Property taxes are one of the largest operating expenses for commercial properties, and in many lease structures, tenants ultimately pay all or a portion of that cost. When an assessment appears too high or out of sync with market conditions, tenants often wonder whether they have the right to challenge it. The answer depends on state law, lease language, and the relationship between the tenant and property owner.

Who Has the Right to Appeal?

Most states allow a “party in interest” to challenge a property tax assessment. While this traditionally refers to the property owner, many jurisdictions recognize that a tenant responsible for paying property taxes may also qualify.

A tenant’s right to appeal is shaped by two factors:

1. State statutes defining who qualifies as an interested party
2. Lease provisions outlining who controls tax matters

Tenants in triple‑net (NNN) leases – a lease in which the tenant pays base rent plus the three major expenses: property net taxes, building net insurance, and net maintenance – are often in the strongest position to appeal, but only if the lease grants them that authority.

Why Lease Language is Critical

Modern case law places significant weight on the specific terms of the lease. Courts rarely infer appeal rights when the lease is silent. As a result, tenants and landlords increasingly negotiate these provisions upfront.

Key clauses to review include:

• Right to initiate an appeal
• Obligation to notify the other party when assessments are issued
• Responsibility for costs, including appraisals and consultants
• Control over strategy, including selection of representatives
• How savings or refunds are allocated

If the lease gives the landlord exclusive control, tenants may still request the landlord file an appeal, but they cannot assume the right to do so themselves.

How Today’s Market Conditions Influence Appeals

The commercial real estate landscape has shifted significantly in recent years, and those changes have affected both assessments and appeal strategies.

Office and retail properties in many markets have experienced fluctuating occupancy levels, evolving tenant demand, and changes in performance, especially after the effects of the pandemic. All of that can create discrepancies between the assessed value of a property and its actual market value, increasing the likelihood that an appeal may be warranted.

Property taxes also continue to rise in many areas, prompting tenants to scrutinize pass‑through expenses more closely. This has led to more frequent reviews of annual reconciliations, an increased use of audit rights, and a greater interest in appealing assessments that drive operating costs higher.

One positive change we’ve seen in recent years is the increase in the number of jurisdictions that now offer online filing portals, virtual or hybrid hearings, and more standardized documentation requirements, all of which have made the appeal process more accessible and predictable for both landlords and tenants.

How the Appeal Process Works

Property tax appeals follow a formal process that varies by jurisdiction, and while the general framework is consistent, the details can be surprisingly technical. Filing requirements, documentation standards, valuation methodologies, and hearing procedures differ from county to county, and even small missteps can delay or derail an appeal.

For tenants, especially those in triple‑net or modified‑gross leases, the challenge isn’t just understanding the rules but also navigating the gray areas where lease obligations, statutory definitions, and real‑world property performance intersect. And even when a tenant has a strong case, presenting it effectively requires a clear valuation strategy and familiarity with how local boards evaluate evidence.

If you’re questioning a recent assessment, facing rising pass‑through expenses, or simply want clarity on your options, Springline can help you determine the right next step — and guide you through every stage of the journey. Our team works with tenants and property owners across a wide range of industries, helping them understand their rights, evaluate whether an appeal is worthwhile, and manage the process from start to finish.may affect your specific circumstances or for assistance with tax planning under the new law.

TAGS: Tax Services Overview, Real Estate, SALT