How Much Do Property Tax Appeal Lawyers Cost?
When you hire a property tax appeal lawyer to evaluate your tax assessment and prepare an appeal, the lawyer will be working on whatever fee structure you have negotiated. Most property tax attorneys in Chicago work on an hourly or contingent fee basis. Some offer flat fee arrangements usually for small tax refund claims and disputes under $2,500. Amounts in dispute that are more than $2,500 are often billed using a blended hourly and retainer agreement. Each of these types of fee arrangements can be fair but how a fee is calculated during a case has the potential to substantially increase or decrease the amount that is ultimately paid.
In general, hourly fee arrangements can be structured as large retainers to start, with a small hourly rate assessed against the retainer; hourly rates and an hourly cap for the entire matter , and hourly rates assessed against the retainer with a refund against the retainer if the actual bill is less than the retainer. We encourage the parties to discuss fee arrangements with the lawyer before the engagement letter is signed. It is common for a client and the attorney to establish the terms of a fee agreement and chart their progress in achieving the goal in writing.
Contingent fee arrangements are those where a percentage of the amount saved is paid to the lawyer at the conclusion of the appeal process. If a refund is obtained, the property owner typically writes this check to the lawyer who then sends the refund to the property owner. We recommend clients and their lawyers agree at the beginning of the matter what percentage of the save is to be paid to the lawyer and when the contingent fee is payable.
The Factors that Impact Attorneys’ Fees in Property Tax Appeals
There are myriad factors will ultimately come into play in the fee portion of determining the costs of a property tax appeal. The ultimate number will frequently be agreed upon after a complex analysis. However, the factors commonly used are:
a. Complexity
b. Experience and Reputation of the Lawyer
c. Location of the Property
d. Additional Costs
- Complexity – It is only natural that a simple appeal will cost less than a complex one. Some reassessments are truly simple (for example, houses with no improvements). There are other properties that are downright mysteries to the tax payers, the lawyer, and the Board of Review. The more complex the case, the more time spent, and the more expensive the anticipated fee.
- The "Reputation" of the Law Firm – Having previously negotiated with other law firms, their experience level with the Board of Review, and the overall reputation of the law firm will have an important relevance in determining the cost of a matter. While one wants the best for the less expensive that is sometimes too good to be true. Sometimes you get what you pay for.
- The Location of the Property – While everyone believes their matter is special, many properties are located in regions where the firm may get the benefit of the doubt because of its proximity to the attorney. The inverse is also true; in locations that have not seen as much activity, the Board of review may not be so flexible.
- Additional Costs – This includes costs not generally included in the lawyers’ fee, such as filing fees, copying costs, expert witness fees, and travel expenses. Generally, these costs are passed on from the law firm to the client at-cost, rather than as a mark-up.
The Benefits and Drawbacks of Retaining a Lawyer for a Tax Appeal
There are many factors which go into the decision to hire a lawyer to represent you in property tax appeals. Most clients are risk averse and want to know what they are getting into in order to make an informed decision. Lawyers and clients alike want to be able to predict whether they will win or lose and what the cost will be.
Lawyers want the client to be successful too and the client wants a successful outcome at the lowest cost possible. We can start by looking at the success rate for cases filed by lawyers versus self represented taxpayers. Keep in mind that many taxpayers who are not represented must file their appeal, go to a tribunal hearing and file a brief (which is a long motion with arguments and case law to back up the taxpayer’s position) without any legal assistance.
Worse yet, the taxpayer’s appeal will be denied at the first two levels if they do not prove their case and even with proof, there is no guarantee of success. If the case is not successful, the taxpayer has to go to court and file a lawsuit to appeal the case. This sounds like a very frustrating process and many times that frustration is given to the lawyer who is hired at the end of that process. It is also a very expensive process and extremely time consuming.
Thus, the case statistics show that lawyers fare better at every level of review. The cost to taxpayers for a lawyer generally runs between $350 and $500 per hour for attorney rates. So what is fair? 2 hours for a settlement at the Board of Assessment’s hearing is $1,000. A court case is different due to the level of review and expenses involved in litigation but certainly a win for the court case goes a long way in settlement negotiations.
We have learned from experience that appealing your taxes without legal representation is like trial by fire – you don’t have the back up of a lawyer who knows the outcome of similar cases, you are happy to save money rather than spend it, and you lose out on the certainty and reliability of good case law supports your arguments. In the end, all potential savings gained do not equal the value of the time consumed and the lack of knowledge you have compared to your opposition.
Basically, anyone who is going to organize an appeal must invest the time and effort that a lawyer does to prepare for a hearing. But if you want the same level of expertise and effort as a lawyer gives, you have to hire one. When you hire quality legal representation, you are investing in achieving the same level of success without learning the ins and outs of the appeals process. You are paying a qualified expert to bring your case to closure. You are paying a professional to do his job to the best of his ability.
By spending some time with your attorney upfront to determine when to bargain, when to settle and when to fight, you will get the best results and the most satisfaction for your money.
How to Find the Most Qualified Property Tax Appeal Attorney
Choosing a property tax appeal lawyer is a significant decision that can have serious financial implications. A skilled lawyer can help you navigate the complexities of the process and work toward obtaining a fair resolution. Here are key criteria to consider when selecting a property tax appeal lawyer:
Expertise in Local Tax Laws: The law surrounding property taxes can change from state to state, and sometimes even from county to county. A solid understanding of local tax codes and regulations is critical. When you hire a lawyer with expertise in the local area, you ensure they are familiar with specific challenges and opportunities in your jurisdiction.
Proven Track Record: When selecting a property tax appeal lawyer, you’ll want to know that they have been successful in the past. Ask about their history with property tax appeal cases and look for any awards or recognitions they may have received. Checking for client testimonials or case studies on their website is also a good method for vetting their experience.
Client Reviews: It is beneficial to research testimonials from past clients. Many clients share their experiences online , which can provide insight into how the lawyer handles appeals. A lawyer with a history of satisfied clients will give you confidence in your choice.
Transparency in Fee Structures: Understanding how much you’ll be charged and what services are included is essential for any legal process. Look for a property tax appeal lawyer who is upfront about their fees, billing procedures, and other costs involved in hiring them. This transparency demonstrates a level of professionalism and the desire to create a straightforward relationship with clients.
Accessibility: A good property tax appeal lawyer will be accessible and responsive. Check to see if they have office hours that accommodate your schedule, and how quickly they typically respond to email and phone inquiries. In addition, inquire about their availability for face-to-face meetings, telephone meetings, and video conference meetings.
Alternatives to Hiring a Property Tax Appeal Lawyer
Property tax appeals do not have to be handled by an attorney. DIY litigation is always an option. There are also online real estate tax appeal companies that research the half million properties in Cook County once per year and then offer to appeal property tax cases for $299 or even $199.
These online appeal services try to keep the $300 price point as a competitive advantage. Plus, these types of companies will act on the taxpayer’s behalf as long as the $300 limit is reached. This means that even if they only save you a couple hundred bucks, they are likely to make an appeal on your behalf. I once sent a couple thousand dollars to a real estate tax appeal company without much notice. After one of my properties obtained a favorable decision, I received a 60% refund from my initial investment. In other words, my $200 investment lead to a $1200 profit after appeals were completed. The savings would have been even more substantial if there were not $1,000 in attorney fees associated with the appeal. You may never see your additional money in this situation, but give it a shot. Worst case, you save $300. There are no real downside in this situation.
In addition to the online options discussed above, the Cook County Assessor’s Office has a program known as the Board of Appeals Property Tax Appeal Clinic. This free clinic educates taxpayers on the time and expense associated with appealing property taxes. They try to inform the taxpayer about the types of information that would be required for a successful appeal and how much money and effort would be necessary to achieve a tax savings. Always keep in mind that the Assessor’s office runs this clinic so they are not exactly an independent program. The employees at these clinics can be fair, they can also be biased and may be trying to scare you out of making an appeal at all.
Negotiating Attorneys’ Fees and Controlling Costs
It’s not uncommon for taxpayers to wonder if they are being charged too much for their property tax appeal. Taxpayers should never be afraid to ask their property tax lawyer to explain the fees and what services were rendered in return for the fees. And taxpayers should also not be afraid to ask if their lawyer can perform the services at a lower fee. Remember, your lawyer has an ethical duty to charge a fair, reasonable fee for your case and your lawyer should not have a problem charging less if you both agree that it is appropriate and fair. You may not always get a lower fee, but you may get a different, less expensive, solution to your case.
You can also ask your lawyer if they offer a flat-fee arrangement. Most property tax lawyers will offer to handle an appeal or process before the Board of Review for a flat fee, but you can request that a flat fee be used in any situation. Keep in mind that not all legal work can be handled on a flat-fee basis , but you should check with your lawyer about what options are available to you. Flat fees are more common for commercial property tax appeals that can be handled in one step before the county board of review and one step in the state tax appeal court.
Notwithstanding flat fees, property tax lawyers’ fees for most single family residential property tax appeals are typically due during the year that your appeal is worked on. So if you hire a lawyer today, your fees are generally due in full by year-end. However, if you have a commercial property tax appeal, the fees are often due at two or three different times during the calendar year in rough stages. That means that instead of paying your fees in full today, you would pay some now and some later. Your lawyer is not likely going to agree to be paid on the installment plan, but instead may agree to charge fees during the year that are reasonable and fair—for example—in early July and mid-December.