise, each part of the property should be assessed in the taxing district where located as per state law.

Fiamingo then entered the order under review, voiding the assessments on the subject property for tax years 2011 through 2013 inclusive.

South Orange town officials filed an appeal, which remained in the courts until Friday, when a panel of appellate court judges decided to uphold the trial court’s ruling.

“South Orange has the constitutional and statutory right to impose ad valorem real estate taxes on property within its borders,” the appellate court wrote in its decision.

However, the judges also had some criticisms for South Orange officials as well.

“We reject South Orange's argument that individual unit owners will receive a windfall by avoiding a portion of their real estate taxes for three years. That argument requires resolution of plaintiff's claim that Maplewood assessed all common elements, including the subject property; as noted, the judge never decided that issue. We also think it is inappropriate to address the issue for the first time on appeal, and particularly so because neither party ever sought to bring Maplewood into the litigation.”

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