BY HUNTER LANE, VICE PRESIDENT, LANE PROPERTY TAX ADVOCATES

Natural disasters make headlines increasingly often these days — everything from hurricane-force winds dealing widespread power outages to wildfires that decimate all in their path. Effects aren’t limited to those directly impacted by wild weather. Long after communities resume business as usual, commercial property owners grapple with higher costs related to property assessments, insurance and taxes.
Understanding how disasters impact property values — and how to fight back — can play a crucial role in keeping a business viable. Let’s explore what today’s commercial property owners should know to safeguard their investments. The Link Between Natural Disasters and Property Assessments The financial toll of extreme weather extends beyond physical damage. Natural disasters can have significant impacts on commercial property market values across a region. For properties in a storm’s path, resulting damage often renders a building temporarily unusable while necessitating costly repairs. Although this can decrease a property’s market value, it takes time before a tax assessment catches up to a property’s true condition — if it ever does catch up. The mass appraisal systems used by most county appraisal districts (CADs) often result in inaccurate valuations, leaving owners of damaged properties paying more than what is rightfully owed.
Undamaged properties can also experience seismic shifts due to economic and real estate trends. Businesses that close or relocate following a disaster reduce commercial occupancy rates, for instance, lower tenant demand and can drive rental income and market values down. Conversely, undamaged areas may attract businesses and residents, driving demand and property values up. In both instances, storm-related impacts result in assessments out of line with a property’s actual condition, performance and value. Additionally, insurance costs often rise in disaster-prone regions. Higher premiums add financial strain, and if taxing entities don’t account for them in assessments, property owners may overpay.

Protecting Affordability in a Changing Climate
With scientists’ expectation that the uptick in extreme weather events will continue, it’s crucial for commercial property owners to protect their financial health. Protesting inaccurate commercial property assessments annually is the best way to keep valuations in check. Here’s how it works.
• Filing: Alert your local CAD of your intent to protest your commercial property taxes. Texas’ filing deadline is May 15.
• Informal Hearing: You or the firm representing you meet with a CAD appraiser to negotiate a lower assessed value. You may reach an agreement then and there.
• Formal Hearing: If the informal hearing fails to yield an agreement, your protest moves on to a formal hearing before an appraisal review board (ARB). You or your firm and the CAD’s appraiser will present arguments, and the ARB will render a decision.
• Arbitration or Litigation: If the ARB’s decision fails to yield the desired result, you have 60 days to begin arbitration or litigation. Your exact path will depend on factors such as your property’s assessed value. Arbitration is a more informal approach akin to mediation, while litigation efforts have the potential to move on to trial.

Why Partner with a Property Tax Firm?
Commercial property tax protests are complex, deadline-driven processes, and success hinges on having a comprehensive argument backed by data. Working with an experienced firm can improve your chances of success. Consider these factors when choosing a property tax firm:
• Local Knowledge: A firm with deep knowledge of your region’s tax laws, market conditions and economic trends is better positioned to advocate for a fair assessment. In addition, established relationships with taxing authorities provide a local firm with insights they can use to position your case for success.
• Transparent Fee Structures: Work with a firm that’s open about when and how you’ll be charged. Although many companies work on a contingency basis, meaning you don’t pay unless they lower your assessed value, filing fees and similar charges can result in costly surprises.
• Diverse Experience: Seek out a firm whose prior work spans a wide range of property types, sizes and scenarios. They can address it all because they’ve seen it all.

Even with a professional firm handling your protest, you play a key role in the process. Engage your team early, so they have plenty of time to build your case, and be prompt when providing data, documentation or proof of damage. Respond quickly to calls, emails or requests to ensure you’re on the same page and working toward a common goal.
As extreme weather events become increasingly common, commercial property owners must be proactive in safeguarding their financial health. Understanding disaster-related tax challenges and contesting unfair assessments ensures you pay only what’s fair — helping you weather any financial storm.