ROBERT ALLEN, ) ) Complainant, ) ) v. ) Appeal Number 02-30062 ) Q. TROY THOMAS, ) ACTING DIRECTOR OF ASSESSMENT, ) JACKSON COUNTY, MISSOURI, ) ) Respondent. )
DECISION AND ORDER
The above matter was heard on April 7, 2003, before Hearing Officer Luann Johnson, in the Jackson County Courthouse, Kansas City, Missouri. Complainant appeared pro se. Respondent was represented by Michael LeVota, Assistant County Counselor.
The appeal concerns the market value of a residential property located in Jackson County, Missouri. The assessor initially set that the market value of the property at $1,000,000 (assessed value - $190,000). Complainant appealed asserting light pollution. The Board of Equalization reduced value to $871,000 (assessed value $165,490). At hearing before the Tax Commission, the Respondent asserted a value of $820,000 (assessed value $155,800). The taxpayer represented that he did not know the market value of the subject property.
ISSUE
The issue in this case is the true value in money of the subject property on January 1, 2002.
HOLDING
The true value in money of the subject property on the tax day was $820,000 (assessed value $155,800) as asserted by Respondent. Complainant has failed to present substantial and persuasive evidence tending to show any reduction in market value attributable to any alleged light pollution.
FINDINGS OF FACT
1. Jurisdiction over this appeal is proper.
2. Complainant is the owner of a property identified as parcel number 53-500-04-15, more commonly known as 9722 Windsor Drive, Lee's Summit, Missouri.
3. The subject property is a four acre tract improved with a 5,096 square foot one and one-half story single-family dwelling over a partially finished basement. The home has 5 bedrooms, six full baths and 2 half baths. It has a recreation room and weight room below grade with a walk out basement. It has a four-car attached garage and a four-car detached garage. Other amenities include a patio, deck, three fireplaces, air cleaner, central vacuum, humidifier, security system, zoned heat pump, sauna, and a wet bar. Quality is very good to excellent. Condition is excellent with no signs of deferred maintenance or atypical wear. No functional obsolescence was noted in the floor plan or design.
4. Complainant is a contractor and built this dwelling himself at a cost of $734,000. A construction appraisal (Complainant's Exhibit 9) estimated market value in January, 2001 at approximately $800,000. Construction was completed in December, 2001.
5. Recent sales of similar properties indicate a range of value between $818,699 and $950,468. (Respondent's Exhibit A). None of the sales are located within Complainant's subdivision. Adjustments made by Respondent's appraiser to the sales prices of the comparable properties were reasonable.
6. Neither Complainant's appraiser nor Respondent's appraiser observed any external obsolescence surrounding the subject property.
7. The subject property backs up to a sports complex installed by the City of Lee's Summit. Between March and May, 2002, the City installed lights at the sports complex. The light poles are 1,150 feet from the rear of Complainant's dwelling and cast light into Complainant's master bedroom, loft bedroom and hearth room. Complainant has spent approximately $11,000 to install blinds but asserts that the blinds will not be adequate to remedy the problem.
8. Sometime in 2002 Complainant filed a lawsuit against the City of Lee's Summit alleging light pollution which interfered with his enjoyment of his property and which decreased the value of his property. Complainant requested an injunction but did not assert a specific dollar figure for the alleged diminution in value of his property.
9. The sports complex is not yet operational but will be heavily utilized when it does become operational.
10. After the dwelling was completed, Complainant placed it on the market for an asking price of $947,000. Two weeks prior to hearing, Complainant reduced the asking price to $835,000. Normal marketing time for a dwelling of this type is six to eight months.
11. Neither party presented a paired sales analysis which would enable the Commission to determine the extent of external obsolescence associated with this property. However, Complainant testified that he has recently sold a home with the same floor plan as the subject property, but approximately a mile away, for $1.1 million. Respondent's appraiser testified that the value of building lots in the subject subdivision show no diminution in value subsequent to the installation of the park lights.
12. After public hearing, the City of Lee's Summit purchased the land to build the park in July of 1998 (Complainant's Exhibit 4). A park plan, which including the type of lighting and the layout of the lighting was presented to the public on May 10, 1999. At the request of Complainant, the City agreed to set the light poles 750 feet from the back of Complainant's property line. Robert Allen Construction Company, Inc. did not seek a building permit for the subject property until August of 1999 (Complainant's Exhibit 5). On December 18, 2001, Robert Allen, in his personal capacity, purchased the improved lot from Robert Allen Construction Company, Inc. (Complainant's Exhibit 5).
CONCLUSIONS OF LAW
Section 137.115, RSMo requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and purchased by one willing and desirous to purchase but who is not compelled to do so. St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children's Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993). It is the fair market value of the subject property on the valuation date. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).
Market value is the most probable price which a specified interest in real property is likely to bring under the following conditions:
1. Consummation of a sale occurs as of a specified date;
2. An open and competitive market exists for the property interest appraised;
3. The buyer and seller are each acting prudently and knowledgeably;
4. The price is not affected by undue stimulus;
5. The buyer and seller are typically motivated;
6. Both parties are acting in what they consider their best interest;
7. Marketing efforts were adequate and a reasonable time was allowed for exposure to the open market;
8. Payment was made in cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
9. The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
In order to prevail, Complainant must present an opinion of market value and then must present substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2002. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897.
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.
The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 27 S.W.2d 50, 53 (Mo. App. 1975).
While there is no longer an automatic presumption regarding the correctness of an assessor's valuation, this does not mean that there is now a presumption in favor of the taxpayer. The taxpayer in a Commission tax appeal still bears the burden of proof and must show by a preponderance of evidence that the assessment being appealed is incorrect. Westwood Partnership v. Gogarty, 2003 WL 176823 (E.D. January 28, 2003).
DECISION
Complainant asserts that the lights from the adjacent park are so bright that they are and will continue to affect the marketability of his home. When external forces, which are beyond an owner's control, affect the value of his property, this is referred to as external obsolescence. External obsolescence is a recognized form of depreciation. However, when a party asserts external obsolescence, they bear the burden of establishing that the obsolescence exists and the extent to which it impacts their property value. Complainant has failed to meet this burden.
What we do know is that the park land was purchased in 1998 and that lot sales in the subdivision have remained stable since then. We can conclude that potential purchasers are aware that a large park, and its lights, are located close to these home sites and the market has recognized any potential diminution in value through an appropriate adjustment to the sales prices of these lots. We also know that Complainant built and sold a substantially similar home within a short distance of the subject property for $1.1 million at a point in time close to the appraisal date. We have uncontroverted evidence from a certified appraiser that the subject property has a market value of approximately $820,000. And, we have the opinion of the certified appraiser, who prepared the pre-construction appraisal for the construction loan in 2001, that a good estimate of market value at that time was $800,000. All of these factors suggest that any adjustment that may have been necessary for external obsolescence has been recognized by the market and is reflected in the Respondent's opinion of value through the adjustments to site value.
ORDER
The assessed valuation for the subject property for tax year 2002, as determined by the Board of Equalization, is SET ASIDE. The Clerk is ordered to put a new market value of $820,000 (assessed value $155,800) on the tax books for tax year 2002.
A party may file with the Commission an application for review of a hearing officer decision within thirty (30) days of the mailing of such decision. The application shall contain specific detailed grounds upon which it is claimed the decision is erroneous. Failure to state specific facts or law upon which the appeal is based will result in summary denial.
If an application for review of a hearing officer decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission. If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of Jackson County as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal. If any protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED April 16, 2003.
STATE TAX COMMISSION OF MISSOURI
Luann Johnson
Hearing Officer