The author is an attorney with the firm of Miller, Grimm & Associates, L.L.C. and is of counsel to Krassa, Kumli & Madsen, L.L.C., botfl in Boulder, Colo. His practice emphasizes real property taxation, real estate financing, commercial/ easing and sales, corporate structuring, mergers and acquisitions, asset protection planning and environmental law.
In the United States, the most common method of financing local government and public education is through the imposition of ad valorem taxes. Ad valorem means "according to value" and is a tax imposed in relation to the value of property. Simply put, a government entity estimates the value of real and personal property and assesses a tax based on the estimated value. At this point controversies arise. In a nutshelt the government assessor overvalues or mischaracterizes p roperty resulti ng in a higher than expected tax, ;1nd the owner challenges the assessor's decision through an administrative petition and appeal process. In most states this is an inefficient quasi-litigious process that costs local government and owners countless dollars in fees for attorneys, tax consultants, and real estate appraisers. The relatively new concept of using arbitration to resolve such disputes may be the answer to an escalating problent.