JOHN & MARY JANE KRASKA,	)
	)
Complainants,	)
	)
v.	)		Appeal Number 03-12337
	)
PHILIP MUEHLHEAUSLER, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor, SET ASIDE, Hearing Officer finds true value in money for the subject property for tax years 2003 and 2004 to be $350,000, assessed value of $66,500.

Complainant, John Kraska, appeared pro se.

Respondent appeared by Counsel, Paula J. Lemerman, Associate County Counselor.

Case heard and decided by Hearing Officer, W. B. Tichenor.

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2003.

Complainants appeal, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization which sustained the valuation of the subject property. The Assessor determined an appraised value of $353,100 (assessed value of $67,090, as residential property). Complainant proposed a value of $330,000 (assessed value of $62,700). A hearing was conducted on May 13, 2004, at the St. Louis County Government Center, Clayton, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainant testified in his own behalf. Mr. Kraska gave his opinion of value to be $330,000. He asserted that it would take between $75,000 and $80,000 to bring the subject property up to a really good sale condition. It was his opinion that the property needed to be updated to be valued at more than $330,000.

In support of his opinion of value, Mr. Kraska offered into evidence Exhibit A. Exhibit A consisted of various documents which had been presented by Complainants in their appeal before the St. Louis County Board of Equalization in 2003. Exhibit A consisted of the following documents:

1. Copy of the BOE Appeal Form on the subject property.

2. Statement dated June 11, 2003 by Complainant relative to the valuation of the property under appeal. The reference in the statement to identification and statements on three properties on Falaise Drive was excluded upon objection by Counsel for Respondent which was sustained.

3. A listing of major improvements made since the house was acquired, giving year of the improvement the work done and the cost.

4. Four pages of photographs of the subject property.

5. A real estate listing on a property which sold in July 2002 for $360,000.

6. Copies of bids for interior painting and kitchen remodeling.

Exhibit A was received into evidence, with no objection.

Respondent placed into evidence the testimony of Mr. Craig Whyman, appraiser for St. Louis County. The appraiser testified as to his appraisal of the subject property. The Appraisal Report, Exhibit 1, of Mr. Whyman was received into evidence. Mr. Whyman arrived at an opinion of value for the subject property of $350,000 based upon a sales comparison approach to value. In performing his sales comparison analysis, the appraiser relied upon the sales of three properties which he deemed to be comparable to the subject property.

1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.

2. The subject property is located at 350 Lyonnais Drive, St. Louis County, Missouri. The property is identified by locator number 18O440199. The property consists of .64 of an acre lot improved by a one-story masonry and frame single-family structure of good quality construction. The house was built in 1969 and appears to be in average condition. The residence has a total of nine rooms, which includes four bedrooms, two and a half baths, and contains 2,737 square feet of living area. There is a full basement with finish and an attached two-car garage. Exhibit 1, p. 5.

3. There was no evidence of new construction and improvement from January 1, 2003, to January 1, 2004.

4. Complainant=s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2003, to be $330,000.

5. The properties relied upon by Respondent=s appraiser in performing his appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property. The properties were located within one half mile of the subject. Each sale property sold at a time relevant to the tax date of January 1, 2003. The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability. Exhibit 1, pp. 5-8.

6. The comparables were described as follows:

Comparable 1 (404 Hibler Woods Court - 2 mile North of the subject) sold in January 2001 for $393,000. This property consists of a .58 of an acre lot improved by a one-story masonry and frame single-family structure of average quality construction. The house was built in 1978 and appears to be in good condition. The residence has a total of seven rooms, which includes three bedrooms, three and a half baths, and contains 3,053 square feet of living area. There is a full basement with finished area. There is an attached two-car garage.

Comparable 2 (12609 Mason Forest - 2 mile North of the subject) sold in May 2001 for $400,000. This property consists of a .51 of an acre lot improved by a one-story masonry and frame single-family structure of good quality construction. The house was built in 1978 and appears to be in good condition. The residence has a total of eight rooms, which includes three bedrooms, two and a half baths, and contains 3,080 square feet of living area. There is a full basement, with finished area. There is an attached three-car garage.

Comparable 3 (12520 Robinview - 1/4 mile north of the subject) sold in August 2002 for $325,000. This property consists of a .42 of an acre lot improved by a one-story brick single-family structure of good quality construction. The house was built in 1974 and appears to be in average condition. The residence has a total of seven rooms, which includes three bedrooms, three baths, and contains 2,393 square feet of living area. There is a full basement with finished area. There is an attached two-car garage.

7. The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable. All adjustments appear to be appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.

8. The net adjustments for Comparable 1 amounted to -$38,200 or 9.7% of the sales price. The net adjustments for Comparable 2 amounted to -$43.400 or 10.9 % of the sales price. The net adjustments for Comparable 3 amounted to +$21,000 or 6.5% of the sales price.

9. The adjusted sales prices for the comparables calculated to $354,800, $356,600 and $346,000, respectively. The appraiser concluded on a $350,000 value which calculated to a value per square foot of $127.88 compared with the sales prices per square foot of living area for the comparables of $128.73, $129.87 and $135.81.

10. Respondent did not have to meet a standard of clear, convincing and cogent evidence in this appeal, under the provisions of Section 137.115, RSMo, as he was not seeking to sustain the original valuation presumed to have been made by a computer, computer-assisted method or a computer program.

11. Respondent=s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2003, to be $350,000.

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo. The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Section 138.431.4, RSMo.

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).

The presumption in favor of the Board is not evidence. A presumption simply accepts something as true without any substantial proof to the contrary. In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor (which is not presumed to be correct), is accepted as true only until and so long as there is no substantial evidence to the contrary.

There is no presumption that the assessor=s valuation is correct. Section 138.431.3, RSMo.

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 bought by one who is willing or 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 in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition is the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1. Buyer and seller are typically motivated.

2. Both parties are well informed and well advised, and each acting in what they consider their own best interests.

3. A reasonable time is allowed for exposure in the open market.

4. Payment is made in cash or its equivalent.

5. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

6. The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.

Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary; Exhibit 1, p. 3.

In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification or assessment of the property. The Hearing Officer=s decision regarding the assessment or valuation of the property may be based solely upon its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Section 138.430.2, RSMo.

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert=s testimony and accept it in part or reject it in part. St. Louis County v. Boatmen=s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence. Section 490.065, RSMo; Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).

In order to prevail, Complainants must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2003. 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. See, 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, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law. Hermel, Cupples-Hesse, Brooks, supra.

The owner of property is generally held competent to testify to its reasonable market value. Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970). The owner=s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation. Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).

Missouri courts have approved the comparable sales or market approach, the cost approach (replacement or construction) and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm=n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).

Complainants= evidence in this appeal fails to meet the necessary level of substantial and persuasive to establish the value proffered as the owner=s opinion of value. An owner=s opinion of value which is not grounded in a recognized appraisal methodology will generally not be based on proper elements and a proper foundation. Such opinions of value possess no probative weight or merit on the issue of fair market value. Such is the case in the present appeal.

A review of the evidence presented by Complainants demonstrates its lack of any substantive and persuasive quality. The copy of the BOE appeal form provides no basis to establish a fair market value of $330,000. All that the form really establishes is that an appeal was made to the BOE and that the BOE sustained the Assessor=s value. This was already known by the BOE decision letter filed with the Complaint for Review of Assessment.

The June 11, 2003, statement by Mr. Kraska does not provide any documentation from actual market transactions from which a determination can be made that the subject property would have sold in an open market transaction in January 2003 for the $330,000 figure which Complainants asserted. Complainants= argument as to the percentage increase of 29.5% in assessed value since 2000 has no probative worth in arriving at fair market value. The argument concerning the 23.4% increase in 2001 likewise has no merit in addressing the single issue in this appeal, i.e. fair market value - what the property would have sold for between a willing buyer and seller.

The listing of major improvements since Complainants purchased the home does not establish that the property would have sold for only $330,000 in January 2003. It only establishes that over the course of approximately four years Complainants spent $15,700 in various items of renovation or remodeling. The items listed would generally be concluded to have increased the value of the subject property, since it does not seem reasonable that a property like the subject would have been intentionally remodeled to decrease the value.

The photographs help to illustrate that the subject has an original kitchen and that the subject house is a frame and brick house. That is exactly what Mr. Whyman considered the house as he performed his appraisal. The bids for painting and remodeling of the kitchen only establish the cost for such maintenance and remodeling. They do not establish how such remodeling would actually impact on the sale price. The appraisal problem in an appeal before the Commission is to value the property in the condition in which it existed on the appropriate tax date. While bid information relating to renovations and repairs is helpful for an appraiser, simply providing the bid estimates, falls far short of actually establishing how the existing condition of the home would impact on market value.

In the present appeal, Complainants= information contained in Exhibit A does not constitute any level of substantial and persuasive evidence of an accepted and recognized methodology of appraising real property. The subject house is in average condition for a house of its age, style and general quality of construction. It has not been updated. Simply providing that information to the Hearing Officer gives no basis as to any relevant correlation to fair market value.

Complainants did not meet their burden of proof to establish the value tendered as the fair market value of the subject property.

Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2003, to be $350,000 for the subject. Respondent=s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach. The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single family residences.

The adjustments made Mr. Whyman were consistent with generally accepted guidelines for the appraisal of property of the subject=s type. The adjustments properly accounted for the various differences between the subject and each comparable. The net adjustments to the sale properties fell within a very narrow range from 6.5% to 10.9%. Even the gross adjustments were in a very acceptable range from 14.2% to 16.1%.

In particular, Mr. Whyman properly addressed the only really substantive issue raised by Mr. Kraska relative to the issue of valuation, that was the general condition of the subject home and that it was in need of general updating for a property that was 34 years old on the applicable assessment date. Two of the comparables were deemed to be of superior condition to the subject and Mr. Whyman made a negative adjustment of $30,000 to account for this important factor. Comparable 3 was in a similar condition as the subject and required no such adjustment.

The only other major adjustment was to account for the difference in living area between the subject and each comparable. This adjustment was made on a $45 per square foot basis which appears very reasonable for home of the type, age and size of the subject. This adjustment represents an approximate 35% of the average per square foot sales price of the three comparables. This falls within the generally accepted range utilized by appraisers for this particular adjustment.

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax years 2003 and 2004 is set at $66,500.

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision. The application shall contain specific 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. Section 138.432, RSMo 1994.

If an application for review of this 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 St. Louis 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 or all 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 May 27, 2004.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Hearing Officer