Am I Eligible to Request Regular Binding Arbitration?
Did you receive a Notice of Appraised Value from the Appraisal Review Board? Was the value way higher than you expected? If you are worried about paying a lot more in property taxes this year, don’t freak out yet. In Texas, property owners have the legal right to protest their property tax valuations.
While you can protest the appraisal in district court, you might decide to use binding arbitration instead. The result of binding arbitration is final and utterly binding on all parties.
However, there are circumstances in which you or your property might not qualify for binding arbitration. This post reveals when you may request binding arbitration and what you should do before filing a request.
What is Binding Arbitration?
Binding arbitration is a way to protest your property appraisal without going to district court. Within 60 days of receiving your ARB determination, you can file for arbitration with the county appraisal district.
The Comptroller’s office will appoint an arbitrator, which operates as a neutral third party, who will schedule a hearing where you and the ARB present evidence as to what your property value should be. After a time of deliberation, the arbitrator will make a decision that is binding for both parties.
Republic Property Tax offers representation for residential, commercial, and BPP tax protests. Learn more about out services here.
When to Request Binding Arbitration
You can request binding arbitration under the following qualifications:
- The property under dispute is real, not personal or mineral interests.
- The value set by the Appraisal Review Board (ARB) is $5 million or less if the property does not have a residential homestead exemption.
- You received the ARB written determination on the appraisal or market value of the property.
- You have paid the taxes on time.
- You have not filed a lawsuit concerning the same issue and property.
- It is less than 60 days since you received your determination.
If your property qualifies for a residential homestead exemption, it is eligible for binding arbitration regardless of value — there is no upper limit.
Include Comptroller Form AP-219, Request for Binding Arbitration, a copy of the ARB order under appeal, and a check or money order for the required deposit made payable to the Comptroller of Public Affairs in the bundle you send to the appraisal district.
Who Are the Appraisal Review Board Members?
The Appraisal Review Board should be an independent and neutral body of citizens responsible for evaluating property tax appeals. But that doesn’t mean that their appraisals are always right.
Sometimes, the ARB determines a value that’s way too high for the property. In these cases, the owner has to pay a lot more in property taxes. The good news is that you can appeal their decision.
In fact, you must appeal the decision before requesting binding arbitration. File for appeal and attend an Appraisal Review Board hearing. Once you receive the ARB’s determination, you may file for arbitration.
Understand that the appraisal district is only required to mail a notice of assessed value if the value stays the same by more than $1,000, so it’s up to you to monitor your property tax appraisals yearly. The district must send a notification if the value increases more than the limit.
In any case, file for an appeal by May 31 or before 30 days have elapsed since you received the notice. If you agree to the value presented by the ARB in the informal hearing, you don’t need to request binding arbitration to change it.
The key to your request for arbitration is your considered opinion of the property’s value. However, you must provide evidence to support that opinion (other than the fact that you don’t want to pay more in taxes).
Your first step is to determine comparables, which are properties similar to yours in type and situated in the same general area of the county. The numbers you find give you a foundation to determine the value of your own property and whether the ARB provided an unequal determination.
Add to your evidence the receipts or estimates for various repairs, like roof, tile, or window repair, pet or smoke odor elimination, wallpaper replacement or wall painting, replacing fixtures and doors, or replacing the heating and air conditioning units.
If you need clarification on the value to set, err on the high side of the range. You can reduce the value at the arbitration hearing if needed.
Before You Request Arbitration
Carefully read the rules for the arbitration process and clear up any questions, so you understand everything you need to do. You need to know the following:
- The time frame for producing evidence
- The time frame for producing rebutting evidence against the other side
- What happens if you fail to comply with the rules, especially concerning deadlines
- The time limit to present the evidence at the hearing
The rules also cover expressing courtesy to the other party and whether interruptions are allowed, among other practical issues.
If you fail to comply with the rules, your evidence cannot be admitted for consideration because it would be unfair to the other party to allow late presentation of information.
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How to Determine the Value of Your Property
Research and analyze the market for properties comparable to yours before or after you complete your request. Just be sure to file your request within 60 days of receiving your appraisal of value. You will also have 45 days after filing your request to gather more information.
You can include one opinion of value on the arbitration request form and a lower opinion of value at the hearing because you might receive better data after filing your request. Also, you had time to obtain bids for repair work like painting, roofing, tile repair, or odor elimination.
This is where property tax appeal representation can really help you. You can get assistance from professionals who have done this process many times and are familiar with ARB rules.
Withdrawals, Settlements, and Dismissals
Once you submit your arbitration request, you have 45 days before the Comptroller assigns an arbitrator. You and the appraisal district might settle your differences during this time, and the Comptroller can cancel the arbitration. Or you may choose to withdraw it for other reasons, although you should withdraw it before the 45 days are up; otherwise, you must pay arbitration fees regardless of not requiring a hearing.
Arbitrators can dismiss arbitration requests or cases if they find the legalities are lacking.
Do You Need Assistance?
Taxes are complicated, and the code becomes more convoluted every legislative session. If you’re feeling out of your depth, contact Republic Property Tax. We can provide expert assistance and representation for your arbitration hearing.