Court Finds Tax Appeal Attorneys Not Engaged in Appraisal Practice

The Circuit Court of Cook County, Illinois (Chancery Division) on June 20 ruled that attorneys who referenced comparable property valuations and market values based on an income approach as part of tax appeal proceedings were simply engaged in the traditional practice of law and not in appraisal practice.

 

The case, Illinois State Bar Association vs. Illinois Department of Financial and Professional Regulation, was filed in July 2017 after two Illinois attorneys were accused by the IDFPR of engaging in unlicensed appraisal practice after they submitted comparable property valuations, income approach information and market value opinions as part of two tax assessment appeals in DuPage County and McHenry County. 

 

ISBA filed a complaint seeking a declaration that the IDFPR lacked authority to prosecute, discipline or sanction lawyers for engaging in the practice of law for advocating on behalf of clients in real estate tax assessment proceedings. The case also sought to enjoin the IDFPR from initiating, maintaining or threatening prosecution of attorneys for engaging in that activity.

 

The main question before the court was whether an attorney representing a client in a tax proceeding violated the state’s Appraisal Act and functioned as an unlicensed appraiser when providing an analysis of comparable property valuations or developing an opinion of market value utilizing the income approach in a legal brief supporting a tax appeal. 

 

ISBA issued a statement when it filed suit noting, “Arguments based on property valuation are common in many legal fields and have long been typical of real estate tax assessment practice. The ISBA believes that making such arguments on behalf of clients clearly constitutes the practice of law, does not entail the submission of an appraisal, and is well beyond the authority of the IDFPR to regulate.”