Answers to Your Frequently Asked Questions

1. Should I pay the real property taxes assessed against the improvements to my leasehold property located on Pensacola Beach?

We continue to be advised by our attorneys at Shell, Fleming, Davis & Menge not to pay the real property taxes. This advice is based on the uncertainties related to refund procedures in the event the court rules in our favor.

A stay has been granted in the 2004 and 2005 tax years suspending all procedures for the collection of the contested taxes pending final disposition of the lawsuits. In the 2006 and 2007 cases, a stay order was not requested because Florida Statute 194.171(3) provides for an automatic stay. Plaintiffs in these cases are not obligated to pay the taxes in question until the courts have made a final disposition in this matter.

The downside is if the court rules the real property taxes to be valid and payable, the leaseholder who has not paid taxes will not obtain the discounts otherwise available for early payment and will be required to pay interest at 12% simple (not compounded) interest per year as established in Florida Statute 194.192(2).

It has also come to our attention that plaintiffs who have attempted to pay taxes from prior years are being assessed 18% annual interest by the Tax Collector’s Office. That office is using the delinquent tax interest rate of 18% because an order to pay the taxes has not been issued by any court. Unfortunately, there is no legal authority for us to insist on a lower rate if you decide to pay taxes before the lawsuits come to a final end. The 12% interest rate will be all that can be charged in the event that a ruling goes against us.

2. What can I do if my mortgage company pays the tax or notifies me that I must pay it?

The right of a lender to pay the tax or require the leaseholder to pay the tax is governed by each leaseholder’s individual mortgage. If a dispute arises in this regard, it would be between the individual leaseholder and the mortgage company and outside the scope of Shell, Fleming, Davis and Menge’s representation of the whole group in the tax challenge. As a public service, the law firm provided a memorandum dated May 20, 2005 that includes a number of attachments to educate the mortgage company on the nature of the litigation we are involved in. This memorandum and attachments (8 pages), copies of the 2004 and 2005 orders on the motion for stay (2 pages each), and Fla. Stat. 194.171(3) (1 page) have proven useful for a number of plaintiffs in dealing with their lenders. These documents can be printed through the following link :

Documentation Related to Collection of Contested Taxes

3. I was a plaintiff in the 2004 complaint but my name does not appear for 2005 or 2006. Why not and what do I need to do to be included in the 2008 plaintiff list?

Any plaintiff in the initial 2004 lawsuit with a $0 assessment for any subsequent tax year can not be named in the complaint filed for that particular subsequent year. This has occurred typically because of damage from Hurricanes Ivan and Dennis. This does not affect participation in the 2004 case. We have been returning plaintiff’s names to the later lawsuits for years when taxes are assessed again, as long as the leaseholders name(s) remain(s) recognizable from prior years.