Most real estate tax abatement cases heading to a final hearing require the testimony of an appraiser. Two, in fact: one for the taxpayer, and one for the taxing authority. Sometimes there is even a third appraiser, who gives his or her opinion as to the quality of one or the other reports prepared by the appraisers prior to the hearing.
People with specialized knowledge and skill in certain areas, such as the valuation of real estate, are permitted to testify at trials and hearings to assist the tribunal in rendering its decision. The person first needs to be certified as an expert, with that decision usually being made by the court or board hearing the case.
Experts have wider latitude to say things than other witnesses. For example, if the appraiser relied on a report issued by a private research company in concluding the vacancy rate for the market area was X%, that information is hearsay. The author of that report ordinarily would be required to testify to give the other party and the court/board an opportunity to ask questions and test the quality of the conclusion. An expert witness, however, may use such information.
But how far can an appraiser go? Can an appraiser include his or her opinion on the cost to place a utility pole into the ground? Possibly, if the appraiser is a civil engineer or otherwise has some suitable qualification. How about the additional cost if poles must be drilled into bedrock? Same answer. But how about an opinion as to the amount of bedrock a utility likely will encounter in replacing the poles in a particular town? This is where the use of “extraordinary assumptions” can come in handy.
If an appraiser represents that a particular material fact is true and accurate, then the appraiser must demonstrate not only how he or she came up with that fact, but also his or her qualifications to qualified to develop that fact. For example, if an appraisal report represents that 10% of replacement utility poles are likely to be placed in bedrock, and the appraiser is not qualified to make that statement, then that portion of the report is vulnerable to attack on that basis, and if that portion of the opinion is critical, then the entire report and testimony may be excluded from the hearing.
On the other hand, if the appraiser relies on some other report for that information, and discloses that reliance as an extraordinary assumption he or she assumed to be accurate, then the appraiser should be fine. The statement, however, still may be challenged, but the appraisal report itself should not be excluded based on the mere inclusion of the extraordinary assumption.
The upshot? How information is disclosed can be as important as the information itself.
(Based on the March 12, 2018 New Hampshire Merrimack County Superior Court decision case in New England Telephone Operations, LLC d/b/a Fairpoint Communications NE v. Town of Acworth (220-2012-CV-100).)
Paul J. Alfano