CWAH partner, Michael J. Ash, represents SFIII Kinderkamack in this pending appeal. As part of a recently published opinion in SF III Kinderkamack, LLC v. Borough of Oradell, the Tax Court of New Jersey clarified its earlier decision in Mobil Administrative Services Co. v. Mansfield Twp. to hold that a recent purchaser of property may intervene in a pending tax appeal provided that: (1) the purchase agreement for the property was entered into before May 1 of the year under appeal, (2) the closing occurred after a real estate tax appeal was filed for that tax year, (3) the purchaser is responsible for paying real estate taxes on the property for the year under appeal, and (4) the purchaser seeking to intervene is not attempting to add new claims.
SF III Kinderkamack involved a motion filed by tenants-in-common to intervene in a tax appeal filed for their property on March 25, 2021. The tenants-in-common were successors in interest to a contract of sale for the property which was entered into on April 7, 2021, with closing having occurred on May 10, 2021. Thereafter, the new tenants-in-common filed a request to be joined in a pending tax appeal filed by the former owner. Objecting to this request, the Borough of Oradell claimed that the tenants-in-common lacked standing to join in the pending tax appeal, that the motion to intervene was filed after the May 1, 2021 deadline to bring new appeals, and that the tenants-in-common failed to meet the standards previously set out in Mobil.
In rejecting these contentions, the Tax Court recognized that R. 4:34-3 permits a court to grant leave for a party that acquired an interest in the property after the matter had already commenced to join in the pending action. Although the Tax Court had previously found in Mobil that the purchaser lacked standing to intervene in an already-pending tax appeal, this decision was clarified in SF III Kinderkamack. Instead, a party that acquires property after the May 1 deadline is said to have standing to intervene in a pending real estate tax appeal if it is in any way responsible for the real estate tax payments in the year under appeal. The Court further held that a request to join a pending tax appeal made after the May 1 deadline was not outside the statute of limitations provided that the intervenor was seeking to be joined to provide additional support to existing claims.
The key takeaway from the Court’s decision in SF III Kinderkamack is that purchasers of real property should consider whether they can and should intervene in any real estate tax appeals pending for the property. A former owner that is maintaining a pending tax appeal, particularly where appeals for prior tax years are still pending, may be incentivized to settle the prior appeals at the expense of the current one in order to maximize its gain. A purchaser should, therefore, intervene to ensure that its interests are protected.