If a Lake Chesdin landowner builds a boat pier on land owned by the Appomattox River Water Authority under a permit agreement, who has to pay real estate taxes on the pier?

Plain-English summary

Lake Chesdin forms the northern border of Dinwiddie County. The Appomattox River Water Authority (ARWA), a political subdivision, owns the lake and the lakebed up to the 164-foot contour. ARWA lets adjacent property owners build boat piers below that contour under a Construction and Use Permit Agreement. A Lake Chesdin homeowner did that, and the county Commissioner of the Revenue, Lori Stevens, assessed the pier as real property and taxed the homeowner. The homeowner objected, arguing that because the underlying land belongs to ARWA, ARWA (which is exempt from taxation as a political subdivision) should be the owner for tax purposes, not him.

Acting AG William Mims sided with the Commissioner. Two pieces of the analysis combined:

First, the permit agreement is explicit. Paragraph 8 of ARWA's standard form provides that "[a]ll structures erected by you on [ARWA] property shall constitute structures appurtenant to your real property. You shall be exclusively responsible for their maintenance, proper repair and upkeep." Paragraph 9 forbids selling the pier separately from the adjoining property and requires a successor purchaser to enter a new agreement with ARWA. "Appurtenant" means annexed to a more important thing. By agreeing to the permit, the homeowner accepted that the pier is an appurtenance of his own property, not of ARWA's.

Second, § 58.1-3282 explicitly addresses split-ownership situations. It provides that "[w]hen a public service corporation or a political subdivision of the Commonwealth does not own both a tract, piece or parcel of land and the improvements thereon, including leasehold improvements owned by the lessee which are to be removed by the lessee at the end of the lease term, the land and such improvements may be assessed separately." The AG concluded that the statute unambiguously authorizes the result the Commissioner reached: where the political subdivision owns the land but not the improvement, the improvement can be assessed separately to its private owner.

The combined effect is straightforward. The pier is the homeowner's improvement, attached to ARWA's land but appurtenant to the homeowner's property. The county can assess and tax the pier as a separate improvement of the homeowner.

Currency note

This opinion was issued in 2009. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

Virginia's real-property assessment scheme generally taxes the owner of the property in question. The default rule of fixture law would deem an improvement attached to land to belong to the landowner, with limited exceptions for trade fixtures and certain leasehold improvements. Section 58.1-3282 provides a statutory carve-out for the specific situation where a public-service corporation or political subdivision owns the land but does not own the improvements. In that case, the land and improvements may be assessed separately, ensuring that the privately owned improvement does not get a free ride on the public landowner's tax-exempt status.

The opinion analyzes the statute as unambiguous, applying the standard Virginia rule that statutory construction begins (and often ends) with plain meaning when the text is clear. The permit agreement language about "appurtenant" structures supplied the factual hook for treating the pier as the homeowner's improvement, even though it physically attaches to ARWA's land.

The opinion is fact-specific. It hinges on the existence of a permit agreement that expressly characterizes the pier as appurtenant to the homeowner's property. A different agreement structure (for example, one that vested ownership of the structure in the public entity, or treated the structure as part of a leasehold to be removed at lease end) would have produced a different analysis.

Common questions

Why isn't the pier assessed to ARWA, since ARWA owns the land?

Section 58.1-3282 permits separate assessment of land and improvements when a political subdivision owns the land but does not own the improvements. The permit agreement makes clear that the homeowner owns the pier (it's "appurtenant to" his real property, sold with the property, removable at his expense). So ARWA is the landowner, but the homeowner is the improvement owner, and the county can tax each on what each owns.

Could the homeowner avoid the tax by donating the pier to ARWA?

The opinion does not analyze that hypothetical. Whether ARWA would accept ownership of every pier built by every Lake Chesdin homeowner under its permit agreements is a separate question, and the agreement's appurtenance language would have to be modified for the analysis to change. As written, the agreement deliberately vests ownership in the homeowner.

Does this apply to any leased improvement on government land?

It applies to the specific factual setup the opinion describes: a private structure on land owned by a political subdivision, where the agreement assigns ownership of the structure to the private party. Section 58.1-3282 explicitly contemplates "leasehold improvements owned by the lessee which are to be removed by the lessee at the end of the lease term" as a covered category. Other arrangements (an improvement actually owned by the government, an improvement held as a gift to the public, an easement situation) would require their own analysis.

Is the pier taxed at the same rate as the adjoining homeowner's land?

The opinion says the pier "may be assessed and taxed separately from the adjoining land." The mechanics of assessment, applicable tax rate, and any pier-specific valuation methodology are matters for the Commissioner of the Revenue and assessor to apply under the locality's real-estate tax framework. The opinion does not prescribe a valuation method.

Does ARWA pay any tax on the underlying lakebed land?

ARWA, as a political subdivision, generally would not pay real-property tax on the land it owns. The opinion does not opine on ARWA's tax status, but the entire point of § 58.1-3282 is to ensure that the privately owned improvement does not slip into the public landowner's exemption.

Citations

• Va. Code Ann. § 58.1-3282 (separate assessment of land and improvements when political subdivision does not own both)
• Brown v. Lukhard, 229 Va. 316, 330 S.E.2d 84 (1985) (plain meaning of clear statutes)
• Winston v. City of Richmond, 196 Va. 403, 83 S.E.2d 728 (1954) (statutory construction lies within the domain of ambiguity)
• Supinger v. Stakes, 255 Va. 198, 495 S.E.2d 813 (1998) (ambiguity defined)
• Black's Law Dictionary 118 (9th ed. 2009) (defining "appurtenant")

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2009/09-042-Stevens.pdf

Original opinion text

COMMONWEALTH OF VIRGINIA
Office of the Attorney General
William C. Mims, Attorney General

August 27, 2009

The Honorable Lori K. Stevens
Dinwiddie County Commissioner of the Revenue
P.O. Box 104
Dinwiddie, Virginia 23841

Dear Ms. Stevens:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented

You inquire concerning ownership for purposes of real property taxation of a boat pier constructed by a private land owner on land owned by a political subdivision. Further, should the private landowner be determined to be the owner of the boat pier for purposes of real property taxation, you ask whether the pier may be assessed and taxed separately from the adjoining land of such private landowner.

Response

It is my opinion, based on the facts you present[1], that a private landowner who constructs a boat pier on land owned by a political subdivision is the owner for purposes of real property taxation. Further, it is my opinion that the pier may be assessed and taxed separately from the adjoining land of such private landowner.

Background

You advise that Lake Chesdin constitutes the northern boundary of Dinwiddie County. The Lake is owned by the Appomattox River Water Authority ("ARWA"), a political subdivision of the Commonwealth of Virginia, to the 164th degree contour of the body of water.

You note that ARWA provides a construction and use permit agreement that allows for the construction and use of certain types of facilities on ARWA-owned property. You relate that a taxpayer living in the Lake Chesdin area entered into an agreement with ARWA to construct a boat pier. Further, you state that the boat pier is attached to the property located below the 164th degree contour, which is wholly owned by ARWA. You relate that your office has assessed the pier as real property, and the taxes on the pier are assessed against the taxpayer. You consider the taxpayer to be the owner of the boat pier since you interpret the agreement between the taxpayer and ARWA as a lease for the pier as contemplated by § 58.1-3282. However, the taxpayer contends that since the property on which the pier is located is wholly owned by ARWA, he should not be assessed for the real estate taxes on the structure.

You provide a copy of a "Construction and Use Permit Agreement" that outlines the agreement between the taxpayer and ARWA (the "Agreement"), which provides, in part, that:

8. All structures erected by you on [ARWA] property shall constitute structures appurtenant to your real property. You shall be exclusively responsible for their maintenance, proper repair and upkeep....

9. The structure constructed pursuant to this agreement, shall not be sold separate from the real property to which it is appurtenant. In the event your property is sold, the purchaser shall assume in writing, all conditions and responsibilities of this agreement. This will be done by the purchaser completing a new agreement with [ARWA]. In the event a subsequent purchaser should not accept the terms of this agreement, [ARWA] may elect to remove any structure erected pursuant to this agreement, and/or restore [ARWA] property to its approximate original condition at your expense.

Applicable Law and Discussion

Section 58.1-3282 provides that:

When a public service corporation or a political subdivision of the Commonwealth does not own both a tract, piece or parcel of land and the improvements thereon, including leasehold improvements owned by the lessee which are to be removed by the lessee at the end of the lease term, the land and such improvements may be assessed separately.

Statutory language is ambiguous when it may be understood in more than one way.[2] An ambiguity also exists when statutory language lacks clarity and precision, or is difficult to comprehend.[3] "The province of [statutory] construction lies wholly within the domain of ambiguity, and that which is plain needs no interpretation."[4] But when statutory language is "clear and unambiguous," "the plain meaning and intent of the enactment will be given to it."[5] It is my opinion that § 58.1-3282 is free of any ambiguity. The General Assembly unambiguously provides that when a political subdivision does not own both a tract of land and the improvements on that tract of land, the improvements may be separately assessed. Furthermore, the Agreement with ARWA clearly provides that any structure erected by the taxpayer on ARWA property "shall constitute structures appurtenant to [the taxpayer's] property." The term "appurtenant" is commonly understood to mean "[a]nnexed to a more important thing."[6] Therefore, under the terms of the Agreement, the taxpayer has voluntarily agreed that the boat pier is annexed to his property.

Conclusion

Accordingly, it is my opinion, based on the facts you present[7], that a private landowner who constructs a boat pier on land owned by a political subdivision is the owner for purposes of real property taxation. Further, it is my opinion that the pier may be assessed and taxed separately from the adjoining land of such private landowner.

Thank you for letting me be of service to you.

Sincerely,

William C. Mims

1. See infra "Background."
2. Supinger v. Stakes, 255 Va. 198, 205, 495 S.E.2d 813, 817 (1998); Va.-Am. Water Co. v. Prince William County Serv. Auth., 246 Va. 509, 514, 436 S.E.2d 618, 621 (1993); Va. Dep't of Labor & Indus. v. Westmoreland Coal Co., 233 Va. 97, 101, 353 S.E.2d 758, 762 (1987).
3. Supinger, 255 Va. at 205, 495 S.E.2d at 817; Lee-Warren v. Sch. Bd., 241 Va. 442, 445, 403 S.E.2d 691, 692 (1991).
4. Winston v. City of Richmond, 196 Va. 403, 408, 83 S.E.2d 728, 731 (1954).
5. Brown v. Lukhard, 229 Va. 316, 321, 330 S.E.2d 84, 87 (1985).
6. BLACK'S LAW DICTIONARY 118 (9th ed. 2009).
7. See supra "Background."