In The Retail Property Trust v. Orange County Assessment Appeals Board No. 1, the California Fourth District Court of Appeal affirmed the denial of property tax disaster relief to the owner of the Brea Mall, holding that neither COVID-19-related closure orders nor the virus itself constitute the “physical damage” required for calamity reassessment under Revenue and Taxation Code section 170(a)(1).

The property owner, The Retail Property Trust (the “Trust”), owns the Brea Mall, an enclosed shopping mall in Orange County. After the governor declared a statewide emergency on March 4, 2020, the property was closed to the public for more than 100 days and remained subject to significant access and occupancy restrictions even after partial reopening.

In March 2021, the Trust filed Calamity Applications with the Orange County tax assessor under Revenue and Taxation Code section 170(a)(1), seeking reassessment on the grounds that the pandemic diminished the property’s value. That statute, which implements article XIII, section 15 of the California Constitution, permits reassessment when property is “damaged or destroyed” by a “major misfortune or calamity” in a governor-proclaimed disaster area, and defines “damage” to include “a diminution in the value of property as a result of restricted access” caused by the calamity.

The Trust argued both prerequisites were met: the pandemic was a qualifying calamity, and its property was “damaged” by diminished value due to restricted access. The assessor denied the applications for lack of physical damage, the Assessment Appeals Board upheld the denial, and the trial court ruled the Trust was not entitled to relief as a matter of law. The Trust appealed.

The Court of Appeal disagreed. Although section 170(a)(1) defines “damage” to include value diminution from restricted access, the court emphasized that article XIII, section 15 of the California Constitution limits reassessment to property that is “physically damaged or destroyed” – and the statute must be construed consistently with that constitutional requirement. Relying on Slocum v. State Board of Equalization (2005) 134 Cal.App.4th 969, which struck down a Board of Equalization regulation that extended disaster relief to airlines after September 11, 2001 without requiring physical damage, the court held that section 170(a)(1) provides only limited relief for “indirect physical damage” – such as when physical damage to a nearby road or bridge restricts access to otherwise undamaged property.

Applying Slocum, the court held that “neither governmental orders restricting access to property due to the COVID-19 virus nor the virus itself equate to physical harm to property – either direct or indirect.” The court also rejected the Trust’s contention that requiring physical damage would produce an “arbitrary and nonsensical” result, noting that section 170(a)(1) contemplates scenarios where physical damage to other property restricts access to the taxpayer’s undamaged property.

This decision reinforces that California’s property tax calamity relief under section 170(a)(1) requires physical damage – whether direct or indirect (e.g., physical damage to nearby infrastructure restricting access). Government-mandated closures and pandemic-related economic losses alone may not qualify.

The Retail Property Trust v. Orange County Assessment Appeals Board No. 1, No. G064887 (Cal. Ct. App., 4th Dist., Apr. 15, 2026).