Six years on, and California courts are still addressing legal issues caused by the COVID-19 Pandemic. Most recently, the Fourth District Court of Appeals has ruled in The Retail Property Trust v. Orange County Assessment (County of Orange), 2026 S.O.S. 1025, that the COVID-19 Pandemic did not cause “destruction” of a building such the owner was entitled to a reassessment of their property taxes due to a significant decline in value.
Revenue and Taxation Code §170(a)(1) allows a property owner to seek reassessment of their property value when the property is damaged or destroyed. The statute generally defines “damage” as a diminution in value as a result of restricted access to the property where that restricted access was caused by the major misfortune or calamity.
The Plaintiff, an owner of a 40-acre shopping mall in Brea, claimed that the property was “damaged” when the value collapsed due to substantial restrictions on access caused by the COVID-19 virus and the related emergency orders signed by Governor Gavin Newsom and filed suit. The building was closed for over 100 days and thereafter faced significant obstacles to re-opening post-pandemic. The owner filed a request for reassessment with the County of Orange, which was denied. Thereafter, the Orange County Superior Court upheld the denial, and the property owner appealed.
The Appeals Court upheld the denial of the reassessment and rejected the property owner’s claims finding that neither the State’s governmental orders restricting access to the property due to Pandemic, nor the virus itself equal physical “damage” to the property and thus fail to establish eligibility for reassessment under the Revenue and Taxation Code. In the absence of physical damage, there can be no entitlement to reassessment under the Code.
This case follows a long line of post COVID-19 decisions in which the California courts have largely rejected both insurance and financial claims related to the Pandemic. Our courts have been reluctant over the years to create civil liability against insurers and the government for financial losses resulting from a global pandemic and plaintiffs have faced an uphill climb. This decision confirms that this trend is likely to continue as the courts resolve the last outstanding Pandemic cases.