Nouvelle & Aperçus

Colorado Court Affirms Leasehold Interest Does Not Provide Standing to Appeal Property Tax Assessments

Nouvelles fiscales févr. 15, 2017

Colorado Court of Appeals Affirms Leasehold Interest Does Not Provide Standing to Appeal Property Tax Assessments

On February 9, 2017, the Colorado Court of Appeals ruled that the lessee of a property did not have standing to appeal the actual value and assessment of its leasehold interest in a property (Traer Creek-EXWMT  LLC v. Eagle County, CO Board of Equalization, Court of Appeals No. 16CA0723). The Colorado Court of Appeals affirmed the District Court’s ruling, which determined that a leasehold interest does not provide statutory or common law standing to appeal a property tax assessment.

The District Court walked through the statutory requirements of filing an appeal and determined that the “fee interest owner” is the only party that is required to be sent a notice of value on assessment and thus is the only party that has the right to appeal that proposed assessment. The second argument made regarding common law standing was also disregarded, as the Court ruled that it may not disregard the statutory limitations by looking at common law standing. Note that this case does not address whether the lessor’s appeal rights may be transferred to the lessee via the lease instrument. As a result of this decision, commercial tenants may be required to appeal property taxes that they are responsible for under their lease only as an authorized “agent” of the property owner. Having that right expressly granted to them in the lease might be a best practice for tenants in Colorado commercial properties going forward, particularly if they lease the entire premises and have all of the resulting taxes passed on to them.