The Evaluator - California Appeals Court Denies Property Tax Relief to Mall Owner Alleging Hardships From COVID-19 Restrictions
This article appeared in the June 2026 edition of The Evaluator.
The Retail Prop. Tr. v. Orange Cty. Assessment Appeals Bd. No. 1, 119 Cal. App. 5th 1177, 343 Cal. Rptr. 3d 327 (2026).
In a recent decision, California’s Fourth District Court of Appeals affirmed a holding that a shopping mall owner was not entitled to property tax relief despite alleged hardships faced due to the COVID-19 pandemic and its related restrictions. The Court held that because the mandated closures and other restrictions did not physically affect the mall, the owner was not entitled to a reduction in value.
The California legislature has authorized local taxing authorities to provide calamity reassessments to eligible properties, including those that have been damaged or destroyed by a “major misfortune or calamity.” Damage is specifically defined to include “diminution in the value of property as a result of restricted access to the property where that restricted access was caused by the major misfortune or calamity.”
The mall owner filed for calamity reassessments after the mall was ordered to close for more than 100 days during the COVID-19 pandemic. Upon reopening, the mall remained subject to significant restrictions and faced access, operations and occupancy issues. The owner alleged in the calamity reassessment applications that the pandemic had diminished the value of the mall. The County Assessor denied relief on the grounds that the property was not physically damaged.
The Court agreed with the Assessor and held that the calamity reassessments require damage to the property, or physical damage to another property that indirectly diminishes the value of the subject property (such as destruction of a road or bridge leading to the subject mall). Even though the mall may have lost value due to restrictions placed by the Governor, the restrictions did not manifest into physical damage to the property. This holding affirms that economic harm alone will not be enough to entitle a property to disaster tax relief in the state of California. There must be a showing of physical damage, direct or indirect, to the property itself.
