We offer a full range of PROPERTY TAX services.

 

TAX MINIMIZATION & RECOVERY

We minimize the realty tax that you and your tenants pay on real property.

 

ASSESSMENT & TAX MANAGEMENT SERVICES

We administer and manage the data and support business processes required to efficiently look after large realty tax liabilities for real property.

HOW?

  1. We minimize realty taxes through a number of means and measures including;

    1. traditional assessment appeals where valuations and/or classifications are contested informally and formally argued before tribunals
    2. executing on tax relief measures granted through municipal or provincial statute
    3. reducing the cost of administration and/or increasing the efficiency of payable systems and business processes to review, audit and pay realty taxes owed to taxation authorities
    4. auditing payables between tenants and landlords in context of realty tax allocations and resolving discrepancies in charge-backs
 

HOW?

  1. We support internal business functions including finance, tax and payables through a series of proven business processes and superior technology solutions to address;

    1. elimination or reduction of late payments and/or penalties associated with realty tax bills
    2. receiving, reviewing, approving tax bills and advising AP function of due dates, approved amounts and report on and resolve anomalies
    3. your ability to generate and access necessary reporting to budget, forecast, accrue and stay on top of data requirements inherent with large, complex portfolios

Case studies on different sectors that we have served are available here:

Commercial   |   Retail   |   Industrial   |   Oil & Gas   |   Power   |   Hospitality

The following are 5 specific case studies that demonstrate our services and methodologies as detailed above.


Case Study 1: National Retailer

Issue

Client has a large portfolio of owned and leased assets that include;

  • leased and owned stand alone retail > 50,000 s.f.
  • in-line cru’s less than 5,000 s.f.
  • distribution centres (owned and leased)
  • office space (leased)

Client has completed a recent acquisition adding 300 leases to the national portfolio

Danger

Client is struggling with implementation of upgrades to lease administration software

Client has limited internal resources to support the review and approval of tax bills to support AP function within accounting

Client does not have time, resources or expertise to thoroughly review and audit reconciliations

Management within real estatefunction has struggled with integrity of reporting on significant realty tax liability and ability to forecast, budget and rationalize expenditure in minimization efforts

Why AEC

Platform of local project managers reporting to client manager   / client are in place to support annual appeal recommendations and execute on informal / formal appeal proceedings with various assessment jurisdictions.

AEC access to client’s existing lease administration platform has enhanced our ability to get to the data with minimal investment by client personnel.

Tax Information Principle ™ business processes are in place to support access to reporting and year two reviews are being prepared in more cost effective intimely manner which increases clarity and supports decision making.  AEC personnel and client have more robust data from which to support decision making.

Client Success

Tax penalties arising from late payment issues has been reduced to less than $5,000 on payments in excess of $100M.

Tax recoveries from review of landlord re-charges are up 150% from prior year and supporting synergy goals of client’s expanded real estate portfolio.

AEC is sharing ownership of clients mandate to generate synergies from tuck-in of three hundred (300) additional leased locations and supporting measured goal of additional savings for expanded portfolio.

Reporting process now includes taxes recovered,  tax minimization in current period and taxes foregone from prior year adjustments and has enabled client to increase his ability to report internally and increase internal awareness about the excellent work that is being done with the realty tax function.

 

Case Study 2: Condominium Office Development - Speculative

Issue

This engagement was a referral from a commercial brokerage firm that has received a listing mandate to sell commercial condominiums in a new office building.

The client had an existing service provider that had appeals in place on the development site that included a series of heritage buildings.

Danger

The initial concern that was self-diagnosed by the client and listing broker was to accurately determine what the taxes would be on the new development.  As part of the pricing and marketing planning, there was a requirement to understand and communicate to prospective owners what their taxes would be upon occupancy.

The client has a host of challenges with this unique development that include but are not limited to receiving zoning approval, obtaining site plan approval,planning project construction to accommodate heritage protection requirements, addressing city’s request for capital upgrades to services infrastructure,  pricing and marketing for unique development within a niche market.

Why AEC

Time is precious and the window for the client to receive regulatory approvals is critical to the financial success of this development.

In short order, we have established a confidence level with the client that tax related matters are handled and have done so in part by creating some room in the development budget with the identification of tax recoveries that were previously missed by our competitor.

Client Success

Upon meeting with the client and understanding the nature of the existing property and proposed development, it became apparent that in addition to addressing the tax forecast requirement there were additional opportunities that the client was not aware of.  Based upon our experience with the specific tax jurisdiction and with similar properties protected by local heritage preservation statutes, we identified and brought forward three (3) specific minimization strategies that may exceed in excess of $2M in recoveries for the client.


Case Study 3: Manufacturing Facility - Receivership Assignment

Issue

Receiver was mandated to wind down a parts manufacturing facility, liquidating the equipment inventory and subsequently selling the building.

Several parallel initiatives were lodged at on-set of receivership assignment including Municipal Act applications and formal appeals before the Assessment Review Board.

Danger

The intricacy and detailed work required for this job required an extremely methodical and hands-on approach. Our investigation, analysis and review included;

  • a review of outstanding appeals, 
  • obtaining and reviewing various court filings supporting receivership assignment,
  • investigating the mandates and actions of other entities party to the proceedings (including interviewing equipment liquidator), 
  • reviewing the listing agreement with brokerage firm assigned to sell the real estate,
  • interview listing broker
  • review purchase and sale agreement
  • researching case precedent for market value nature of distress sales and court interpretation of same
  • understanding the nature of judge’s approval of sale process to validate transaction as being indicative of market
  • preparing for and attending to tribunal hearing

Why AEC

Our approach, response and the results derived from this appeal activity were grounded in a high level of detail and thoroughness that was driven by the Fact Finders™ on our team.    AEC’s team of valuation professionals is comprised of individuals that thrive off of information and wading through data to get to the truth.  The thirst and appetite for information and turning over every stone in the course of a mandate are unique and have created a reputation that we do not take short-cuts and that when we show up, we mean business. 

Client Success

In context of this assignment, we were successful in assuming carriage of prior year appeals that pre-dated the receiver’s assignment and ultimately increased the recovery that flowed through to the creditor, which is our client’s client.

 

Case Study 4: Industrial Process Facility - Classification Change

Issue

This service engagement related to a light manufacturing operation that cleaned, repaired and distributed leased uniforms and linens.

Danger

The engagement was in part a throw-back to simpler days when appeals were filed and we “went fishing”.  In the case of this particular property, there was an initial hunch that the classification of the property was incorrect and had not been adequately reviewed and/or properly interpreted in the past.

Why AEC

We knew that if we were successful in having our interpretation of ‘use’ applied that we would generate annual savings of 18% for the client at this location.  This specific jurisdiction had instituted a rate reduction for Light Industrial properties to reduce the amount of tax collected for Education purposes.  While the assessment authority has taken significant steps toward updating the appropriate classifications, the volume of properties and ensuing grey areas with interpretation have resulted in some eligible properties not being captured in the appropriate class and subsequently not benefitting from the reduced rate. 

Client Success

We were successful at the second level of appeal on this engagement and subsequently the decision has been appealed further for judicial review by the assessment authority.   

What is of particular interest in this case is the fact that the Client is reviewing our argument and the ensuing precedent to determine if it has applications in other relevant areas of taxation that may create a benefit far greater than the realty tax adjustment that is being sought via the classification issue.


Case Study 5: Single Tenant Office Building

Issue

Our client operates an inbound call centre operation within an eight storey office building.    The property is occupied by way of a lease and owned by a mid-sized public REIT.

Danger

Prior to our engagement, the landlord’s representative had appealed the assessment for the previous assessment cycle but failed to review the lease, did not inspect the property and/or provide any reporting in terms of the rationale for withdrawing the complaint that impacted three (3) taxation years.

Why AEC

At the time of our assignment, we were able to identify and subsequently assume carriage of outstanding appeals that were a function of the landlord filing a protective appeal.  The assumption of carriage of the outstanding appeals was completed by way of a simple request and explanation to the landlord that our client already held ownership of 100% of the tax liability, would in turn be the sole beneficiary of any successful appeal and wanted to ensure they had control and participation in the recovery review process.

Client Success

This engagement is in the resolution stage through negotiation with the assessment authority. Based upon our successful experience ‘across the street’ and from an analysis of assessment comparables and market evidence, we are expecting a 25% reduction in the assessment which in turn will yield a recovery for the client in excess of $450,000.

The negotiated settlement is a by-product of the relationship that we have with the Assessor that has been built upon not cutting corners and ensuring that each analysis, review and subsequent presentation to the assessment authority is very well researched,  properly laid out and supported with strong evidence.

The assumption that the landlord and/or their representative for this single tenant property had matters in hand proved to be costly in that it is estimated that the same level of discrepancy in the assessment (25%) was in place for the 2006-2008 taxation years and meant there was in excess of $350,000 left on the table in potential recoveries.