Protecting Landlord Rights In GSA Real Estate Tax Offsets

The United States General Services Administration serves as the procurement arm of the federal government. Among many of the functions of the GSA, one is to secure lease agreements with office space owners and landowners throughout the country. Roughly half of all federal employees work in leased space. The government also leases land for a variety of purposes, including antenna sites.

GSA Reviews Of Past Government Reimbursements For Real Estate Taxes

In recent years, the GSA has increased its vigor in seeking to control costs through the use of real estate tax consultants who are hired to review past real estate tax reimbursements to determine whether the payment can be recast as a special assessment or a charge for services instead of a real estate tax.

The standard GSA lease does not provide reimbursements for special assessments. The tax consultants frequently find a way to recast a past reimbursement as an assessment. The GSA uses setoffs as credits against rent to recoup the alleged overpayment. The tax consultants are given a portion of any recovery they can obtain, giving them a significant incentive to find a way to recast a tax as an assessment.

Issues With The GSAs Procedure May Violate Your Rights

The tax adjustment clause in a GSA lease and federal law requires the government to formally asset a claim before withholding rent as a setoff. The contracting officer must issue a final decision, providing the lessor with notice of the right to appeal the setoff. This does not always happen, leaving a lessor with no opportunity for recourse.

Many lessors are blind-sided with these setoffs, with little or no advance notice. The GSA has been sending a letter, an email or simply withholding rent based upon the tax consultant's opinion that a prior reimbursement was mistakenly paid to cover a special assessment and not an authorized real estate tax reimbursement. The failure of the government to provide the opportunity for administrative or judicial review is essentially a breach of contract and a violation of the law.

Curran Legal Services Group, Inc., represents landlords in federal contract and lease matters nationwide. If you are leasing space or land to the federal government and are facing a tax reconciliation, it is critical for you to work with an experienced federal contract lawyer to protect your rights. Several important issues must be carefully evaluated. The distinctions between what may be characterized as a tax and a special assessment remain largely undefined.

Talk To A Lawyer With 20 Years Of Experience In Government Contract Law

In situations where an offset is appropriate under the law, Curran Legal can negotiate with the government to seek an appropriate schedule and duration for the government to recoup a mistakenly paid reimbursement. The GSA has sought significant offsets that can devastate a lessor's ability to continue to service a mortgage or other debts. Attorney Diana Curran is a former in-house lawyer for the GSA who has effectively served clients in the private sector since 2006.

To learn more about tax reconciliation and your rights, contact Curran Legal online or call 404-955-8903. The firm is based in Johns Creek, Georgia, keeping overhead low and has a nationwide reach. The initial consultation is always complimentary.