Bamboozled March 20, 2017: Property taxes double after phantom additions to appraisal

High property taxes are one of the biggest complaints you’ll hear about New Jersey.

And with good reason. New Jersey consistently ranks as the state with the highest property taxes in the nation.

We’re used to seeing property taxes rise — but not like the gut punch received by Phil Orphanidis of Maplewood after a recent reassessment fiasco.

His property taxes more than doubled — up 111 percent — in just 18 months.

“They raised my assessment with bogus data adding non-existent features,” said Orphanidis, 30. “If they’re doing this to me in Maplewood, I’m 100 percent sure they’re hammering other homeowners who aren’t aware they’re being taxed on items which their home does not have.”

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Bamboozled: Phil Orphanidis looks through his paperwork at his home in Maplewood on March 2, 2017. Orphanidis’ property taxes skyrocketed because of bad appraisals that added phantom features (bathroom) and square footage to the home.

He said with this most recent assessment, his taxes will have gone from $7,100 in December 2015 to more than $15,000 in June 2017.

Trying to get the town to fix what he says are errors has been incredibly frustrating, Orphanidis said.

When he purchased the two-family home in December 2015, it was assessed at $198,700 with property taxes of $7,100 he said.

The property is a little more than 1,500 square feet, with two bathrooms, he said.

The trouble started with a September 2016 “special assessment” on the property because of renovations and upgrades done by the previous owner.

That raised the home’s property taxes from $7,100 to $12,300 based on a $333,700 assessment. It added one bathroom — a bathroom that didn’t exist — to the home.

Orphanidis would have 60 days to pay more than $5,200, he said, and the town sent his mortgage company the bill.

The bank paid the bill.

Then the bank received two more bills for the same extra amount, and it paid both, leaving Orphanidis with a massive escrow shortage.

Looking at a $9,500 mortgage bill to pay back the negative escrow, Orphanidis called the bank, which put a forensic accountant on the case.

The lender realized it had paid the same bill three times, and it asked Maplewood to return the extra two payments.

Only one payment was returned.

Orphanidis said he called the town about the other extra payment.

“They said they only return the money if you ask,” he said, noting the extra unreturned funds, if kept by the town, wouldn’t have been applied to his future tax bills. “How can they do that?”

That was only the beginning.

ADDING NON-EXISTENT SPACE

Maplewood was also in the process of reassessing the whole town.

Before the revaluation, in a combination of communications with the appraisal company and the town, and with two more appraisal visits, Orphanidis thought the extra bathroom error would be corrected.

He was wrong. It got worse.

The revaluation brought Orphanidis’ assessment up to $379,000.

He requested a copy of his Property Record Card.

“I was shocked that that bathroom number was still off. It actually increased from three to three-and-a-half when we only have two, despite an inspector coming out,” he said. “Not only that, the second unit is listed with higher square footage.”

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A copy of Phil Orphanidis’ paperwork showing what he said were errors.

The wrong square footage alone would raise the assessment by $75,000, Orphanidis said, saying the average cost per square foot in town is $312, and the appraisal added 401 bogus square feet to one of the home’s two units.

“This whole process has been a joke,” he said. “I can’t be alone.”

Orphanidis saw that he wasn’t alone, and that this wasn’t the first time Appraisal Systems has made similar errors in Maplewood.

He contacted Bamboozled after seeing our 2012 profile of a couple whose property taxes doubled after Appraisal Systems added an imaginary bathroom with two sinks and 660 square feet to their home.

MEASURING UP

We reviewed Orphanidis’ paperwork, his math, the appraisals and the Property Record Card.

Then we called Maplewood, and Mayor Victor DeLuca arranged to once again send an appraiser to the home.

Orphanidis didn’t want to put his tenant through yet another invasion of privacy — the fourth appraisal since October 2016 — but he knew it would be only way to get an accurate appraisal.

The town’s tax assessor and deputy tax assessor came to the home on March 2.

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Phil Orphanidis waits as tax assessor Edward Galante walks through his home in Maplewood on March 2, 2017.

“They went through floor one in 30 seconds, and then to floor two in the same,” Orphanidis said, noting no one had a measuring tape. “The tax assessor offered to appeal my taxes, but said it won’t be much. Not sure how reducing 1.5 bathrooms and reducing the home’s square footage is not significant.”

The verdict wasn’t what Orphanidis had hoped.

“The change in assessed value after removing the bathrooms was -$4,000,” tax assessor Edward Galante said in an email to Orphanidis, bringing the assessed value to $375,000.”

Galante said the town would file an appeal on his behalf, and he attached the revised Property Record Card.

Orphanidis replied, asking how removing one full bath and one half bath would only be a $4,000 assessment reduction. And, he asked, what about the incorrect square footage?

Galante said the town was confident about the square footage, saying the former owner had an appraisal when he previously appealed the home’s taxes.

Galante also said the appraiser for the property owner and deputy tax assessor Chris Murray “measured the house together and came up with the same dimensions. Appraisal Systems measured the house as well and basically came up with the same square [footage].”

He asked Orphanidis about his own calculation.

Orphanidis replied by sharing the appraisal done by his bank when he purchased the property, and he said Galante was wrong about Appraisal Systems measuring the home.

“They saw the home twice, with me present both times, and neither time did they ever measure the property,” he said in an email reply to Galante. “It was in and out within 7 minutes.”

That exchange was more than a week ago. Galante still hasn’t replied, Orphanidis said.

We again called DeLuca, the mayor.

He agreed mistakes were made, but he said we should discuss the specifics of the case with Galante.

The mayor did answer one question: Why does Maplewood still use Appraisal Systems, which was paid more than $660,000 for the recent reappraisals, if it keeps adding non-existent rooms and square footage to homes.

“It was disappointing that Appraisal Systems kind of dropped the ball on this one,” DeLuca said. “This clearly was a mistake.”

DeLuca said with nearly 7,000 properties being reassessed, sometimes there are errors. To correct that, he said, the town set up appointments with homeowners who wanted appraisals explained to them. In some cases, he said, values were lowered, and in other cases, they weren’t.

But overall, they haven’t received many complaints, he said.

Appraisal Systems didn’t respond to requests for comment.

We went back to Galante to understand why the removal of the 1.5 baths only led to a $4,000 reduction. He said that number came from a state manual, and can be adjusted by assessors as long as the adjustments are consistent throughout the town.

On the square footage, Galante said he still believes the town’s square footage assessment is correct.

Orphanidis said he will appeal before the deadline, which is April 1 for regular appeals and May 1 for revaluations.

He said there should be a bigger difference in his assessed value based on the actual square footage and the removal of the 1.5 non-existent baths.

He said there should be a bigger difference than $4,000 in his assessed value.  To support his position, he cites the previous Bamboozled column in which the home’s assessment was lowered from $784,000 to $615,000 after one phantom bathroom and 660 wrongly added square feet were removed.

We don’t know what else led to the lower assessment, but it could have been because the appraiser wrongly assumed the home had updated features and later learned it did not. If that’s the case, the upgrades done by the previous owner of Orphanidis’ home could work against him.

“It makes no sense. Yes, it hurts me when things like this happen, but who it really hurts are families, renters and landlords who simply pass these bogus increases onto their tenants,” he said. “It’s a slap in the face.”

We’ll let you know what happens.

Have you been Bamboozled? Reach Karin Price Mueller at Bamboozled@NJAdvanceMedia.com. Follow her on Twitter @KPMueller. Find Bamboozled on Facebook. Mueller is also the founder of NJMoneyHelp.com. Stay informed and sign up for NJMoneyHelp.com’s weekly e-newsletter.

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