Income & Expense
Below is the cover letter and blank questionnaires sent to various types of businesses, in case additional copies are needed.
- Do I have to use the questionnaire provided, or can I submit information in a different format?
- Are you asking other businesses like mine for this information?
- Do you want information on my business income and expenses?
- Doesn't the Assessor's office already know how much land I have and how big my building is?
- I own and occupy the entire property for my own business. Do I need to fill out this form?
- I occupy a part of the property for my own use, but the rest is leased to others.
- You've asked about more than one parcel, but I account for the income and expenses as if the parcels were merged (for example, a building on one parcel and a parking lot or outbuildings on a second parcel)?
- How will the Assessor use this information?
- Is the information I provide confidential?
- What are the consequences if I don't return the forms?
No, you do not have to use the questionnaire provided. It is perfectly acceptable to submit the information requested in a format easier for you to produce (e.g., a report from your financial software such as a rent roll or financial statement would suffice). Please provide as much detail as possible on the items included in broad categories such as utilities (as shown on the form provided).
Yes. Almost all Scarborough commercial property owners have received or will receive this mailing, although the forms are customized depending on the type of property involved (e.g., Apartments, Commercial & Industrial, Golf Courses, Hotels, Skilled Nursing, etc.). Our goal is to make our valuations fair to all Scarborough property owners, by developing as complete a picture as possible of the income generated from, and expenses required for, Scarborough’s commercial properties. Your information will be compiled with others to generate an income approach to valuation of commercial properties that is reasonable and accurate for Scarborough.
The information requested is solely on income and expenses relating to the property, not the income and expenses of the business (or businesses) that may occupy the property (unless the two are inseparable, as is true for hotels, nursing homes/assisted living facilities, apartment rentals, etc.). If the property owner is the sole occupant of the property, please indicate this on the form and ignore the income-related questions. Please do provide information on expenses related to the property, such as maintenance, utilities, capital expenditures, management, etc.
Yes, generally, and if you don't have these details readily available, it is fine to skip these questions. In some circumstances (where multiple parcels are generally treated as one by the owner, or where there may be a discrepancy in the assessor's records) it is helpful to have you tell us the size of the land and the building(s) that are included in the information on the form. That way we can be sure we are analyzing the information correctly. If you'd like to look up the size of your building or the amount of land in your property, you can find information on your property in our online Vision database.
If your property is 100% owner-occupied, indicate on the form that the owner of the real estate and the owner of the business occupying the real estate are exactly the same; and that no lease exists and no rental payments are being made (including payment of the mortgage) by the business occupying the real estate. Please provide expense information as requested on the questionnaire.
When the properties are wholly owner-occupied, it is acceptable to provide the expense information requested for all of the properties together (i.e., it isn't necessary for you to allocate expenses to each specific parcel). If a breakout is available, it is certainly helpful, but it is not required. If the property, or a portion of the property(ies) are leased to others (i.e., a portion of a parking lot is leased to someone else, as well as being used by the property owner), please provide information on the income and expenses attributable to that lease, and indicate the area (sq. footage) covered by the lease(s).
Our goal is to collect information on income and expenses relating to property of different types and purposes throughout the Town, in order to develop an income approach to valuation that is accurate for the various types of commercial property in Scarborough. Your information is being used in combination with others to come up with estimates of typical income and expense per square foot of property for properties in the various neighborhoods throughout Scarborough. Even if your property is 100% owner-occupied, information on your expenses for the property you own will help us develop more accurate valuation methodologies for similar properties that are leased to others.
If you indicate on the form that the information contained on the form is confidential and proprietary to your business, it will be treated as such. Pursuant to M.R.S.A. Title 36 §706-A, it is up to the property owner, not the Assessor, to determine which information is proprietary, so you must tell us the information should be treated confidentially before we are able to do so.
Proprietary information is specifically defined in M.R.S.A. Title 36 §706-A as "information that is a trade secret or production, commercial or financial information the disclosure of which would impair the competitive position of the person submitting the information and would make available information not otherwise publicly available and information protected from disclosure by federal or state law, rules or regulations."
To ensure this information is not available to the public for inspection, you must clearly stamp or write “Proprietary and Confidential” on the completed questionnaire prior to submission. Alternatively, you could check the box [ X ] in the CONFIDENTIALITY AND SIGNATURE area indicating “The information on this form is confidential and proprietary information under Title 36 §706-A M.R.S.” Please Note: Any supplemental materials submitted should be labeled “Proprietary and Confidential.”
M.R.S.A. Title 36 §706-A requires property owners to respond to the Assessor's "...proper inquiries as to the nature, situation and value of the taxpayer's property," and explicitly allows queries about income and expenses associated with commercial properties. Failure to respond could bar your right to appeal the valuation of your property as of April 1, 2024, as determined in the 2024 update of property valuations. If you are unable to respond to the questionnaire, or feel it isn't applicable to your circumstances, please contact our office at (207) 730-4060 to discuss the matter with the Assessor.
In order to fairly assess your real property, information regarding income and expenses is required by the Assessor’s Office. Please note, this request is made pursuant to M.R.S.A. Title 36 §706-A. Section 706-A allows an assessor to make inquiries about the nature, situation, and value of a taxpayer’s property and provides that failure of a taxpayer to respond to such a request will bar the taxpayer’s right of appeal.
GENERAL INSTRUCTIONS: Complete this form for rented/leased commercial, retail, industrial, apartment, mixed use, skilled nursing, assisted living or independent living property. Identify the property and address. Provide annual information for the Calendar Year 2023.
NOTE: This request is for income and expense information relative to the operation of real estate and not the business use within the real estate. This Real Property information request is unrelated and distinct from business Personal Property asset declaration requests (i.e. Machinery, Equipment, Computers Furniture/Fixtures), that the Town mails to local businesses annually.
CONFIDENTIALITY: Pursuant to M.R.S.A. Title 36 §706-A, the information listed on the returned questionnaires will be kept confidential, if requested. To ensure this information is not available to the public for inspection, you must clearly stamp or write “Proprietary and Confidential” on the completed questionnaire prior to submission. Alternatively, you could check the box [ X ] in the CONFIDENTIALITY AND SIGNATURE area at the end of the questionnaire.
Please note: All supplemental materials submitted should be labeled “Proprietary and Confidential.”
USE/TYPE OF LEASED SPACE: For Apartments and Mixed Use & Commercial/Industrial Properties, under Section IV: Income Rent Roll for Calendar Year 2023, indicate USE the leased space is being used for (i.e., office, retail, warehouse, restaurant, garage, etc.)
PROPERTY EXPENSES & UTILITIES PAID BY OWNER OR TENANT: For Apartments, Mixed Use & Commercial and Industrial Properties, please indicate the property expenses and utilities the owner or tenant is responsible for.
HOW TO COMPLETE: Each questionnaire should reflect information for a single property for the year 2023. Note: If you own more than one rental property, a separate questionnaire for each property in the Town should be submitted.
WHO SHOULD COMPLETE: All individuals and businesses receiving this form should complete and
return it to the Assessor’s Office. If you believe you are not required to fill out this form, please call our office at (207) 730-4060 to discuss your special situation. All properties which are rented or leased, including commercial, retail, industrial and apartment properties, should complete and submit this form. The form should also be filled out and submitted even:
1. if a property is partially rented and partially owner-occupied; or
2. if you are 100% Owner-Occupied we still need a submission of your expense
information to aid in determining equitable values.
DUE DATE: Please return by Thursday, February 22nd, 2024:
By Mail: Assessor’s Office, Town of Scarborough, PO Box 360, Scarborough, ME 04070
In-Person: 259 U.S. Route 1, Room 125 (Lower Level), Scarborough, ME 04074
IMPORTANT: Please DO NOT EMAIL this form as we cannot ensure confidentiality of electronic submissions.
Days of operation: The number of days open for business within the calendar year.
Lease: This is a contract between a property owner (lessor/landlord) and the tenant (lessee). The lease sets forth the length of time the contract is to run, the amount to be paid by the lessee for the right to use the property, and other rights and obligations of the parties.
Leased area (square feet): This is usually the floor area that is occupied by the tenant. It is usually recorded on the lease in square footage.
Net: This references a net lease, where the lessee assumes payment of some of the property operating expenses, such as taxes, insurance, maintenance.
NN: This is an acronym for a double net lease. Tenant pays expenses related to taxes and insurance for the property.
NNN: This is an acronym for a triple net lease. Tenant pays all operating expenses related to the property.
TAW: This is an acronym for “tenant at will”. The agreement is usually on a month-to-month term and can be terminated by either the tenant or landlord at will.
Gross Monthly Income: Income before deductions for taxes, social security, saving plans, etc.
Net Cash Flow: Investment property that generates income after expenses such as principal, interest, taxes and insurance are subtracted.
Net Operating Income (NOI): From income producing property, the gross income minus the total of all expenses except for debt service. Cash flow is defined as NOI minus the total of all debt service payments.
Total Collection Loss: This indicates the total amount of revenues lost due to bad dept and collection losses for the calendar year.
Total Concessions: This indicates the total amount of revenue foregone through rent concessions (free rent) for the calendar year.
Total Other Income: This indicates the total amount of miscellaneous income not listed elsewhere derived from the property for the calendar year including laundry, vending machines, parking, etc.
Total Parking Income: This indicates the total amount of parking income collected from the property for the calendar year.
Total Potential Gross Income: This indicates the total amount of income that the property would have generated during the calendar year if all units or area are at full occupancy.
Vacancy and/or Collection Loss: This indicates the total amount of revenue loss based on vacancies or loss of income due to inability to collect payments in the calendar year.
Advertising: Expenses for online and direct mail advertising, print ads, promotional items, sponsorships, resident referral discounts, and related costs to obtain residents and promote the property in the market.
Assessed Value: The value established for property tax purposes.
Capital Expenditure: The cost of an improvement made to extend the useful life of a property or to add to its value, such as adding a room, parking lot replacement, renovations, etc. The cost of repairing a property is not a capital expenditure. Capital expenditures are appreciated over their useful life; repairs are subtracted from income for the current year.
Capital Improvement: Any structure or component erected as a permanent improvement to real property that adds to its value and useful life. (See Capital Expenditure).
Carrying Charges: Expenses necessary for holding property, such as taxes and interest on idle property or property under construction.
Cash Flow: The net operating income minus the total of all debt service payments. (See definition of "net operating income" below.)
Commissions: Amount paid for leasing fees and commissions to market property.
Deferred Maintenance: A type of physical depreciation due to lack of normal upkeep.
Equity: The value of the unencumbered interest in real estate as determined by subtracting the total of the unpaid mortgage balances plus the sum of any current liens against the property from the property's fair market value.
Free Rent: This is a rent concession in the form of free rent usually for a time period and determined at the beginning of the lease.
Gross Debt Service: The amount of money needed to pay principal, interest and taxes, and sometimes energy costs. If the dwelling unit is a condominium, all or a portion of common fees are excluded, depending on what expenses are covered.
Gross Lease: A gross lease is when the lessor or landlord is responsible for all property operating expenses such as real estate taxes, maintenance, utilities, etc.
Ground Lease: one that rents the land only.
Improvements: additions to raw land such as buildings, streets, sewers, etc. that increase the value of the property.
Insurance: Fixed expense of the property's annual insurance premium for replacement in case of fire or other property loss.
Legal and accounting fees: Fees associated with bookkeeping, attorneys, and accountants for services related to the business.
Maintenance: Expenses including janitorial services, including window and carpet cleaning; HVAC, plumbing, and electrical systems maintenance fees; ongoing upkeep of common area grounds keeping/landscaping; costs for lighting and security systems; snow removal; trash removal, contracted services; and real and personal property maintenance fees.
Management Fee: Agency fee paid by owner to a management company to oversee day-to-day operation of the property.
Monthly Rent: Indicates the monthly rent for leased areas as of January 1 of the reported year.
Other Expense: Expenses that do not easily fall within an existing expense category.
Payroll and benefits: Expenses including wages, salaries, benefits, payroll taxes and related worker's compensation expenses for the staff needed to operate the property.
Percentage Rent: A lease that provides for rent based on a percentage of business income or retail sales level.
Real Estate Taxes: Amount paid for property taxes.
Repairs: Expenses including costs for incidental repairs, flooring repairs, and costs for keeping the property in operating condition.
Supplies: Cost of non-incidental materials and items, such as office and cleaning supplies.
Reserves for Replacement: This is an allowance (or reserve) in the annual operating statement to provide for replacement of short-lived items that will not last for the remaining economic life of a property.
Utilities: Expenses including gas, oil, electricity, water, and sewer.
Use: Examples of uses include business activities such as retail, restaurant, office, warehouse, manufacturing, etc.