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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