WEST MILFORD — Commercial property owners have received their mailing from the township which will allow them to disclose their rental income and expenses and possibly help if they decide to challenge their assessments for this current year.
Township Assessor Brian Townsend said the Chapter 91 Income and Expense requests, as they are known, were mailed on Sept. 28. Completed forms are due back to his office within 45 days, or by Nov. 12.
The Chapter 91 form is used by the township as a tool to help determine assessed value for commercial properties. In 2011, a full revaluation of the township was done. Commercial property owners and lakefront property owners were hit hardest by the revaluation. Close to 800 property owners in the township challenged their assessments this year. When the impact of the revaluation was apparent, many commercial property owners came to the township with their stories of tremendous increases, some whose property taxes would increase over 100 percent.
Townsend made a presentation to the council and the public showing that the revaluation was accurate, despite the increases. Lakefront homeowners, too, challenged his figures. But Townsend used sales data from the first part of the year to show that the revaluation numbers were close to 100 percent market value.
Many commercial property owners - more than 50 percent of the 316 in town - did not return their Chapter 91 forms last year. But if property owners want a chance to appeal their assessments, they must return the Chapter 91 form, Townsend said.
"If commercial property owners don't respond within 45 days, they may not be able to challenge the assessment," said Townsend.
Who fills it out?
All commercial property owners must fill out the Chapter 91 form, However, part of that form is only for owners who lease their property.
Townsend said there are three ways used to develop assessments: cost approach, comparable sales, and income approach. They use an income approach in assessing the commercial properties in West Milford.
"This is what's predominately used at state tax courts," he said.
Part of the form is a property description, asking basic information about the physical building and the business itself.
The Statement of Income section of the form relates to the total income from the rental of the property; it is not requesting income figures from the actual business that occupies the space. For example, if the property is owner/occupied, this section should be marked "not applicable; owner/occupied" said Townsend.
The same is true with the next section, the Statement if expenses. This section is used to list expense items that are necessary to maintain the real property and continue the production of income from the property.
And finally the Rental Information Sheet is a list of the tenants and information on the leases for a specific property. This is not to be completed by owner/occupied business owners. It is only for those who rent our their properties.
Why it's important
According to Townsend, this information will give a full picture of what commercial properties are worth in the township. It takes into account income from rentals, vacancy rates and expenses. It is not based upon sales.
"It is used to stabilize, generalize what income and expenses there will be," said Townsend.
Getting a good response is critical, he said. He compared a commercial property owner not filling out this form to a residential property owner not allowing the inspection during the revaluation. It causes them to estimate.
"In developing economic rent, the more responses we have just enables the revaluation firm, my office to have a better view of what's going on out there." Townsend said.
Anyone with questions on the form is encouraged to contact the assessor's office in town hall or call 973-728-