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Recently the Assessment Review Board (ARB) reduced a
contaminated property's value for taxation to zero. The ARB is
the tribunal that determines disputes on the assessed value of
property. Municipal taxes are based on a property's assessed
value.
The property in question, a residential house, was built on a
source of methane gas. The issue was whether the property had any
value because of the methane on the property. The property owners
gave evidence of very high levels of methane on the property.
A methane gas alarm inside the house was frequently going off,
and the fire department had been called several times because of
the alarms.
Consulting engineers found that the methane control system
installed at the time the house was built was not up to current
standards and testified that the source of methane needed to be
removed. They estimated that the cost of repairs would exceed the
value of the house.
An insurance broker the property owner consulted could not
obtain insurance on the house and property because of the methane.
Unable to bear the costs of bringing the methane control system up
to standard, the owners consulted a broker about selling the
property, only to find that their real estate broker would not list
the house for sale. In refusing the listing, the broker said that
no one would be interested in buying the property because they
would not be able to either insure or mortgage it because of the
methane levels.
The ARB found this to be an exceptional case. The methane
problem, it ruled, is more than a mere nuisance, posing a real
hazard. Such hazard had a devastating effect on the current value
of the house making it unsellable. Considering how the cost of
repairs exceeded the value of the property, the current value for
taxation purposes was set to zero. This case shows how seriously
environmental contamination can affect the value of a property. In
similar situations, contaminated property owners should consider
seeking reductions in taxation assessments for those
properties.
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