PAUL & MARGITA DZATKO,	)
	)
Complainants,	)
	)
v.	)		Appeal Number 03-10334
	)
PHILIP MUEHLHEAUSLER, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor, AFFIRMED, true value in money for the subject property for tax years 2003 and 2004 set at $285,300, assessed value of $54,210.

Complainant Paul Dzatko 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.

Complainant appeals, 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 $285,300 (assessed value of $54,210, as residential property). Complainant proposed a value of $257,000 (assessed value of $48,830). A hearing was conducted on April 27, 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. Dzatko appeared and testified in his own behalf. He gave his opinion of value for the subject property to be $257,000. This was based on the overall condition and various items of deferred maintenance of the subject property. Mr. Dzatko also asserted that his house is an assembly built home and not a custom built home and therefore is of less value than custom built homes. The following exhibits were offered into evidence on behalf of Complainant.

Exhibit A, Repair bid for pool, with photograph.

Exhibit B, Bid for painting.

Exhibit C, Bid on carpeting.

Exhibit D, 2 bids on window replacement, with photographs.

Exhibit E, Bid on interior painting, with photographs.

Exhibit F, Bid for roofing repair, with photographs.

Exhibit G, Bid for bathroom upgrading and repair, with photograph.

Exhibit H, Two bids for driveway repairing, with photographs.

Exhibit I, Bid for repair and replacement related to the sun deck and fencing, with photographs.

Exhibit J, March 19, 2003 Notice of Change in Assessment.

All the exhibits were received into evidence, except for one of the driveway bids, since it was a bid for replacing the driveway with concrete, instead of an asphalt repair or replacement, as the original driveway is not concrete.

Respondent placed into evidence the testimony of Mr. John D. Rebsamen, 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. Rebsamen was received into evidence. Mr. Rebsamen arrived at an opinion of value for the subject property of $368,000 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. Exhibit 2, a listing of deferred maintenance and update items and the contributory value for these utilized by Mr. Rebsamen in his appraisal, was also received into evidence.

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 135 Highgrove Lane, Clarkson Valley, Missouri. The property is identified by locator number 21T140092. The property consists of .78 of an acre lot improved by a two-story masonry and frame single-family structure of average quality construction. The house was built in 1978 and appears to be in below average condition. The residence has a total of ten rooms, which includes four bedrooms, four full and one half baths, and contains 3,068 square feet of living area. There is a full basement with approximately 1000 square feet of living area and an attached three-car garage. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2003. Exhibit 1, p. 5.

3. The property suffers from deferred maintenance and lack of interior updates to the house. The in-ground pool requires resurfacing and the heater is non-functional. The pool patio is cracking and settling. The wood privacy fence and landscaping timbers are rotting in several areas and need replacement. The rear deck appears to be structurally sound however, many floor boards, railing and support posts need replacement. Several wood trim and soffit boards need replacement. The exterior is in need of caulking and painting on exterior wood surfaces. The flooring is original and worn. The kitchen and bathrooms are original and dated. The interior wall and trim surfaces are in need of painting. The double pane wood windows are original and several have fogging attributable to broken seals. The basement sliding door is original and is in need of repair or replacement. Exhibit 1, p. 5, Exhibits A through I.

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

5. 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 $257,000.

6. 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 less than a 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 for purposes of performing the appraisal in this case.

7. The comparables were described as follows:

Comparable 1 (214 Fox Chapel Lane - .18 of a mile southeast of the subject) sold in May 2002 for $475,000. This property was built by the same developer as constructed the subject property. This property consists of a 1.70 acre lot improved by a two-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 ten rooms, which includes five bedrooms, three full and two half baths, and contains 3,167 square feet of living area. There is a full basement, which has 1,200 square feet of living area. There is an attached two-car garage.

Comparable 2 (260 Pennington Lane - .37 of a mile southwest of the subject) sold in May 2002 for $460,000. This property was built by the same developer as constructed the subject property. This property consists of a .90 of an acre lot improved by a two-story masonry and frame single-family structure of average quality construction. The house was built in 1979 and appears to be in good condition. The residence has a total of nine rooms, which includes four bedrooms, four full and one half baths, and contains 3,221 square feet of living area. There is a full basement, which has 800 square feet of living area. There is an attached four-car garage.

Comparable 3 (41 Forest Club Drive - .24 of a mile northwest of the subject) sold in March 2002 for $437,500. This property consists of a 1 acre lot improved by a two-story masonry and frame with vinyl siding single-family structure of average quality construction. The house was built in 1977 and appears to be in good condition. The residence has a total of ten rooms, which includes five bedrooms, three full and one half baths, and contains 2838 square feet of living area. There is a full basement, which has 2,000 square feet of living area. There is an attached four-car garage.

8. 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. An adjustment to each comparable of a negative $80,000 was utilized to account for all of the various items of deferred maintenance and repairs existing on the subject property.

9. The net adjustments for Comparable 1 amounted to -$88,500 or 18.63% of the sales price. The net adjustments for Comparable 2 amounted to -$91,900 or 19.98%% of the sales price. The net adjustments for Comparable 3 amounted to -$80,800 or 18.47% of the sales price.

10. The adjusted sales prices for the comparables calculated to $386,500, $368,100 and $356,700, respectively. The appraiser concluded on a $368,000 value which calculated to a value per square foot of $119.95 compared with the sales prices per square foot of living area for the comparables of $49.98, $142,81 and $154.16.

11. Respondent=s evidence met the standard of clear and convincing to establish the value of the subject, as of January 1, 2003, to be $285,300, as originally determined by the Assessor and sustained by the Board..

12. Respondent=s appraisal was accepted only to sustain the original assessment made by the Assessor and not for the purpose of raising the assessment above that value.

CONCLUSIONS OF LAW

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).

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).

Opinion Testimony by Experts

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).

The Respondent has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program. There is a presumption in this appeal that the original valuation, which was sustained by the Board of Equalization, was made by a computer, computer-assisted method or a computer program. There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $285,300, appraised value, Respondent=s evidence must come within the guidelines established by the legislature and must clearly and convincingly persuade the Hearing Officer as to the value sought to be sustained.

The statutory guidelines for evidence to meet the standard of clear, convincing and cogent include the following:

(1) The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and

(2) The purchase prices from sales of at least three comparable properties and the address or location thereof. As used in this paragraph, the word comparable means that:

(a) Such sale was closed at a date relevant to the property valuation; and

(b) Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used. Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics.

Section 137.115.1(1) & (2).

Clear, cogent and convincing evidence is that evidence which clearly convinces the trier of fact of the affirmative proposition to be proved. It does not mean that there may not be contrary evidence. Grissum v. Reesman, 505 S.W.2d 81, 85, 86 (Mo. Div. 2, 1974). The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt. 30 AmJur2d. 345-346, Evidence section 1167. AFor evidence to be clear and convincing, it must instantly tilt the scales in the affirmative when weighed against the evidence in opposition and the fact finder=s mind is left with an abiding conviction that the evidence is true.@ Matter of O=Brien, 600 S.W.2d 695, 697 (Mo. App. 1980).

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).

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).

In any case in St. Louis County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor=s or board=s valuation, and not for increasing the valuation of the property under appeal. Section 138.060, RSMo; 12 CSR 30-3.075.

At the opening of the evidentiary hearing a question arose as to the original value established by the Assessor for 2003 on the subject property. Mr. Rebsamen=s appraisal indicated on page 1 that the original assessment was at a fair market value of $335,500, assessed value of $63,750. However, the Board decision letter filed with the Complaint for Review of Assessment gave the original assessment at $54,210 or a fair market value of $285,300. The Board sustained that value.

Furthermore, Exhibit J (March 19, 2003 Change of Assessment Notice) gives a total appraised value of $285,300, with a total Current Assessed Value of $54,210. Mr. Dzatko=s testimony was that the only notice he had received was Exhibit J. The record did not establish that the property had originally been assessed at the $335,500 value, accordingly, the Hearing Officer is precluded from raising the property value above the amount show on Exhibit J, the Board Decision letter and the value which the Board sustained, i.e. $285,300.

The opinion of value offered by Mr. Dzatko was not substantial and persuasive to establish a fair market value of only $257,000 for the subject property. An owner=s opinion that is not supported and documented by a method of valuation that is generally recognized and accepted for the appraisal of property is not persuasive on the issue of fair market value. An opinion of value unsupported by a technique for valuation which rests upon proper elements and a proper foundation has no probative value before the Commission.

Mr. Dzatko clearly demonstrated that the subject property suffers from various items of deferred maintenance and needed updating. Mr. Rebsamen was not in disagreement on that point. However, simply establishing that there are needed repairs and the estimates for such repairs does not adequately demonstrate how the market would treat the deferred maintenance in a potential sale price. That must be established through an appropriate valuation approach of adjusting comparable sale properties for that factor, unless an appraiser has comparables that also suffer from similar condition problems.

The photographs and estimates for repair while helpful to demonstrate the various items of needed maintenance do not establish the fair market value of the subject property to be $257,000. It is not clear exactly how Mr. Dzatko arrived at that figure. In like manner, the contention of Mr. Dzatko that since his home was not a custom built home it would not be worth as much as a custom built home is a factor for an appraiser to consider. However, simply raising that issue does not prove the matter to be in fact true. It does not establish how much more a similar custom built home would be worth in the market compared to another home very similar to the custom built home, but being an assembly built home as described by the Complainant. The Hearing Officer recognizes the argument of Mr. Dzatko. However, without market data which addresses this point and from which the Hearing Officer could make a reasoned and supportable calculation as to the monetary difference that the market would recognize for the value of a custom home over an assembly built home the argument carries no probative weight.

The evidence presented by Mr. Rebsamen through his appraisal clearly and convincingly establishes that the subject property, even in its condition of deferred maintenance, would have commanded a sale price of at least $285,300 on January 1, 2003. The appraiser took into account the most critical issue in this valuation exercise - the deferred maintenance. Mr. Rebsamen made a determination as to the contributory value in the market for each of the individual items of repair and maintenance (Exhibit 2) and then adjusted each of the sale comparables due to their generally superior condition in comparison to the subject.

The percentage adjustments required fell just below a net of 20% of the sale price for the comparables. Although this is somewhat on the high side for most appraisals, it is not out of line for this appraisal problem, given the fact of the large amount of deferred maintenance existing in relation to the subject property. Absent the need for the condition adjustment the percentage adjustments would have been much smaller falling in a very narrow range from less than 1% to just over 2.5%.

Mr. Rebsamen did not make a specific adjustment to account for the subject not being a custom built home. Apparently comparables 1 and 2 were built by the same builder as the builder for the subject and did not appear to be custom built homes. No such information was available on the third comparable as to it being or not being a custom built home. A review of the data on all three comparables does not provide sufficient basis to conclude that an additional adjustment should have been made to comparable 3 assuming that it was in fact a custom built home. Comparing the three sales among themselves does not establish that the factor of custom built (assuming comparable 3 to be custom built) provides a sufficient basis to support the claim of Mr. Dzatko on this point. The fact that all of the homes were in the same comparable age of approximately 25 years may indicate that any factor of greater value for a custom built home which existed when the homes were originally built may have been rendered non-existent after 25 years.

Complainant failed to establish by substantial and persuasive evidence the value of $257,000. Respondent=s appraisal properly addressed the major condition issue and establish by a recognized and established method for appraisal of property a value of at least $285,300 for the subject property.

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 AFFIRMED.

The assessed value for the subject property for tax years 2003 and 2004 is set at $54,210.

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 11, 2004.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Hearing Officer