Clearview Realty Ventures, LLC v. City of Laconia: Can a Global Pandemic Justify a Prorated Tax Assessment?
In Clearview Realty Ventures, LLC v. City of Laconia, the New Hampshire Supreme Court addressed the question of whether a commercial property owner is entitled to a prorated tax assessment based on the COVID-19 pandemic and the associated closure of certain non-essential businesses. The Court ultimately ruled that purely economic loss cannot be read as property damage within the meaning of RSA 76:21, I (Supp. 2022), a statute that provides relief for unintentional fire or natural disasters.
The case involved a dispute between Clearview Realty Ventures, LLC (“Clearview”) and the City of Laconia (and similarly situated parties) over the tax assessments of certain commercial real estate properties. The property owned by Clearview suffered a decline in income due to the COVID-19 pandemic, which Clearview argued should result in a prorated tax assessment under RSA 76:21. The statute provides that when a taxable building is damaged due to unintended fire or natural disaster to the extent that the building is not able to be used for its intended use, the assessing officials shall prorate the building’s assessment for the current tax year.
However, the Court turned back Clearview’s argument, holding that the statute does not cover purely economic losses resulting from the pandemic. In its analysis, the Court noted that the plain language of the statute refers only to physical damage to a building, and that the term “natural disaster” is generally understood to mean an event like a hurricane or earthquake that causes physical damage. The Court also made reference to the rule of construction that statutes are to be interpreted according to their plain meaning, absent clear legislative intent to the contrary.
This decision is significant because it clarifies that RSA 76:21 does not provide tax relief to property owners for purely economic losses caused by the COVID-19 pandemic. While the pandemic has had a devastating impact on many businesses—including hotels—property owners cannot expect to receive a prorated tax assessment unless their building has suffered actual physical damage.
The Court’s reliance on the plain meaning rule is also noteworthy. This rule is a longstanding principle of statutory construction, directing a reviewing court to interpret a statute according to its ordinary meaning, absent clear legislative intent to the contrary. By emphasizing the importance of the plain meaning rule, the Court has reaffirmed the significance of closely reading a statute’s text to determine its meaning, rather than relying on extraneous factors such as legislative history or public policy considerations.
Of course, there are limits to the plain meaning rule. Courts may depart from the plain meaning of a statute in some circumstances, such as when a plain meaning result would be absurd or inconsistent with the overall purpose of the law. St. Onge v. Oberten, LLC, 174 N.H. 393, 395 (2021). In this case, though, the Court found no reason to depart from the plain meaning of RSA 76:21, as there was no indication the legislature intended the statute to cover purely economic losses.
In conclusion, the New Hampshire Supreme Court’s decision in Clearview Realty Ventures clarifies that property owners cannot expect to receive prorated tax assessments under RSA 76:21 for purely economic losses resulting from the COVID-19 pandemic. As such, property owners should not expect relief from property taxes unless the building in question has sustained actual physical damage.
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