PATRICK N. & SUSAN L. LAWLOR,	)
	)
Complainants,	)
	)
v.	)		Appeal Number 03-10163
	)
PHILIP MUEHLHEAUSLER, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

Decision of the St. Louis County Board of Equalization reducing 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 $545,000, assessed value of $103,550.

Complainant, Patrick N. Lawlor, 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 reduced the valuation of the subject property. The Assessor determined an appraised value of $602,000 (assessed value of $114,380, as residential property). The Board reduced the value to $541,000 (assessed value of $102,790). Complainant proposed a value of $470,000 (assessed value of $89,300) on the Complaint for Review of Assessment. A hearing was conducted on May 18, 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.

Mr. Lawlor (Complainant) testified on his own behalf. He stated his opinion of value for the property to be $482,500, based upon his valuation developed in Exhibit B. Mr. Lawlor developed a methodology which he identified as a cost approach, a methodology labeled comparable properties and a sales comparison analysis. He then averaged the indicated value derived from each of these three techniques to arrive at his final opinion of value.

The following exhibits were offered into evidence by Complainant:

Exhibit A - A document showing pictures and descriptions of various property deficiencies that exist with the subject property.

Exhibit B - Property Valuation Document, setting forth Complainants three types of valuation methodology.

Exhibit C - Assessment Appraised Values - a listing of the 22 properties on Berkshire Drive and their 2003 Appraised Values as determined by the Assessor.

Exhibit D - Settlement Statement and Sales Contract on the purchase of the subject property in August 1997.

Exhibit E - Buyers= Appraisal Report, dated August 27, 1997 on the subject property.

Exhibit F - Sellers= Appraisal Report, dated April, 1997 on the subject property.

Exhibit G - Statement of Complainant to the Commission setting forth the basis for Complainant=s opinion and a listing of four alleged violations by the Assessor=s Office relative to the assessment of the subject property.

Counsel for Respondent objected to Exhibits B, C, D, E and F on the grounds of relevancy, hearsay and lack of foundation to establish an accepted method for valuation of real property. Objections to the cost and comparable properties method of Exhibit B were sustained. Objection as to the Sales Comparison Analysis was overruled. Objections to Exhibits C, D, E and F were sustained. The basis for exclusion of the exhibits and the probative weight given to Complainant=s evidence is discussed below in this opinion. See, Complainants= Exhibits, infra.

Respondent placed into evidence the testimony of Mr. Arthur R. Froeckmann, Missouri State Certified Residential Real Estate Appraiser for St. Louis County. The appraiser testified as to his appraisal of the subject property. The Appraisal Report, Exhibit 1, of Mr. Froeckmann was received into evidence. Mr. Froeckman arrived at an opinion of value for the subject property of $545,000 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 11 Berkshire Drive, Richmond Heights, Missouri. The property is identified by locator number 20K440352. The property consists of .97 of an acre lot improved by a two-story brick single-family structure of average quality construction. The house was built in 1956 and appears to be in average condition. The residence has a total of ten rooms, which includes five bedrooms, two full and one half-baths, and contains 3,860 square feet of living area (utility room and storage rooms are not considered living area). There is no basement and no garage. The home has a screened porch, patio, a circular blacktop driveway leading to an attached portico and a tennis court in the rear yard. The house has an updated modern kitchen and dated bathrooms. The tennis court and brick patio show age and deterioration and have no contributory value to the property. There are no apparent structural problems.

The site is mostly level and has a water shed creek along its southern boundary. The property is not located in a flood hazard zone. There are several low areas in the side and rear yard that hold water and ice during inclement weather. These low areas appear to be long established, curable by adding fill and minor grading, and not significantly detrimental to the property=s marketability. The site size is larger than most sites in the subdivision. 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 $482,500, as proposed at hearing.

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-eighth to one quarter of a 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. 5-9.

6. The comparables were described as follows:

Comparable 1 (29 Berkshire Dr. - 1/8 mile East of the subject) sold in May 2002 for $480,000. This property consists of a .61 of an acre lot improved by a two-story brick single-family structure of average quality construction. The house was built in 1950 and appears to be in fair condition due to a lack of updating. The residence has a total of eight rooms, which includes five bedrooms, two full and one half-baths, and contains 3,016 square feet of living area. There is a full basement with partial finish. The home has a porch, patio, attached rear canopy, paved driveway, two-car attached garage and an in-ground swimming pool.

Comparable 2 (36 Ridgetop Dr. - 1/4 mile Northwest of the subject) sold in February 2002 for $571,500. This property consists of a .43 of an acre lot improved by a two-story brick single-family structure of average quality construction. The house was built in 1950 and appears to be in average condition. The residence has a total of nine rooms, which includes five bedrooms, four full and one-half baths, and contains 4,049 square feet of living area. There is a full basement with partial finish. The home has a stoop, patio, deck, paved driveway, and a two- car attached garage.

Comparable 3 (15 Thorndell Dr. - 1/8 mile Northwest of the subject) sold in August 2002 for $529,900. This property consists of a .37 of an acre lot improved by a one and a half-story brick single-family structure of average quality construction. The house was built in 1937 and appears to be in good condition, due to having a newer addition and remodeling. The residence has a total of eight rooms, which includes four bedrooms, three full and two half-baths, and contains 2,909 square feet of living area. There is a full basement with partial finish. The home has a porch, deck, paved driveway, and a two-car attached 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 +$58,400 or 12.17% of the sales price. The net adjustments for Comparable 2 amounted to -$16,400 or 2.87% of the sales price. The net adjustments for Comparable 3 amounted to +$14,800 or 2.79% of the sales price.

9. The adjusted sales prices for the comparables calculated to $538,400, $555,100 and $544,700, respectively. The appraiser concluded on a $545,000 value which calculated to a value per square foot of $141.19 compared with the sales prices per square foot of living area for the comparables of $159.15, $141.15 and $182.16.

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 rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2003, to be $545,000, assessed value of 19% of the fair market value, or $103,550.

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 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).

The burden upon the taxpayer in an appeal before the Commission is to come forward with evidence that is substantial and persuasive to prove the value which they are offering. The owner=s opinion of value must be developed from property elements. It must be based upon a proper foundation. In virtually all instances, the proposed value by the owner must be derived from the actual sale of the property at a time relevant to the valuation date or be established from a recognized appraisal approach in order for the taxpayer to be successful in their appeal. Opinions of value which are not established from such sources have no real probative weight or value.

Such is the case in the present appeal. Mr. Lawlor attempted to develop an opinion of value relying upon what he characterized as a cost approach, comparable properties and a sales comparison analysis. As will be addressed below, the cost approach and comparable properties method developed by Mr. Lawlor were excluded from evidence because it was not established that either was a proper appraisal technique. The sales comparison analysis failed to meet the standard of substantial and persuasive evidence to support the opinion of value offered, as also will be analyzed below. The owner=s opinion failed to be established upon proper elements and a proper foundation, accordingly it can be given no probative weight and value. Complainants failed to meet their burden of proof to establish value by substantial and persuasive evidence.

A review of the exhibits offered into evidence by Mr. Lawlor will provide a clearer understanding of the weaknesses, deficiencies and flaws in Complainants= evidence.

This exhibit set out in narrative and pictorial form various deficiencies present with the subject property. The exhibit was received into evidence. The information contained in documents like this exhibit are helpful to both an appraiser and to the Hearing Officer to gain a better understanding of physical characteristics f a given property that impact upon its fair market value. However, such information does not establish how in terms of dollars the market would recognize and account for such a problem. The Exhibit has probative value in explaining the condition of the property as far as the specific conditions illustrated. It has no probative value from which the Hearing Officer can determine that based upon market data the factors illustrated would establish a value for the subject property of $482,500.

Appraisers make judgments on condition matters when valuing property. In this case, the issues relating to the lack of garage, no basement, tennis court, patio, creek and flooding (items set out in Exhibit A) were all recognized by the Respondent=s appraiser. He gave no contributory value to either the tennis court or the patio. He adjusted for the lack of garage and no basement. He also adjusted for location to account for the creek issue. He made no specific adjustment relating to the low areas where pooling or flooding occurs, as he did not deem the market would necessarily recognize this factor.

The issue of the mechanical equipment of the subject being at the end of its useful life would be similar to the situation in the comparable properties used by Respondent=s appraiser. In any event there was no showing as to how, in terms of dollars, this would impact value in comparison to sale properties. In point of fact, Complainant did not make any specific adjustment when he attempted his sales comparison analysis. The Hearing Officer finds Respondent=s appraiser properly addressed the condition issues raised by Exhibit A.

This exhibit consisted of Complainant=s calculation of value for the subject property. It includes the performance of what he considered a cost approach (page 1); an averaging of sales prices of comparable properties (page 2); a copy of Consumer Price Index for Housing for January 1998 and January 2003 (page 3); and a sales comparison analysis (page 4). Pages 1, 2 and 3 were excluded from evidence upon the sustaining of Counsel for Respondent=s objections. Page 4 was received into evidence subject to Counsel=s objection.

The testimony of Mr. Lawlor failed to establish that based upon his education, training and experience that he possessed the necessary qualifications to be considered as an expert in the appraisal of real property. Accordingly, his opinion of value developed from his combination of approaches cannot be given any probative weight. When a taxpayer in an appeal before the Commission attempts to develop an appraisal methodology or approach that is generally utilized in the appraisal field, he assumes the burden of establishing that he in fact possesses the requisite credentials to serve as an expert in the valuation of real property. There is no evidentiary exemption by which a lay person can assume the mantel of the expert when testifying before the Commission.

Mr. Lawlor=s cost approach was an improper attempt at the cost approach for appraising of real property. Since it was not based upon the proper methodology and procedures for developing a true cost approach it had no probative value. The Lawlor method was to take the original purchase price of the property, add cost of improvements between 1997 and January 2003, add an inflation factor based upon the consumer price index and then also adjust for a 6% appreciation factor. This method does not constitute a proper cost approach under well recognized and accepted appraisal guidelines and standards.

A correct cost approach first determines the value of the subject land based upon sales of vacant land. This Mr. Lawlor did not do. Next, the cost for replacement of the subject improvements as of January 1, 2003 would have been calculated based upon current cost to build. This was not done. Then appropriate depreciation factors to account for physical, functional and economic obsolescence, developed from the market would have been deducted from the cost of replacement. This was not done. These calculations would have produced an indicated replacement cost new less depreciation for the subject improvements. To this indicated improvements value would have been added the land value to arrive at an indicated fair market value. This was not done.

As a result of failing to properly perform a cost approach the indicated value developed by Mr. Lawlor possesses no probative weight or value in this appeal.

The next method which Complainant developed was to average the sale prices of eleven properties in the subject subdivision that had sold in a period from March 2001 through May 2004. This portion of the exhibit was excluded upon objection, as lacking relevancy and not having a proper foundation as to an appropriate method for the valuation of real property.

When a taxpayer desires to utilize some innovative and creative method for the valuation of real property, the taxpayer has the burden to establish that the method which they have devised has been recognized and accepted for the appraisal of real property. No such showing was made on this record for Complainant=s averaging technique. The averaging of sales prices is a faulty procedure and is not recognized or accepted for appraisal of property before the Commission. Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers (1982), p. 159.

The indicated value developed from averaging sale prices possesses no probative weight or value in this appeal.

The page of Exhibit B which contained the information on the Consumer Price Index factor for Housing in January 1998 and January 2003 only had relevance to Mr. Lawlor=s attempt at a cost approach. Since that methodology was not relevant and excluded, this page of the Exhibit likewise had no relevance and was excluded.

This page of Exhibit B was received into evidence only because it had the appearance on its face of presenting a recognized appraisal approach. The Analysis suffers under the burden of Complainant=s lack of expertise to qualify him as an expert in appraisal of property. The fact that Mr. Lawlor is in the contracting business and has valued properties for his own purposes does not establish the necessary level of education, training and experience to qualify him as an expert before the Commission.

A careful review of the sales comparison grid developed by Mr. Lawlor reveals that the conclusion of value reached by this method has no probative value. Sale number 3 used by Mr. Lawlor was also used by Respondent=s appraiser as his Comparable 1. This is the only one of the five properties listed by Mr. Lawlor that was appropriate to be used as a comparable in the present appeal.

Sale 1 occurred 17 months after valuation date. While a sale after tax date is not automatically disqualified as a comparable, it is inappropriate to use such a sale when there exist sales that occurred in just the year prior to the valuation date, i.e. Respondent=s comparables. Furthermore, the difference in square footage of living are of this comparable (998 square feet smaller) presents another weakness in using this sale.

Sales 2 and 3 were 1,026 and 1,434 square feet smaller in living area than the subject. This difference is too great to consider relying on these sales when there were sales which were closer in living area that could be used, i.e. Respondent=s comparables.

Sale 5 was of a home that was only six years in age compared to the subject=s 47 years. This is too great of an age difference for purposes of comparability, when sales of homes much closer in age to the subject were available, i.e. Respondent=s comparables.

The adjustment made by Mr. Lawlor for differences in living area can be given no credible weight. An adjustment of only $19 per square foot is simply not appropriate for a home of the style, quality and value of the subject. That adjustment represents less than 12% of the average per square foot sale price of the five sales used by Mr. Lawlor. In the Hearing Officer=s more than twelve year=s experience in hearing and deciding residential property appeals for the Commission, he cannot recall any appraiser making such a small dollar adjustment for differences in living area for a property like the subject. The adjustment falls so far below the general range utilized by appraisers that it has no probative weight and renders the sales comparison analysis fatally flawed.

In like manner the adjustments made by Mr. Lawlor for other differences are not appropriate. It is clear that the adjustments represent more the cost for such a factor and not what the market would recognize for each factor. Only on the item of difference in fireplace count did Mr. Lawlor provide a reasonable adjustment. The other adjustments were simply too large.

The Hearing Officer did a rough analysis of Mr. Lawlor=s sales grid utilizing the general adjustments made by Mr. Froeckmann in his appraisal. Such an analysis demonstrates no support for the valuation offered by Complainant, but does give support for the value determined by Respondent=s appraiser.

The value determined under the sales comparison analysis was not based upon proper comparables, or appropriate adjustments as would have been performed by an experience appraiser. Anyone can copy the form of a sales grid to be used in a sales comparison approach, however, that does not mean the value reached reflects what an experience appraiser would determine. Mr. Lawlor does not possess the training and experience to properly develop a sales comparison approach to value. His opinion of value determined by his analysis is not established by substantial and persuasive evidence.

The conclusion of value reached by Mr. Lawlor in this exhibit was based simply upon averaging the values derived from his cost method, his comparable sales method and his sales comparison method. Since none of these three methods was appropriate and proper, the averaging of them obtains nothing to establish the fair market value of the subject property on January 1, 2003.

This exhibit listed the addressed and Assessor=s Appraised Values for 2003 on 22 properties on Berkshire Drive. This exhibit was excluded upon the sustaining of the objection as to relevancy. What the Assessor=s appraised values are on 5, 10 or 22 properties might not prove relevant to the issue of fair market value of the subject property. There is no presumption, by statute, that any of the values in Exhibit C are in fact correct. The exhibit did nothing to establish the owner=s opinion of value.

Exhibit D was excluded from evidence as it has no relevancy to the fair market value for the property in January 2003. The purchase price in 1997 is too remote in time to have any probative value for this appeal.

These exhibits, the appraisals for the buyers and sellers in the 1997 purchase of the property establish nothing of relevance in this appeal. Neither of the appraiser who performed the appraisals were present to testify. The Hearing Officer cannot imagine that either would have been able to have relied upon their 1997 work as a basis for forming an opinion of value for 2003.

Exhibit G was received into evidence as stating the Complainants= opinion of value. In Exhibit G, Mr. Lawlor asserts four alleged violations of regulations on the reassessment of his property. These allegations of violations are: (1) Lack of Required Notice; (2) Overly Large Increase; (3) Lack of Methodology for Valuation; and (4) Original Purchase Not Taken Into Account In Past Assessments.

None of these asserted violations are relevant to proving fair market value of the subject property. None of these allegations are matters upon which the Hearing Officer can base a reduction in value to the value proposed by Complainants. In short, the allegations have no relevancy in this proceeding, however, the Hearing Officer will provide a brief response to each for the benefit of Complainants.

Complainants assert that the Assessor=s published 2003 time line called for notices to be mailed in March 2003, but his notice was not sent until May 19, 2003 and he was denied the right to an informal conference and this eliminated valuable time to prepare his appeal.

It is obvious that Complainants appealed to the Board and to the Commission. The appeal to the Commission was on September 4, 2003. Complainants were given more than adequate time to prepare their appeal to the Commission. The Hearing Officer knows of no statute which requires the Assessor to conduct an informal conference. While this is the practice of the St. Louis County Assessor=s office in past assessment cycles, no right of Complainants was violated by not sending a notice until May 19, 2003.

Complainants assert that the increase of 20% for 2003 is excessive. There is no statutory requirement that an increase from one assessment cycle (2001) to the next assessment cycle (2003) must be limited to a certain percentage. The statutory mandate upon the Assessor is to assess the property at 19% of its fair market value. The percentage increase from one cycle to the next is not relevant to the issue of fair market value.

Complainants charge that the Assessor is required to provide a list of comparables and/or advise as to the method of valuation with the Change of Assessment Notice. Although it has been the general practice of the St. Louis County Assessor to print a list of sale properties used to value the taxpayer=s property on the Change Notice, there is no statutory requirement that it be done. The failure to provide such a list is not a violation of law. In point of fact the Change Notice for Complainants= property was filed with their Complaint for Review of Assessment with the Commission. It shows that in point of fact the notice advised: ASeveral methods of valuation are available for the purpose of estimating the market value of real property. The indicated value of your property was determined by using a combination of information obtained from the comparable sales method, the cost approach, and/or the capitalization of income.@

The fact that there was no listing of comparable properties or information as to the specific valuation method used for the 2003 assessment is not relevant to the issue before the Hearing Officer.

Complainants finally assert that in past assessments the Assessor had failed to give effect to the 1997 purchase price of the subject property. The practices of the Assessor in past assessment cycles is not at issue in this appeal. Complainants claim that the Assessor has valued the subject property relying on over inflated valuations from past assessments. Even if that were in fact the case, it has no relevancy for the present appeal.

The Hearing Officer is not determining value based upon a starting point of any prior valuation. The Hearing Officer starts at ground zero. There is no presumption that the Assessor=s value is correct. While there is a presumption that the Board correctly valued the property, that is only the starting point for purposes of the Complainant being required to present substantial and persuasive evidence of value.

For the Hearing Officer=s purposes the value of the subject property is unknown, it is the factor of X, until there is relevant evidence which meets the standard of substantial and persuasive to establish value. If no substantial and persuasive evidence is put upon the record, then the Hearing Officer must simply follow the presumption that the Board correctly value the property. When substantial and persuasive evidence is presented, then based upon that evidence the Hearing Officer finds fair market value. The past practices of the Assessor in valuing the subject property play no role in the evidentiary process which the Hearing Officer follows.

Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2003 to be $545,000 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 the Mr. Froeckmann 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 an acceptable range from -2.87% to +12.17%. The indicated per square foot value was at the lower end of the sale values of the comparable properties.

The appraisal problem in an appeal before the Commission requires an appraiser to exercise his judgment based upon his education, training and experience to select at least three properties which are the most similar to the property being valued. Sometimes the appraiser is valuing a property that is located in a subdivision where all of the homes are of very similar site size, living area, and age. These are three important factors which every appraiser considers when selecting sales properties to be used as comparables. A fourth factor which always comes into play is the date of sale.

Ideally, it is desirable to select sales which are as close to the valuation date (January 1, 2003 for this appeal) as possible. Mr. Froeckmann selected three sales of properties which had sold within five to eleven months of January 1, 2003. In other words, these were the most recent sales. These sales give a better indication of value than sales that would be fifteen or more months from the valuation date.

Site size is another important element. The subject in this appeal has nearly a one acre lot, other lots in the subdivision appear to be generally somewhat smaller than this. At least of the sales presented by Mr. Froeckmann, as well as the sales put forth by Complainant, the subject has the largest lot. However, site size is a factor for which an appraiser adjusts if the difference in size is sufficient to warrant an adjustment in the judgment of the appraiser. Mr. Froeckmann properly accounted for the smaller lot size for each of his three comparables and made an appropriate adjustment.

Age of the improvements is another very important factor. Homes that are significantly newer or older than the house that is being appraised present a difficult adjustment problem. The properties selected by Mr. Froeckmann were all within six to nineteen years of the subject home. Comparables 1 and 2 were with six years of the subjects age. The appraiser did not feel the market would recognize any significant difference for Comparable 3 that was nineteen years older than the subject. The Hearing Officer does not disagree with the appraiser=s conclusion and has no basis in this record to support an adjustment for this factor.

The living area of comparables is another important factor for which appropriate adjustments must be made. In most cases, appraisers desire to utilize sale properties where the living area comes within 500 square feet of the subject house=s area. That is not always possible in every appraisal problem. Such is the case in the present appeal.

Ideally, homes with living area in a range from 3360 to 4360 square feet would have been desirable for appraising the subject. This would have provided a range of homes that would have been from approximately 13% smaller to 12% larger than the subject. Mr. Froeckmann utilized one comparable (Comparable 2) which was only 189 square feet (5%) larger than the subject. Comparables 1 and 3 were 844 square feet (22%) and 951 square feet (25%) smaller than the subject. This factor is a point of small weakness, it is not a fatal flaw. None of the other sales of similar aged homes in the subdivision presented by Complainant came closer in living area to the subject than did Mr. Froeckmann=s Comparables 1 and 3.

The adjustment made for living area was appropriate. The appraiser adjusted each comparable based upon a factor of $55 per square foot or 34% of the average of the per square foot sale prices of the comparables. This falls within the range of an adjustment of 25-35% of the per square foot sale price average generally utilized by appraisers, depending upon the type and quality of the subject and the comparables.

In those situations where the sales from which the appraiser may draw comparables are within the appropriate age range and located in the subject subdivision, the selection of homes that exceed the 500 square foot of living area guideline is warranted. Especially where no homes closer in living area exist. Such was the case in this appeal. When valuing a home in the 3,000 to 4,000 square foot range, that is not in a tract home subdivision, but is custom built, this will generally be part of the appraisal problem that will be presented.

Often times, the issue will be whether to use similar aged homes in the subject subdivision or neighborhood that are within a mile of the subject, or whether to go beyond the one mile guideline into subdivisions or neighborhoods that may be different from the subject and therefore require adjustment for that factor, in order to obtain sales that are within 500 square feet in living area to the subject. This is where the judgment of the appraiser, based upon training and experience comes into play.

The Hearing Officer is certain the appraiser would have preferred to have been able to have used sales of similar aged homes in the subdivision that were closer in living area than Comparables 1 and 3. However, the appraiser does not have the luxury of creating sale properties that do not exist. Sometimes the appraiser must play the appraisal hand that is dealt him, relying upon the best sales data which he may find. This appears to be one of those situations. Mr. Froeckmann utilized the best comparables available, on this record, and made adjustments that were appropriate to account for relevant differences.

One final area relating to Mr. Froeckmann=s appraisal which arose at the evidentiary hearing related to his treatment of the fact that the subject property did not have a basement, but did have above ground storage and utility area. The Hearing Officer would understand that another appraiser might address this matter in a different manner than did Respondent=s appraiser. However, there is nothing on this record which persuades the Hearing Officer that he should attempt to deal with this factor in a fashion different from the Froeckmann technique.

In like manner the adjustments made by Mr. Froeckmann to account for the subject having no garage and the comparables not have a covered or canopy portico appear to be a fair and reasonable way to account for these differences. Here again it is reasonable that another appraiser would account for these factors in some other form or fashion. Just as good appraisal minds sometimes run in the same direction, sometimes they will run in varying directions. The possibility of there being another manner in which this part of the appraisal problem might be attacked does not render Mr. Froeckmann=s method inappropriate. The Hearing Officer is persuaded that Respondent=s appraiser properly accounted for these differences.

Complainant=s opinion of value was developed based upon faulty and flawed methodologies, accordingly it did not possess sufficient weight and reliability to meet the burden of substantial and persuasive evidence to establish the fair market value presented. Respondent=s evidence of value was developed from a recognized and reliable approach to prove value. Respondent established by substantial and persuasive evidence the fair market value of the subject property as of January 1, 2003 to be $545,000.

The assessed valuation for the subject property as determined 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 $103,550.

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 June 18, 2004.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Hearing Officer