Protesting your unfair commercial property taxes often means weeks or months spent gathering data and preparing your argument. (Ideally, you will have hired a professional firm to handle the work for you.) What happens if, after a formal hearing, you still fail to come to an agreement with your county appraisal professionals? Commercial property owners have two additional tools they can turn to in the fight against unfair valuations: litigation and arbitration.

The final actions available to commercial property owners looking to right-size their excessive taxes, litigation and arbitration are both highly effective and highly specialized. Here, Lane’s property tax protest experts delve into the finer points of these next steps. Read on to learn more about how to determine which option is right for your commercial properties and the best way to approach the process. 

What is Property Tax Litigation? 

Typically reserved for properties that are assessed at more than $5 million and experience a value discrepancy of more than $200,000, property tax litigation is a formal appeal process with the potential to move on to court proceedings. Let’s take a look at property tax litigation’s finer points. 

• Texas law requires commercial property owners to file a litigation lawsuit within 60 days of receiving their final ARB order, and to pay owed taxes or process fees before moving forward with proceedings. 

• Litigation proceedings consist largely of court-ordered mediation sessions, settlement conferences and/or negotiated agreements. During these sessions, you or the firm representing you will meet to discuss the case’s details, present evidence and ideally come to an agreement regarding a valuation more befitting of your commercial property. 

• Although rare, it is possible for the judge overseeing a property tax litigation case to move the case to trial. Such decisions depend largely on the specifics surrounding the individual case, as well as the judge’s tendencies and preferences. 

• The formal nature of property tax litigation makes it the more expensive and time-consuming option. It’s not uncommon for litigation proceedings to take one to two years (or more) to reach completion. 

What is Binding Arbitration? 

A process reserved for properties valued at less than $5 million, binding arbitration is a more informal approach to lowering one’s commercial property valuations when formal and informal ARB hearings fail. Here, we’ll look into arbitration’s details. 

• In Texas, commercial property owners wishing to pursue arbitration must have no overdue taxes. They must file a request with the Texas Comptroller of Public Accounts within 60 days of receiving their ARB’s final value decision. 

• Arbitration fees are also required during that initial 60-day window. These fees range from $450 to $1,550, depending on your unique property type and value. 

• Upon completion of the initial paperwork and payments, the comptroller’s office will assign an arbitrator to your case and set up a meeting between you (or the team representing you), the arbitrator and your county appraisal district (CAD).   

• Meetings may take place in-person or via teleconference and involve both parties presenting evidence to an arbitrator who will have final say in the ruling. 

• After hearing your case, the arbitrator has 20 days to consider the evidence and make a final, binding decision regarding whether to lower your commercial property value. 

• Winning an arbitration case means the final determined value is closer to your opinion of value than the county appraisal district’s. If an arbitration case is “won,” all fees are refunded except for a $50 administration fee. You or your property tax protest team are responsible for paying the arbitration fee.

Why Trust a Professional Property Tax Protest Firm with Your Litigation and Arbitration? 

As the last steps in a commercial property owner’s fight against unfair valuations, litigation and arbitration proceedings are extremely important. We recommend trusting an experienced team such as Lane with the work in order to position your case in the strongest manner possible — and save yourself time, money and stress. Here are just a few ways a professional firm can help: 

• Extensive Firsthand Experience: A professional firm knows exactly how to handle the questions that come into play during litigation and arbitration proceedings, how best to position your property’s details and ways to avoid common pitfalls related to the protest process. Why? Because the team has seen and overcome it all before. At Lane, our team has more than 100 years of combined experience helping clients fight for what’s fair. 

• The Time to Approach Your Case the Right Way: It takes countless hours to gather details surrounding your unique properties, carry out market research and create a case capable of swaying taxing authorities’ opinions regarding your valuation. And extra time is something few commercial property owners have. By turning the work over to a professional firm such as Lane, you’re freeing your own schedule up so you can attend to everyday business while entrusting your firm to help you by doing what it does best. 
• Higher Likelihood of Success: A professional firm’s time investment, knowledge and experience come together in ways that improve the likelihood of successful litigation and arbitration proceedings. And a win on the arbitration or litigation front means added savings for you, the commercial property owner. 

Failure to come to agreeable terms with your CAD following formal and informal hearings can be frustrating, but rest assured you still have options available in the form of arbitration and litigation. If you have questions about any of the above, or if you’re interested in learning more about these final steps in the appeals process, please feel free to reach out to Lane at any time. Our commercial real estate pros take pride in fighting back on your behalf, and we’re ready to unburden your business.