The Silver Creek Association, et al. v. Matthew Irby

Marlinton, West Virginia real property lawyers represented condominium owners property tax assessments on their units.

The Lodge at Silver Creek ("Lodge") on Snowshoe Mountain in Pocahontas County, West Virginia, is a condominium building containing 239 residential units, eight commercial units, and common elements.[2] The Lodge is a common interest community subject to the Uniform Act, and the Association is the common interest community's unit owners' association under the Uniform Act. Approximately ten percent of the Lodge's residential units are used by their owners exclusively for their own residential purposes and not held out for rental to third-party guests. Petitioner Owners are among this group of unit owners who do not hold their condominium units out for rent to third-party guests.



For property tax purposes, the units in the Lodge that are held for rental to third-party guests have been and continue to be considered Class III properties because their owners are not individuals who own, use, and occupy their units exclusively for their own residential purposes. However, prior to the events discussed below, the Petitioner Owners' units were classified as Class II properties as they were not rented and were owned, used, and occupied exclusively for Petitioner Owners' own residential purposes. This case concerns the classification, assessment, and taxation of the Petitioner Owners' units because a portion of the Lodge, which recently became a part of the Lodge's common elements, was used to operate a commercial bar and grill called "The Locker Room" open to the public, generally.



The Association litigated with Snowshoe Mountain Inc. ("Snowshoe") concerning the ownership of a commercial area in the Lodge now used as The Locker Room (the "Commercial Space"). Snowshoe claimed that the Commercial Space was not a part of the common interest community but was rather owned separately by Snowshoe outside the scope of the common interest community. Snowshoe and the Association reached a settlement in 2016 pursuant to which Snowshoe transferred the Commercial Space to the Association and the Commercial Space was expressly included as common interest community property owned by the Association in a restated declaration. Prior to the settlement, the Commercial Space was, for ad valorem tax purposes, separately classified, assessed, and billed to Snowshoe.



After the settlement, the Pocahontas County Assessor classified, assessed, and billed the Association separately for the Commercial Space. However, on February 14, 2018, the Association and the Pocahontas County Assessor jointly requested a property tax ruling from the Tax Commissioner pursuant to West Virginia Code § 11-3-24a (2010) concerning whether the Commercial Space should be classified, assessed, and billed to the Association or to the unit owners. The Tax Commissioner issued Property Tax Ruling 18-49 on February 26, 2018, finding that the Association was a successor declarant of the condominium and that the Association should be taxed separately for the Commercial Space, which the Tax Commissioner considered a condominium unit. The Association appealed Property Tax Ruling 18-49 to circuit court.



On January 4, 2019, the Circuit Court of Pocahontas County reversed Property Tax Ruling 18-49 and found that the Association was not a successor declarant under the Uniform Act, and that the Commercial Space was not a unit but instead the Commercial Space constituted a common element of the common interest community that, pursuant to West Virginia Code § 36B-1-105(b)(2) (1986), could not be classified, assessed, and billed separately to the Association.



The Silver Creek Ass'n v. Irby, 23-ICA-372 (W. Va. ICA Nov 14, 2024)

Reversed