Entitled lawyer didn't do due diligence on home purchase

Discussion in 'Philadelphia Real Estate' started by billy ross, Jun 3, 2016.

  1. billy ross

    billy ross Well-Known Member

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    Any fool could have seen that the land assessment of $7,500 on the open market was ludicrous. And private streets aren't entitled to free water main maintenance. Rather than trumpet my cluenessness and petulance, when I make mistakes like this I learn from them and resolve to be more wary next time. And at least I have the excuse of never having attended law school!

    Byko: Young couple slammed by 1,245 percent city tax hike

    I've got a lesson for Mr. Silver. Private means privately owned. Which means not publicly owned. Which means not entitled to public maintenance. You should be grateful the water department fixed it for you rather than turning off the water and telling you to call a plumber.
     
    #1 billy ross, Jun 3, 2016
    Last edited: Jun 3, 2016
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  2. ODragon

    ODragon Well-Known Member

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    I don't blame them for the odd private street ruling. I had no idea there are private streets in Philadelphia.
     
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  3. Jayfar

    Jayfar I'm very old®

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  4. Hospitalitygirl

    Hospitalitygirl Resident Ornery Bitch

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    Oh come on Ross, this is utter bullshit. It's just the city's way of squeezing more money from the people that actually pay. This is ludicrous that his land valuation should go up by that much. It's also a great way to keep productive citizens from staying in the city and keeping the leech population overly large--larger than the rest of us can absorb.
     
  5. Cro Burnham

    Cro Burnham Well-Known Member

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    For a guy who purports to be an expert practitioner of real estate finance and valuation, Billy Ross displays remarkable (feigned) naivete about the wealth-swipe this City action is.

    The honest way for the City to deal with this with abatement recipients - I know, I know, that sounds ridiculous - is either a) the easy way: delay the increased land assessment on a given abated property until its abatement expires; or b) the hard way: reimburse abatement recipients in cash equal to the present value of the new abatement reductions, this based on the reality that the recipient already paid the seller of the property a premium equal to the full abatement value that the City has now, unilaterally, decided to take a chunk of.

    Of course we know the City will do neither.

    OPA bureaucrats, council hacks, brilliant Jim Kenney, and of course Billy Ross need to watch The South Park "Annnnd . . . . it's gone" episode to take to heart the ridiculous irony of the situation.



    Meanwhile, empty lot and derelict property owners have received no increase in land assessment.

    "Oh, sure, that'll happen next year", says the City. ;)
     
    #5 Cro Burnham, Jun 3, 2016
    Last edited: Jun 3, 2016
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  6. billy ross

    billy ross Well-Known Member

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    Technically private streets in Philly should have the colors reversed on street signs, to make them more obvious, but we all know that the city is sometimes organized and sometimes not organized. There are plenty of private streets in Philly - East Falls alone has quite a few. If you've ever wondered as you go up School House Lane, now you know. Gypsy Lane condos, Apologen Road, Timber Lane, Cherry Lane, Foxx Lane, Philly U, Penn Charter, East Falls Village, and Alden Park all have aspects of private streets/roads. And many new developments have aspects of private streets, often called driveways and the like.

    It's going to be a huge mess as the suburbs age, since private streets are more common there. When homeowners needs to deal with failing sewers and failing water mains and failing 'streets' out of their own pockets, people will be quick to learn whether a house is on a private street or one that the developer deeded to the township at the end of construction. They don't need to do so, nor is the municipality obligated to take title to the streets in a development.

    And when purchasing a property I urge you to ascertain whether it's on public sewer, public water, and a public street. I own a few that aren't and it does present complications that can be awful gotchas. There are upsides though that can make it very special too, though. One last point. The city can lien and Bill you for work it does to private water mains. But they can't charge late fees. I've been paying $30 per month on an approximately $700 bill in protest - I forget whether it's all gone or just down to $100 or so. I legitimately owe the
     
    #6 billy ross, Jun 3, 2016
    Last edited: Jun 3, 2016
  7. billy ross

    billy ross Well-Known Member

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    The abatement is on improvements only. That's how the law is written. Land values are neither fixed nor abated. If you wish it to be otherwise, you should petition to have the law changed. Until then, we'll all follow the law, and not your wishes as to how the law should have been written.
     
  8. Cro Burnham

    Cro Burnham Well-Known Member

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    You realize with language like that you sound like a bureaucratic Soviet or corporate automaton who falls back on legalese gibberish when there is no meaningful intention to address an injustice perpetrated against ordinary people.

    Watch the South Park video. You sound just like the banker. You are absurd.
     
  9. ODragon

    ODragon Well-Known Member

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    Thanks, that is good to know. A quick look on street view doesn't show a sign on EITHER side of that street although, there is a non-reversed colored on on the next block. I am not surprised about new developments though.

    I am surprised by streets in Center City and closer to it; especially where not marked.

    I lived next to private streets in Queens, NY. It was VERY obvious there as there was private street parking (permit fees went to them and were for residents only) and signs very often and many/all of the street signs were different. In addition to many of the things they had to do to keep them private was close them off completely to non-residents at least 1x a year.
     
  10. ShoshTrvls

    ShoshTrvls Well-Known Member

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    Billy, that's not the issue. Of course, land values will go up and you are right, there's nothing in the abatement law, or any other law in Philadelphia, that would prevent the land from being reassessed at taxed accordingly. BUT THAT IS NOT WHAT HAPPENED. What the city did here is simply move part of the value from the improvements to the land in order shift values. If the property was reassessed because the land value went up, then the TOTAL property value should have also gone up -- unless there's some reason that, at the very same time, the value of the improvements dropped by $97,000 (or by whatever amount the land value increased by). And let's face it, that most certainly did not occur.

    Again, my situation shows the problem in its move obvious form, because I did not have an abatement at the time of AVI. My remodel occurred in 2015, and the city determined that it increased the value of my improvements by $75,000. But when they shifted the value from improvements to land, all of a sudden, my remodel only increased the value of my improvements by $50,000? That's bullshit -- it is the same remodel and I'm entitled to the same $75,000 abatement for 10 years. The city can't change my abatement amount on whim, which is exactly what it did.
     
  11. Cro Burnham

    Cro Burnham Well-Known Member

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    And . . . . it's gone.
     
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  12. billy ross

    billy ross Well-Known Member

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    It sounds like we need to make a few assumptions here. If any of the assumptions are incorrect, then we'd need to change the conclusions. So let's start:

    1) The total assessment this year and last was on the money - that is, it was correct, and it didn't change much if at all year on year.

    2) Land value didn't change dramatically year on year; there was no announcement which would have caused your land value to skyrocket in the past year.

    3) Your land assessment last year was wildly off the mark; you were dramatically under assessed. The assessed value of your land for last year was much less than it would have sold for on the open market at the time.

    Assuming that all three assumptions are correct, and I honestly do believe them to be correct, then the inescapable conclusion is that your land was wildly under assessed and your improvements similarly over assessed last year. The only thing to do would be to fix this by doing exactly what the city did and if possible go back in time and give you a bill for the corrected assessment for last year. I don't believe that the city can do retroactive assessments though, even for such wildly inaccurate assessments as yours. So I guess you got off lucky.

    Hopefully the city can retroactively fix improper assessments though so that when you appeal they can fix the problem at its root by fixing the original assessment and giving you a bill to make up for your previous underpayment. Let's face it. Your house is extremely valuable, regardless of what you paid for it, and you really should pay your fair share in taxes. If you don't like it you can sell your uber valuable house and move to a more proletariat hood.
     
    #12 billy ross, Jun 3, 2016
    Last edited: Jun 3, 2016
  13. ShoshTrvls

    ShoshTrvls Well-Known Member

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    Huh -- none of your "assumptions" are what the assessor' office actually determined, after a real inspection of my home in 2015 -- namely the my rehab improved the value of my house by $75000. Don't know how you missed that one -- oh, wait, that's because it is an actual FACT that you are conveniently choosing to ignore.

    Why don't you try this one, which is closest to the truth.

    The total value of my property was correctly assessed in 2015, but the portion attributable to land was too low and that attributable to the improvements too high.

    The value of my abated improvements was properly assessed in 2015.

    The total value of my home was properly and correctly assessed in 2016 as being the total of the 2015 value plus the improvements.

    In the assessor had done its job properly, then the reallocation of land and improvement values should not have affected my abatement because no part of my rehab increased the value of the land.

    Or let's look at it another way. Say I didn't do my rehab in 2015. My total assessment in 2017 remains the same as in 2015, with merely the land value shifting (which is exactly what the assessors computer modeling did). *Then* I complete my rehab in 2017, it gets valued at $75000. Result (for the exact same work, just 2 years later) - total assessed value the same as it is today (original AVI plus value of improvements), amts attributed to land and improvements the same, but I have my full $75000 abatement.

    (I really thought this wouldn't be that difficult for someone of even moderate intelligence to understand but you've proven me wrong Billy. Congrats)
     
  14. billy ross

    billy ross Well-Known Member

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    What did you do to your house? How much did the work cost you to do? What causes you to assume that that $75,000 number is a correct number and not some number arrived at formulaically? You seem to have an oddly high confidence level in the ability of the original assessor to value your rehab/addition despite the fact that he or she clearly screwed up the split between land and improvements.
     
  15. borntochill

    borntochill Well-Known Member

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    He did his homework and knew the land was worth $7500? Really? I can't tell if this guy is the stupidest attorney ever born, or the very definition of entitlement and chutzpah. The latter, most probably.

    Here's the tax record for the house he bought, a 3 story Bella Vista row home on a 383 SF parcel. He's saying (with a straight face, no less) that the land is worth $7500, and he has alerted the media because the city now wants him and his wife to pay $1400 taxes on their $354,000 home? The closest vacant lot, practically next door to his home, and which happens to be a smaller lot, recently sold for $72,500.

    I completely agree with everyone here who says that the method the city used to reassess land values was horrible, and it resulted in flawed assessments that are particularly impactful on those with abatements. It's entirely appropriate for him to challenge his land assessment which should probably be closer to $85,000 instead of $100,000. But not $7500. For f***s sake.

    This guy should thank his lucky stars that his home's land value was insanely under-assessed for the first few years he lived there which saved him (and cost the city) thousands of dollars extra that he'd have had to pay had the city's tax roll land value reflected anything close to market value.

    I'm amazed that peops who rightly bitch about the cost to all of us from widespread real estate tax delinquency are defending this entitled asshole attorney who believes he deserves a $7500 land assessment on his Bella Vista home.

    I'm well aware of the rationale for abatements. But that doesn't mean one is entitled to throw a hissy fit when their land value assessment rises to something close to actual market value, any more than people who were living in homes worth $300,000 and paying $300 in RE taxes prior to AVI were entitled to throw a hissy fit when their homes were reassessed to reflect something much closer to market value.

    No question, the city f***ed up the land value reassessments. But would anyone here make the case that, before the reassessments, the City's land valuations for most Philadelphia homes were overall closer to their actual value than they are now?
     
    #15 borntochill, Jun 4, 2016
    Last edited: Jun 4, 2016
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  16. Big Irish

    Big Irish Well-Known Member

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    In the article he says one of the reasons they wanted to live in Philly was "affordable housing" and yet they think $100 a month in RE taxes is not affordable. $100 a year, yeah we'll buy a house, $100 a month, no thanks. In the newsworks article he says how much the city is missing out 'cause he & the misses aren't going to eat out or go to the theater with that extra benjamin every month. You couldn't pick a more unsympathetic example.

    I'll say it again, the real injustice here is that people buying $300k and above houses are paying $100 a year in the first place. That shows how badly the abatement system is flawed. No one, nowhere in this city, should be paying $100 a year.

    Oh, and anecdotally, everyone on my block (40 or so) had their land value at least double, some much higher than that, and we're all approx 6 figures or above. There's 1 abatement.
     
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  17. ShoshTrvls

    ShoshTrvls Well-Known Member

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    Really, Bllly, I can't believe that you are working this hard to come up with idiotic arguments to support a proposition that is not supportable in any way, shape or form.

    My property was not reassessed in 2017 -- all the occurred was that the percentage of the total assessed value was shifted from improvements to land. If the improvements were only "worth" $50,000, then the total assessed value of my property should have gone up only $50,000 in 2016. The tax assessor simply cannot have it both ways -- increasing the value of my property by $75,000, the amount it valued the rehab to the IMPROVEMENTS to be, but then the following year attribute $25,000 of that $75,000 to "land" instead of improvements.
     
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  18. fiveomar

    fiveomar Well-Known Member

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    billyross, the city corruption apologist. Gotta love it.
     
  19. fiveomar

    fiveomar Well-Known Member

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    The abatement amount is already priced into the home (if there are two identical homes next to each other, the one with the abatement is going to sell for significantly more), so to change the game is not only unfair to the owners, but it would discourage future buyers.

    You make a point about $100 in RE taxes, but this is what they signed up for and a large part of why they decided to buy in the city versus elsewhere. Think about how much tax revenue they are bringing to the city in wage taxes (two high-income earners), the high RE transfer tax, and sales taxes. All money that the city wouldn't be getting had this couple decided to buy a house in the suburbs instead. It's easy to focus on one tax without looking at the big picture.
     
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  20. Big Irish

    Big Irish Well-Known Member

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    He said himself in the article there were many reasons they decided to buy/stay in the city, the sports teams, the nightlife, city life in general, he mentioned taxes last. You don't need to abate their taxes completely to get people to buy into the city. You need to have a balance where there's an incentive to buy but they pay something and don't get a totally free ride, especially when the city's creating new nickel & dime taxes for more money for the schools and the RE tax is what funds them. If they only abated the city's portion of the RE taxes I'll bet many people would still buy and we wouldn't be talking about taxing soda, taxing bottles, the school's share of PPA's uber fees, ad nauseum.

    They both rented & worked in the city already so ... and the taxes you mentioned don't fund the schools, the RE tax does. There needs to be a middle ground between $100 a year and $5k a year, which is their full bill. That and the city needs to collect what they realistically can from the $500 mil they're already owed.
     
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  21. billy ross

    billy ross Well-Known Member

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    I personally believe that neighborhoods should be able to opt out of the abatement in whole or in part. It'd be very democratic, and it would allow the abatement to become more focused over time. Am I the only one who is disgusted that the former home of the Please Touch Museum has a date with the wrecking ball so 'townhouses' can spring from that land? We should certainly have the ability to exempt certain lots from the abatement if we like what's on those lots now and we want to keep those buildings around.

    Of course, it's been awesome to see new construction spring from vacant lots all over the city, but to see gorgeous old mansions come down all over Roxborough to build cereal boxes is really disheartening. The abatement came about as a very clever workaround to Philly's wildly broken assessment system which led to insanely low assessments and an insanely high millage rate which when crunched still yielded very modest property taxes. That was ok for existing buildings but if any newly built buildings were assessed at anywhere close to their full market value there would have been and effectively was no new construction in the city due to insanely high property taxes.

    Enter the abatement as a bandaid. But it was so successful that it's literally changed the face of our city. So it's awesome. But now the momentum is so strong that in many neighborhoods we're running out of derelict buildings to rehab and of vacant lots to build on. I feel fairly strongly that we shouldn't be subsidizing the destruction of our architectural patrimony, and I trust our neighborhoods enough to be willing to allow them to work with the city to identify parcels where we don't want to see teardown activity.

    The abatement is an amazingly powerful tool, but it's a blunt one. We should sharpen it. There are parcels in my neighborhood - our TWO gas stations along the river, for instance - where I very much want to see the abatement remain, in hopes that when gas stations become as obsolete as Sears we can finally get nice stuff there. There are other parcels - our local schools and churches - where I don't want the abatement to be in place. Very recently we lost a school and now we're losing a church and school. We've lost so many public buildings just in East Falls to private use (residential) that at some point the neighborhood becomes less interesting and more of a bedroom community. It is self-defeating to subsidize that.
     
    #21 billy ross, Jun 5, 2016
    Last edited: Jun 5, 2016
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  22. Cro Burnham

    Cro Burnham Well-Known Member

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    Great points. I totally agree.
     
  23. ShoshTrvls

    ShoshTrvls Well-Known Member

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    I don't know that anyone is arguing that the abatement program should not be ended or modified. But that is a completely separate issue as to whether the city can legally alter abatements already granted under the existing law (to which I would argue -- no; that would be an ex poste facto law and they are prohibited).
     
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  24. borntochill

    borntochill Well-Known Member

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    No, Philadelphia is not pulling a bait-and-switch: Higher land values are justified and necessary

    I think this Newsworks opinion piece mostly has it right.

    Prior to the recent adjustment which has so many abated property owners up in arms, the city often assessed property land values (for parcels abated or not) at absurdly low figures. In the case of Silver/Margulies, their land value had been assessed at a ridiculous 2% of their property value. With a straight face, Mr. Silver argues that was accurate and he's absolutely outraged that the city now wants to change it. The reality is that he he got away with murder for a few years. He and his wife saved thousands of dollars that they would have had to pay had their property's land value been accurately assessed before.

    Correcting obvious assessment errors is in no way the implementation of an ex poste facto law, any more than rolling out AVI was an ex poste facto law. Overall, the city's new land value assessments far more accurately reflect actual land worth. That said, I understand Shosh's anger at the ham-fisted, brute force approach the city took, and I understand why she is contesting it.

    Still, I have no sympathy for other abated property owners who live inside some sort of bubble where they think their RE taxes can't rise, even significantly, during their abatement period. Philly land prices have skyrocketed in the past couple years. It's not just the city making sh** up so they can pull a fast one on abated property owners:

    PlanPhilly: What's driving Philly's rising land values?

    [​IMG]
     
  25. Jayfar

    Jayfar I'm very old®

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    I'd be very interested is seeing how we can adapt Baltimore's model and expand preservation and renovation of existing structures. They leverage state and federal tax incentives and aggressively add buildings to the National Register, but they also have property tax abatements:

    "The city's historic tax credit program locks in property taxes for 10 years at the structure's pre-improved value for projects worth less than $3.5 million."
    Historic districts proliferate as city considers changes | BaltimoreSun.com
     
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  26. ShoshTrvls

    ShoshTrvls Well-Known Member

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    That may be true for properties abated ore-AVI but not post AVI. Again, my assessed value went up $75000 in 2016 for one reason and one reason only - I rehabbed. If that rehab was worth 75000 in 2016, it is worth it in 2017. If that rehab was only worth $50000, then my total assessed value needs to drop $25000.
     
  27. Burholme06

    Burholme06 Well-Known Member

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    Commentary: Lured to Philly and slammed with massive tax hike


    These self absorbed tax abatement stories are starting to really grate on me. I like the use of the words "slammed" and "massive" - dramatic much?

    I don’t know if most people move to the ‘burbs after kids. I know a lot do but I’m not sure “most” is factually correct. Further, If you are already thinking of pulling the plug after less than a year, I think you may be overstating your commitment to staying in the City a bit. While we need more middle class people moving into the City, I’m not a fan of people acting like we should kiss their ass just for living here or that choosing to live in Philadelphia in of itself is some type of altruistic endeavor. Go ahead and move to Churchville if you are that peaved, I’m sure the remaining 1.5 million residents will somehow survive and another family will move into the house you currently own. Maybe the next owners won’t overbuy and get in over their heads like these two.
     
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  28. boognish

    boognish Well-Known Member

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    While I have a hard time empathizing with someone whose taxes have only increased $100/month (while mine have increased about $350/month since I bought my house 6 years ago), I think they have a valid point.

    But yeah...the whole "you should be lucky to have me" is so off-putting that it's almost cringe-worthy.
     
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  29. Burholme06

    Burholme06 Well-Known Member

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    That was really my only point. As soon as the violins start playing while you lay out the whole, "I was planning on making this my home until I died and even then, I was going to have my body buried in the backyard so I would always be a part of Philadelphia.....but then they changed my assessment", you have lost the argument with me.
     
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  30. boognish

    boognish Well-Known Member

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    hahahah...yup. If you're expecting that line of reasoning to resonate with Philadelphians, well, you're just shit out of luck.
     
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