The Role Of The Property Tax Consultant In Litigation

In the event that a valuation settlement cannot be reached during the administrative remedy, the property owner and/or manager often ask for recommendations regarding possible litigation from their property tax consultant. Since litigation support is a large practice area in the property tax consultant industry, consultants play various roles. These roles can range from passive to intricate participation during the litigation process. The absolute least agent participation level should include advising the client that an ARB order has been issued and the deadline for filing appeals.

In both scenarios, the consultant handles the property tax appeal through the administrative remedy, which includes protecting the taxpayer’s rights and providing remedies available in the Texas Property Tax Code. In a passive role, the consultant’s participation typically ends with issuance of the Appraisal Review Board’s (ARB) Notice Of Final Order. At this point the property owner assumes the responsibility of appealing a protest provided by Subchapter C of Chapter 41, Section 25.25 or Subchapter B, Chapter 24. The taxpayer will retain legal representation and expert witnesses necessary to proceed with their litigation.

In the latter case the owner will rely on the consultant to become part of the litigation team, typically made up of an expert witness, attorney and the consultant. Each team member has a fiduciary relationship with the property owner and this must be understood and kept in mind. The members of the litigation team bring different areas of expertise, which are needed in order to bring a successful conclusion to a property tax lawsuit. For example, a real estate appraiser might be designated as the expert witness. In addition to preparing a market value appraisal, fair and equitable study and giving testimony, the appraiser may be asked to provide additional services, including: [1]

1. Advising an attorney on matters of standards of practice, professional code of ethics, market data sources, and industry trends

2. Helping frame questions for appraisal experts on either side of the case at depositions and during trial testimony

3. Case management

Additionally, the appraiser can also be utilized to identify incorrect methodology, inaccurate data, and an inaccurate application used by appraisal districts.

The attorney is the captain of the litigation team and his fiduciary relationship with the property owner trumps all other activity involved in the litigation. The relationship with all other team members is secondary to that of the relationship between the attorney and the property owner. Further, other team members must be aware not to engage in any activity that constitutes the unauthorized practice of law. Once litigation has been filed, the property owner will become the Plaintiff and will be the direct client of the attorney. The agent is not the attorney’s client. Thus, communications between an attorney and the tax agent may or may not be confidential and may be discoverable. Privileged communications should most often be directly between the owner and attorney.

The attorney’s role includes counseling the property owner on the feasibility of litigation, defining and explaining the taxpayer’s rights, disputed facts, and remedies. Generally, the litigation process includes the filing of the petition, discovery of the facts (informal and formal interrogatories, requests for production, depositions, disclosure of experts, requests for admissions, etc.), motions to the court, pretrial proceedings such as case management conferences, settlement conferences, referral to mediation or arbitration, preliminary motions to allow or exclude evidence at trial, pretrial briefs, trial preparation, jury selection and instructions, trial by judge or jury, post-trial motions, and appeal of the judgment.

Consultants who participate in litigation support can be divided into two categories; involved and heavily involved. The consultant that falls in the first category will generally work as a conduit of information between the owner and the attorney. For example, the consultant would forward the attorney copies of evidence used during the administrative process, Notices of Final Order, and other general information.

[1] As defined in The Appraisal of Real Estate, Twelfth Edition