Advocacy Update

Written by Forrest Wall, CAE, Staff Vice President and Industry Relations

Second Amicus To Be Filed By AAM

In last month’s column I wrote about AAM’s decision to file an amicus in the appeal of a decision by the Michigan Tax Tribunal which involved a special assessment levied upon an apartment community by a city for curb, gutter and storm sewer replacement along a road abutting the property. Another legal matter involving the Tax Tribunal has come before AAM.

On June 8, 2011 the Tax Tribunal issued an Opinion that destroys the statutory mandate that transferred properties be assessed “using the same valuation method used to value all other property of the same classification.” A taxpayer, whose 2007 building value increased over 160 percent, sought to have its 2007 true cash value be that which the assessor determined using the cost approach because the assessor used the cost approach to value 108 other parcels out of 110 parcels, and the other two parcels were valued based on Tax Tribunal settlements in prior tax years. The Tribunal rejected this relief because it found that one of these two other parcels was valued based on the income approach and the other was valued on the sales comparison approach. What happened in this case is exactly what the legislature intended to prevent: an extreme building value increase of over 160 percent because a transferred parcel was valued using a different valuation method than over 98 percent of the other parcels in the class. If transferred properties are allowed to be valued unfairly and excessively relative to other properties, it would decrease investment in Michigan and result in a further depression of real estate values.

For this reason, AAM will be joining three other business organizations – Building Owners & Managers Association, Michigan Chamber of Commerce and Michigan Retailers Association – in filing an amicus. AAM will keep you apprised of the status of this case as it progresses.

EPA Rejects Proposal For Enhanced Testing Under Lead RRP Rule

In a victory for the residential real estate industry, the Environmental Protection Agency recently rejected a proposal to add third-party clearance testing to the Lead: Renovation, Repair and Painting Rule (RRP). As you know from previous columns highlighting this rule, it applies to remodeling work disturbing more than six square feet of interior painted surface or more than twenty square feet of exterior painted surface in multifamily and single family structures built prior to 1978. It includes a tenant notification process, specific work practices to follow (where the testing comes into play), recordkeeping requirements, and certification for those performing the work. The proposal for clearance testing, if approved, would have required contractors or apartment owners performing their own work to hire EPA-accredited dust samplers to collect several samples after a renovation and send them to an EPA-accredited lab for lead testing, thus increasing the cost of this regulation dramatically. The current requirement of wiping down the project area after completion of the renovation work and matching the wipe to an EPA-approved card to determine if dust is still present is effective and cost efficient. Apartment owners are reminded that although this proposed addition to the rule was dropped, the other parts of the rule remain fully in effect and are being enforced by EPA.

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