4 commercial property tax tips for Q4 peak season

With 65% of commercial property tax deadlines occurring between October and January, it’s no wonder some servicers dread going into Q4. As payment deadlines loom large, the spike in volume introduces more opportunities for errors and increased risk.

Incorrect escrow designations, incomplete parcel information, and delayed or inaccurate payments can all lead to inefficiency, decreased productivity and financial penalties.

Success in Q4 requires prepping all year long, but here are four timely tips you can implement in Q3 that will improve productivity and reduce risk during the end-of-year tax crunch.

Tip #1: Validate your portfolio before peak season begins

The sheer volume of activity during peak tax season is unavoidable, but inaccurate information is a culprit that is avoidable. Priority one is validating portfolio information including parcel identification, taxing agencies, payment due dates and escrow designations. Making sure these details are accurate and that tax lines are set up correctly in your system on the front end will save countless hours of extra work on the back end.

While the entire portfolio should be reviewed, new portfolios and recently onboarded properties require the most attention. For instance, it’s somewhat common that a property’s escrow or non-escrow status will show conflicting designations in different documents. These should be identified and reconciled in advance of Q4.

Parcels can also be misidentified because of the wrong county or confused with another parcel because of similar parcel numbers. There can be split parcels that touch multiple agencies, adding to the confusion. These are simple errors that should be rectified before an incorrect payment is made resulting in a penalty or requiring a drawn-out refund process.

Tip #2: Confirm tax payment amounts and verify payments  

Now is also the time to confirm payment amounts, agency-specific payment procedures and due dates. Some taxing authorities, like Florida, release this information well ahead of deadlines, while others don’t confirm amounts until closer to the deadline.

With more than 22,000 taxing authorities across the U.S., understanding the timing cadence for payments as well as payment deadlines and procedures for each one is daunting. Cotality’s™ Commercial Tax Portal was designed to remove the complexity of property tax specifics by providing all relevant information in a single platform with an easy-to-navigate dashboard.

Also critically important is verifying that payments have been posted correctly and identifying unpaid taxes before the final payment deadline. For loans that are not set up with escrow, Cotality provides tax payment verification to highlight delinquencies before they become more serious problems.

Tip #3: Make training a priority  

The tax payment process isn’t static: technology, agency deadlines, and payment preferences and staffing priorities can change year to year.

Making sure everyone is properly trained on current procedures well in advance will yield significant benefits during the Q4 rush. From basics like confirming correct logins and access to servicing platforms, to more advanced training on how to make payments and who can approve funding, dedicating the time to train your team will make for a smooth Q4. Uncertainly around workflows, forgotten passwords or expired user credentials may seem like things that can be addressed when problems arise, but that procrastination can cause frustrating, and avoidable, delays.  

Because ongoing training of human teams is just as important as keeping your technology updated, the Commercial Tax Portal was designed with an AI module that offers self-guided training tutorials. In-person training is still an invaluable resource, but having an AI-driven tool to walk users through a particular scenario saves significant time.  

Tip #4: Stress test your systems

Make plans to test your systems before your systems get truly tested during peak volume. Inefficient workflows and batch processing constraints may only become apparent when dealing with heavy workloads, so testing in a non-live environment is critical before live production takes place. Particularly for portfolios that have grown or when new technology or servicing platforms have been introduced, stress-testing first will avoid costly delays when it matters most.

Preparation is key to risk mitigation

Automation and digital-first solutions in commercial property tax servicing means there is less room for error at a time when tax bills continue to rise and agencies are enforcing stricter deadlines. Early preparation and implementing these best practices now will help reduce risk, improve efficiency and ensure your team is successful during tax crunch season.

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