Or. Admin. R. 150-311-0240

Current through Register Vol. 63, No. 6, June 1, 2024

Section 150-311-0240 - Procedure to Correct MAV When Square Footage Error Exists

(1) For purposes of this rule, "Current RMV", as used in subsection (4)(b), is defined as the RMV for the tax year of the petition. For example, a petition submitted in August 2016 will use the roll values for the 2016-2017 tax year to calculate the adjustment.

(2) To correct the maximum assessed value (MAV) of a property for an error in square footage, the assessor must receive a petition from either the current owner of the property or other person obligated to pay taxes imposed on the property. The petition must be filed with the county assessor on or before December 31 of the current tax year on a form prescribed by the department.

(3) The correction to MAV by the assessor must be in proportion to the correction to RMV due to the error in square footage.

(4) The proportion of error and resulting MAV are calculated as follows by the assessor:

(a) For properties described by a single component (for example, land only), use the following procedure to adjust MAV.

Example A: An example is incorporated into the steps with the following assumptions:

The assessor's records show that a parcel has 435,600 sq. ft. (10 acres), when, in fact, it only has 392,040 sq. ft. (9 acres).

The existing RMV is $80,000.

The corrected RMV is $75,000.

The existing MAV is $50,000.

Step 1: Divide the correct RMV by the RMV as currently shown in the assessment records to determine the proportional RMV correction.

Outcome: $75,000 / $80,000 = 0.9375.

Step 2: Multiply the proportional RMV correction (Step 1) by the existing MAV for the property to determine the corrected MAV for the property.

Outcome: 0.9375 X $50,000 = $46,875, which is the corrected MAV for the property.

(b) For properties described by multiple components (for example, land and buildings, or more than one building or structure, or buildings and machinery), use either of the mathematically equivalent procedures in the short method or the long method in example B to adjust MAV.

Example B: An example is incorporated into the steps with the following assumptions:

A property consists of a 3-acre land parcel and two buildings.

Building 1 was incorrectly valued as having 2,000 square feet, when in fact it has only 1,500 square feet.

Current Real Market Value (RMV) of the building with the error is $80,000.

Corrected RMV of the building with the error is $50,000.

The square footage on the land and other building is correct.

The property's total RMV is $400,000.

The property's total MAV is $300,000.

Short method: Step 1: Divide the correct total RMV by the total RMV as currently shown in the assessment records to determine the proportional RMV correction.

Outcome: $370,000 / $400,000 = 0.925

Step 2: Multiply the proportional RMV correction (Step 1) by the existing MAV for the property to determine the corrected MAV for the property.

Outcome of short method: 0.925 X $300,000 = $277,500, which is the corrected MAV for the property.

Long method: Step 1: Determine which component has the square footage error.

Building 1 is the component with the error in square footage.

Step 2: Determine the portion of the property's total RMV that is contributed by the component with the square footage error.

Building 1 RMV is given as $80,000.

Step 3: Calculate the ratio of the RMV of the component with the error to the RMV of the entire property.

Outcome: Building 1 RMV ($80,000) divided by Total RMV ($400,000) = 0.20.

Step 4: Multiply the property's total MAV by the ratio obtained from Step 3 to determine the MAV attributable to the component with the error in square footage.

Outcome: $300,000 x .20 = $60,000.

Step 5: Subtract the MAV attributable to the component with the error in square footage (Step 4) from the property's total MAV to determine the base MAV.

Outcome: $300,000 - $60,000 = $240,000.

Step 6: Divide the correct RMV of the component by the RMV of the component as currently shown in the assessment records to determine the proportional RMV correction ratio.

Outcome: $50,000 / $80,000 = 0.625.

Step 7: Multiply the proportional square footage error ratio (Step 6) by the MAV attributable to the component with the square footage error (Step 4) to determine the corrected MAV attributable to the component.

Outcome: 0.625 x $60,000 = $37,500, which is the corrected MAV attributable to the component.

Step 8: Add the corrected MAV attributable to the component (Step 7) to the base MAV (Step 5) to determine the corrected MAV for the entire property.

Outcome of long method: $37,500 + $240,000 = $277,500, which is the corrected MAV for the property.

(5) For a building that is valued by summing the individual value contributions from distinct portions of that building, the particular building portion affected by the square footage error may be considered as a separate component such as in example B above when making the correction to MAV. Examples of this type of building include but are not limited to a warehouse with attached offices or a house with an attached garage.

(6) Notwithstanding that a property's MAV has been corrected due to a square footage error, the corrected MAV remains subject to adjustments required by ORS 308.146 to 308.166.

(7) Roll corrections pursuant to ORS 311.234 are to be made using the procedures in 311.205.

Or. Admin. R. 150-311-0240

REV 2-2002, f. 6-26-02, cert. ef. 6-30-02; REV 4-2015, f. 12-23-15, cert. ef. 1-1-16; Renumbered from 150-311.234, REV 28-2016, f. 8-12-16, cert. ef. 9/1/2016; REV 32-2018, amend filed 12/31/2018, effective 1/1/2019

Statutory/Other Authority: ORS 305.100

Statutes/Other Implemented: ORS 311.234