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Bernalillo County Assessor Damian Lara has responded to a class action lawsuit filed against him last week, saying Tuesday it is a result of attorney misrepresentation and incomplete filings from property owners.

The lawsuit was led by two sa国际传媒官网网页入口 homeowners who accused Lara of imposing unlawful property tax valuation increases larger than the for residential property set by state law after transferring their homes into revocable living trusts.

Lara鈥檚 response to the lawsuit comes as the 2nd Judicial District Court issued its first action in the case. The court held a virtual hearing regarding the temporary restraining order that attorneys Amber Fayerberg and Christopher Dodd filed last week, seeking to halt delinquent tax penalties against the plaintiffs, which began Dec. 10.

The court issued the temporary order, preventing Lara and the county from collecting unpaid taxes from plaintiff Edward Roberts. Roberts chose not to pay the first half of alleged unlawful taxes, while former Bernalillo County District Attorney Kari Brandenburg, also a plaintiff, has already paid the first half of her taxes and is seeking a refund.

Court documents show that nearly 400 homeowners also saw tax spikes larger than 3% after transferring their properties into a revocable trust 鈥� an estate planning tool often used to help people avoid the probate process.

Lara said the class action lawsuit was the result of misrepresentation by sa国际传媒官网网页入口 attorney David Finlayson, who helped 96 homeowners file their trust transfer deeds and subsequently submitted an informal protest on their behalf when they also experienced tax spikes.

鈥淲e just need to know and be able to identify that it is a revocable trust and who the beneficiaries of that trust are,鈥� Lara said. 鈥淭hey didn鈥檛 know, like this attorney, that they needed to put that information in.鈥� 

According to state statute, a change in ownership can trigger property tax valuation increases larger than the 3% cap, but it does not consider a transfer into a revocable trust a change in ownership 鈥� making the transfer subject to the 3% cap.

However, the statute specifies that such a transfer is subject to the cap when the beneficiary, if any, is listed as the transferor, the transferor鈥檚 spouse or the transferor鈥檚 child.

If another person is listed as a beneficiary, then the transfer is considered a change in ownership and the cap is removed, Lara said. 

Many of the trust filings the county received before distributing valuations this year were incomplete, Lara said, and property owners referenced in the class action lawsuit lost the 3% cap because their trust filings did not clearly identify the required beneficiaries. 

Fayerberg, the sa国际传媒官网网页入口 attorney who鈥檚 representing the homeowners in the lawsuit against the assessor, said incomplete filings were not the case for the two plaintiffs, whose trust filings listed the required beneficiaries.

鈥淏oth are compliant, so that鈥檚 incorrect鈥� and it certainly doesn鈥檛 apply to any of the documents that I鈥檝e seen,鈥� Fayerberg said.

Finlayson said the filings he helped with also named the required beneficiaries, but Lara asserted that many did not.

鈥淎pproximately 2,000 properties in Bernalillo County were transferred to a revocable trust in 2024,鈥� Lara said. 鈥淥f those, only those property owners represented by one attorney continue to have issues.鈥�

Lara said roughly 400 of the 2,000 properties transferred into trusts saw tax valuation increases of more than 3%, and that many of those cases have been resolved 鈥� including many of the 96 represented by Finlayson.

鈥淚 might be 100 of the 400, but that means there's still 300 other people out there,鈥� said Finlayson, who鈥檚 been practicing in estate planning for more than 32 years. 鈥淚t's not about me and the assessor 鈥� it's about doing what's right for the property owners. 

鈥淚t was mildly offensive for him to say that I don't know what I'm doing, but 鈥� to me, it's not personal. It's a function of (him) creating a statutory requirement that isn't there.鈥�

Another factor at the heart of the disagreement between the attorneys, homeowners and the assessor is who should bear the responsibility of determining that a trust transfer qualifies for the 3% cap.

If the beneficiary is not included or made clear on transfer documents, the county automatically removes the cap, Lara said.

If the trust document does qualify, it is then up to the property owner to provide information that proves so, with help from the assessor鈥檚 office if needed, Lara said.

鈥淎ssessor Lara is approaching these transfers with the presumption 鈥� contrary to statute 鈥� that they are not eligible for the exception and then creating a burden that doesn鈥檛 exist in the law for the resident to come forward and prove that they are,鈥� Fayerberg said.

But Lara said placing the bulk of the responsibility on homeowners is nothing new. New Mexico is a self-rendering state, meaning property taxes are the personal obligation of a property owner, state says.

Lara said the county tries to make rendering information as easy as possible but that ultimately it is the county鈥檚 responsibility to evaluate all properties equally and fairly, and the property owner鈥檚 responsibility to let the county know when it gets something wrong.

鈥淲hether you鈥檙e a wealthy property owner or a sophisticated politician or attorney, everybody is treated the same,鈥� Lara said. 鈥淭he 3% cap is meant to keep people in their homes; it鈥檚 not meant to allow sophisticated and wealthy people to have tax evasion of property taxes.鈥�

Kylie Garcia  covers retail and real estate for the sa国际传媒官网网页入口. You can reach her at kgarcia@abqjournal.com.