WALTER BESCH,	)
	)
Complainant,	)
	)
v.	)		Appeal Number 03-10184
	)
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 $130,000, assessed value of $24,700.

Complainant 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 reduced the valuation of the subject property. The Assessor determined an appraised value of $131,200 (assessed value of $24,930, as residential property). The Board reduced the value to $128,800 (assessed value of $24,470. Complainant proposed a value of $117,000 (assessed value of $22,230). A hearing was conducted on April 20, 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. Besch testified to the fact that the subject lot slopes and there is surface water drainage over the subject from other properties. Mr. Besch also questioned the value placed on the subject=s land by the County. Mr. Besch offered his opinion of value of $117,000. This value was arrived at by taking the 2001 value determined by the Assessor ($114,000) and applying a Consumer Price Index cost of living of 3.5% for the two year period of 2001 and 2002.

The following exhibits were offered into evidence by the Complainant.

Exhibit A 7 photographs of the subject property.

Exhibit B 3 listings from the Internet as to vacant tracts of land for sale.

Exhibit C Bid for installing piering for the subject house.

Exhibit D Bid for installing piering for the subject house.

Exhibit A was received into evidence. Counsel for Respondent objected to Exhibits B, C and D on grounds of relevancy, hearsay and lack of foundation. Objections were sustained, Exhibits B, C and D were excluded from evidence. See, DECISION, infra.

Respondent placed into evidence the testimony of Mr. John Rebsamen, 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 $130,000 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 37 Raintree Court, Fenton, Missouri. The property is identified by locator number 28O610456. The property consists of .28 of an acre lot improved by a split foyer frame single-family structure of average quality construction. The house was built in 1972 and appears to be in average condition. The residence has a total of seven rooms, which includes three bedrooms, two full baths, and contains 1,406 square feet of living area. The basement has approximately 190 square feet of living area and there is a two-car front entry garage in the basement level. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2003. The site is sloping downward to the front and is considered to be below average for other lots in the neighborhood.

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 $117,000.

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 .20 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.

6. The comparables were described as follows:

Comparable 1 (39 Raintree Court - next door north to the subject) sold in January 2002 for $139,900. This property consists of a .31 of an acre lot improved by a split foyer frame single-family structure of average quality construction. The house was built in 1986 and appears to be in average physical condition. The residence has a total of six rooms, which includes three bedrooms, two full baths, and contains 1,466 square feet of living area. There is a full basement, which has 350 square feet of living area. There is a two-car front entry garage. The lot is mostly level, but suffers from some of the same front sloping topography as the subject.

Comparable 2 (17 Buckwood Court - .20 of a mile southwest of the subject) sold in August 2001 for $149,900. This property consists of a .23 of an acre lot improved by a one-story masonry single-family structure of average quality construction. The house was built in 1965 and appears to be in average physical condition. The residence has a total of six rooms, which includes three bedrooms, two full baths, and contains 1,335 square feet of living area. There is a full basement, which has 700 square feet of living area. There is an attached one-car garage.

Comparable 3 (10 Elderwood Court - .17 of a mile southwest of the subject) sold in January 2001 for $160,000. This property consists of a .56 of an acre lot improved by a split foyer masonry single-family structure of average quality construction. The house was built in 1967 and appears to be in good physical condition. The residence has a total of seven rooms, which includes three bedrooms, three full baths, and contains 1,500 square feet of living area. There is a full basement, which has 540 square feet of living area. There is a two-car rear entry basement 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. In particular an adjustment was made to Comparables 2 and 3 to account for their superior lot topography. No adjustment for these factor was necessary to Comparable 1 as it shares the subject=s general topography.

8. The net adjustments for Comparable 1 amounted to -$9,600 or 6.86% of the sales price. The net adjustments for Comparable 2 amounted to -$15,100 or 10.07% of the sales price. The net adjustments for Comparable 3 amounted to -$25,00 or 15.63% of the sales price.

9. The adjusted sales prices for the comparables calculated to $130,300, $134,800 and $135,000, respectively. The appraiser concluded on a $130,000 value which calculated to a value per square foot of $92.46 compared with the sales prices per square foot of living area for the comparables of $96.75, $112.28 and $106.67.

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 $130,000.

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 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 1994, 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, Complainant 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).

Complainant=s opinion of value was based on a very simple and straightforward mathematical calculation. The Consumer Price Index of 3.5% as determined by Mr. Besch was applied to the prior appraised value determined by the Assessor for 2001. This amount of the dollar increase was then added to the 2001 valuation and rounded down to $117,000 by the Complainant ($114,000 x .035 = $3.990 = $117,990, rounded to $117,000).

While this is a very easy to understand procedure for arriving at a value, it has no probative value in an appeal before the Commission. Applying of the CPI or other derived percentages to prior Assessor=s valuations is not a methodology for the valuation of property that is recognized by the courts of this state or by the Commission. There is no presumption that the 2001 appraised value set by the Assessor accurately reflected the fair market value of the subject property as of January 1, 2001. Any opinion of value derived from such a methodology as employed by Mr. Besch is not based upon proper elements and a proper foundation and therefore can be given no probative weight in an evidentiary hearing.

Exhibit B, listing of three tracts land offered for sale, was excluded because in addition to a hearsay problem with such documents, there was no foundation properly established as to how the value of the subject property should be adjusted, if at all based on this information. Although the assessment notices provided by the Assessor divide the assessment between land and the improvements on the land (generally the house, garage, driveways, etc.), the valuation of real property before the Commission is not broken down into these elements. The issue before the Commission is not whether the land value is too low or too high. The issue is what a willing buyer and seller would agree to as a sales price for the property as it sat on January 1 of the relevant tax year.

The three data sheets did not contain sufficient information to establish that these properties were proper comparable to the subject for establishing its land value. Complainant was not shown to have sufficient training, education and experience in the appraisal of real property to make an appropriate appraisal of the subject site relying on these listings. In point of fact the appraisal of Mr. Rebsamen established that a cost approach to value was not performed due in part to the difficulty in establishing reliable land values.

When information such as that contained in listing sheets or even sales data sheets is offered as evidence in an appeal, it is the responsibility of the party offering same to establish the appropriate foundation for its admission into evidence. Part of that foundation is to tie up and demonstrate through a methodology generally recognized by the appraisal industry how the documents support a determination of value derived under an accepted appraisal approach. In other words, it is not sufficient to offer to the Hearing Officer a stack of listings or MLS sales data sheets without tying same to an appraisal methodology. The Hearing Officer is not required to perform an appraisal on behalf of either party based upon raw sales data. Complainant did not assert that the value which he offered relying on a CPI calculation should be reduced by any certain value based upon the land sales data. The documents were not shown to have relevance to the issue of fair market value of the subject tract.

These two exhibits were bids for piering along two walls of the subject house. They were excluded from evidence because it was establish in voir dire by Counsel for Respondent that no engineer had inspected and advised such work. Apparently the subject house has been in the same condition for 15 to 18 years according to Complainant=s testimony. The taxpayer=s insurance company had not advised this work be done. Quite simply it was not established that such work was required to be done.

Ordinarily, bids for needed repairs and work on deferred maintenance are received into evidence based upon the general exception to the hearsay rule that repair bids are more probative on the point for which they are offered than other evidence which the taxpayer can procure through reasonable efforts. It would not generally be practical for taxpayers to have to bring into an evidentiary hearing two or three contractors to testify as to the cost for needed repairs to a home. The Commission is not going to burden Complainants in the presentation of their case in that manner. Furthermore, the general interests of justice will best be served by admission of repair bids into evidence.

However, in this instance the taxpayer did not establish that this was any type of deferred maintenance that needed to be performed. Respondent=s appraiser did not note any cracking or settling that would require the piering work represented by the proffered bids. Mr. Rebsamen=s testimony was to the effect that no such condition had been pointed out to him by the Complainant at the time of his inspection of the property. The bids were only obtained a week to ten days prior to the evidentiary hearing, thus appearing to have been secured only for the purpose attempting to add some cost for repair to reduce the value of the home. Furthermore, Complainant did not utilize these in any form in arriving at his opinion of value based upon his CPI calculation. In other words, there was no deduction from his calculated value of $117,000 for the estimated cost of repair or what the market would recognize had such repair had been performed.

The Rebsamen appraisal report provided substantial and persuasive evidence to rebut the presumption of correct assessment by the Board and establish the value of $130,000. The sales comparables were all in very close proximity to the subject. The fact that the next door property which suffers from the same topography had recently sold provided a good indicator of value which would account for this factor. The adjustments required to this comparable were minimal. The concluded value of $130,000 was well supported by the sale comparison approach.

Complainant=s proffered opinion of value was not based upon an appropriate method for valuation of real property. Complainant failed to met his burden of proof. Respondent=s proffered opinion of value was well supported under the most appropriate approach to value generally for single family residential property. The Board=s determination of value was rebutted by Respondent=s evidence. Fair market value for January 1, 2003 is set at $130,000.

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 $24,700.

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 April 29, 2004.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Hearing Officer