Update: Dallas Court of Appeals Upholds Property Owner Right to Pursue Multiple Appraisal Claim and “Look Behind the Roll” Under Section 25.25(c)(2) of the Texas Property Tax Code.
By Natalie A. Maloney | May 19, 2023
Hunt Woodbine Realty Corp. v. Dallas Central Appraisal Dist., No. 05-22-00182-CV, 2023 WL 2596074 (Tex. App.—Dallas March 22, 2023, no. pet. h.)
This case is important because it holds a property owner may use the remedy for multiple appraisal in Section 25.25(c)(2) of the Texas Property Tax Code to remove value from the appraisal roll. The Dallas Court of Appeals expressly rejected the appraisal district’s argument that a property owner may not go “behind the appraisal roll” to revalue property or change the appraised value under Section 25.25(c)(2), which allows corrections to the roll in any of the 5 preceding years for multiple appraisal.
Here, the property owner leased its parking lots to the owner of the Reunion Hotel in Dallas. The parking lot owner argued the lots were the subject of a multiple appraisal: their value was captured when they were appraised separately as parking lots, and again as part of the hotel when it was appraised based on its income. The property owner’s expert testified it is standard practice for appraisers to appraise an economic unit—a combination of parcels used for mutual economic benefit—as a whole, instead of each individual part independently. The parking lot owner argued the hotel’s appraisal, as an economic unit, indirectly but necessarily captured the value of the parking lots.
The case was tried on cross-motions for summary judgment. Although the trial court ruled for the appraisal district—denying the parking lot owner relief under Section 25.25(c)(2)—the Dallas Court of Appeals reversed. The Court concluded allowing relief under Section 25.25(c)(2) would not “upset the ‘delicate legislative balance’ between taxpayers’ rights and appraisal-roll finality” reflected in the protest procedures in Chapter 41 of the Code. The Court reasoned that the relief available under Section 25.25(c) is part of that legislative balance.
Issues remaining for the trial court included: whether a multiple appraisal occurred (there was evidence the appraisal district did not properly utilize its software to avoid multiple appraisal); if the hotel was valued as an economic unit whether the value was properly allocated to the parking lot accounts; and if a multiple appraisal was established whether the parking lot owner was entitled to relief—the hotel owner was not a party to the suit—and the parking lot owner did not demonstrate it rather than the hotel owner was the proper party for relief.
The key takeaway from this case is the Court’s clear assertion that “nothing in Section 25.25(c)(2) prevents a court from considering evidence beyond the appraisal roll. The precedent that prevents courts from going “behind the appraisal roll” applies to Section 25.25(c)(3), not (c)(2).
To review this case’s appellate history and status, click the following link (or copy and paste): https://search.txcourts.gov/Case.aspx?cn=05-22-00182-CV&coa=coa05.
To review this case’s opinion, click the following link (or copy and paste): https://search.txcourts.gov/SearchMedia.aspx?MediaVersionID=5acd3c92-b1ee-4b5b-a76a-38b6c354eff7&coa=coa05&DT=Opinion&MediaID=1f8bf42a-e3e8-413b-9715-b735009e1809.
Key Sections of Texas Property Tax Code:
§ 25.25(c), Correction of Appraisal Roll
 Section 25.25(c)(3) allow “changes in the appraisal roll for any of the five preceding years to correct: …3) the inclusion of property that does not exist in the form or at the location described in the appraisal roll[.]”