State
Tax Commission of Missouri
ENRIC AMBROSI, )
)
Complainant, )
)
v. ) Appeal Number 06-73000
)
ROBERT RAINES, ASSESSOR, )
MORGAN COUNTY, MISSOURI, )
)
Respondent. )
DECISION AND ORDER
HOLDING
Decision of the Morgan County Board of Equalization sustaining the assessment made by the Assessor SET ASIDE. Hearing Officer finds true value in money for the subject property for tax year 2006 to be $25,000, assessed value of $4,750.
Complainant appeared pro se.
Respondent appeared pro se.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2006, under economic conditions existing as of January 1, 2005.
SUMMARY
Complainant appeals, on the ground of overvaluation, the decision of the Morgan County Board of Equalization, which sustained the valuation of the subject property. The Assessor determined an appraised value of $102,685, assessed value of $19,510, as residential property. Complainant proposed a value of $25,000, assessed value of $4,750. A hearing was conducted on November 9, 2006, at the Morgan County Courthouse, Versailles, Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant’s Evidence
Complainant testified in his own behalf and offered into evidence the following exhibits:
Exhibit A – Topographical maps of the subject property’s location.
Exhibit B – Copy of Settlement Statement, dated 11/2/05 on the sale of the subject property for $25,000.
Exhibit C – Copy of plat for subject property.
Exhibits A, B and C were received into evidence without objection by Respondent.
Complainant offered his opinion as owner of the true value in money (fair market value) of $25,000 based upon his November 2005 purchase of the property.
Respondent’s Evidence
Respondent testified in support of his original valuation and offered into evidence his appraisal report – Exhibit 1. Exhibit 1 consisted of the following documents: (1) Six (6) photographs of the structure and concrete foundation on the property; (2) aerial photograph of the subject property and a sale property used by Respondent in his valuation, with sales letter and property record card (PRC) for the sale property; (3) statement on sales analysis for subject property; (4) sales grid on four sale properties; (5) aerial photographs and sales letters on four sale properties; (6) copy of warranty deed for sale property, dated November 2, 2005 and copy of settlement statement (Exhibit B).
FINDINGS OF FACT
1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the Morgan County Board of Equalization.
2. The subject property is located at 31460 Red Arrow Road, Rocky Mount, Missouri. The property is identified by locator number 21-5-16-000-005-003-000. The property consists of an irregular lot which is 510.7 feet along Red Arrow Road, 177 feet along one end, 650 feet along the lake shore and 243.5 feet along the other end, containing 2.45 acres, more or less. The property is divided into Lots 30 through 38, and an unnumbered lot adjacent to and West of Lot 30. Exhibit C & Exhibit 1 – aerial photograph of subject, with subject outlined in red by Respondent and warranty deed. The property is improved with a shed type structure and a poured concrete foundation. The improvements were on the property at the time of Complainant’s purchase in November 2005. Exhibit 1 – photographs of subject; Testimony of Complainant and Respondent. The subject property has extremely steep frontage on the lake and would require major excavation to provide lake access. Testimony of Complainant and Respondent.
3. There was no evidence of new construction and improvement from January 1, 2005, to January 1, 2006.
4. The subject property was subdivided in 1974, none of the lots have been sold since the property was subdivided. The property is known by Complainant to have been for sale either as an entire tract or individual lots for at least 15 years. The property was not listed by a realtor at the time Complainant purchased it. The asking price was $60,000. Complainant offered $19,000. Respondent reduced the price to $45,000. Complainant offered $25,000 and
that offer was accepted. Complainant’s Testimony. The purchase price of $25,000 on
November 2, 2005 was not disputed by Respondent. Respondent’s Testimony.
5. Complainant presented substantial and persuasive evidence to rebut the presumptions of correct assessment and establish fair market value as of January 1, 2005, for the 2006 tax year to be $25,000. Exhibit B, Warranty Deed, Complainant’s Testimony.
CONCLUSIONS
OF LAW AND DECISION
Jurisdiction
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.
Presumptions in Appeal
The Supreme
Court of Missouri has held, “A tax assessor’s valuation is presumed
correct.” Snider v. Casino
Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341 (
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 (
The presumptions in favor of the Assessor and the Board are 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 Assessor and the Board is accepted as true only until and so long as there is no substantial evidence to the contrary.
The
presumption of correct assessment is rebutted when the taxpayer presents
substantial and persuasive evidence to establish that the Assessor’s or Board’s
valuation is erroneous and what the fair market value should have been placed
on the property. Snider, Hermel &
Cupples Hesse, supra. The evidence
presented by Complainant of the actual sale price at a time relevant to January
1, 2005, is substantial and persuasive to rebut both presumptions and establish
the fair market value to be $25,000.
Standard for Valuation
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 (
Market Value
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 are 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.
Respondent asserted his opinion that while he had no reason to doubt that Mr. Ambrosi paid $25,000 for the subject property, he did doubt that the November 2005 sale was an arm’s-length transaction. Respondent testified that notation had been made on the property record card (PRC) that the property had been on the market for $60,000 in 1986. There was no further verification as to this information. Respondent further testified that the PRC showed a sale in 2003 with an indication of a $78,000 sale price. No verification was provided for this information. Respondent’s Testimony.
It was the position of Mr. Raines that in order for a sale to be an arm’s-length sale and therefore reflective of fair market value that both parties had to be informed of the market. He asserted that the November 2005 sale of the subject did not meet the characteristics of a willing seller and willing buyer. A review and analysis of the sale in this case is therefore warranted.
The initial inquiry in analyzing Mr. Ambrosi’s purchase of the property which is the subject of this appeal whether the transaction was in a 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? There is no claim that the sale of the subject was not in a competitive and open market. There is no evidence to establish that there existed any special relationship between the seller and buyer which would render the sale less than arm’s-length.
The fact that the property was not listed with a realtor, but was simply offered for sale by the owner does not take the actual sale out of the definition of being in a competitive and open market. This is especially true given the fact that the property has been subdivided into lots for over 30 year prior to the tax date and it is has not been possible to sell any of the lots or the entire tract. The testimony of Mr. Raines as to a 2003 sale was not established by a deed showing a transfer. A note on the PRC of a $78,000 sale price falls short of establishing that the property did in fact sell or sell for that amount.
The next point of analysis involves the three elements of (1) acting prudently, (2) knowledge and (3) undue stimulus. Essentially the argument put forth by the Assessor involves his assertion or belief that given sales data to which the Assessor was privy but neither the seller nor buyer had access to, neither were knowledgeable of the going price for lots similar to the subject. Therefore, under the Raines’ argument Mr. Kelley (seller – Exhibit B & Exhibit 1) and Mr. Ambrosi did not act prudently because there were not knowledgeable of the real value of the subject property.
The Hearing Officer is not persuaded by the line of reasoning advanced by the Assessor. Following that to a logical conclusion, in order for any sale to be deemed to be one between knowledgeable and prudent parties, there would have to be evidence that both did or had done market analysis prior to entering into negotiations. This is not only unreasonable for a property like the subject it goes beyond what is common knowledge as to how sale prices are established for properties like the subject or most other properties.
It has been the
experience of the Hearing Officer over 15 years of rendering decisions in more
than 1,100 appeals for the Commission involving in excess of 3,300 properties
that sellers and buyers seldom if ever do any detailed market analysis prior to
commencing negotiations. The only major
exception being improved residential properties in which a real estate agent
may provide a list of recent sales or listings in the sale property’s general
neighborhood. The subject property does
not fit into such a category. It is most
likely that had the property been listed with a realtor that the asking price
would simply be what the seller set, not what a realtor’s sales review might
indicate. The evidence in this appeal
failed to establish that a sufficient number of sales or listings of
substantially similar properties were not readily available to either the buyer
or seller or to a real estate agent in November 2005. Furthermore, the fact of a sale establishes a
presumption that the transaction constituted a market transaction. A price agreed to between a willing buyer and
seller creates a presumption that the transaction was a market
transaction. Phoenix Redevelopment
Corporation v.
There is no evidence regarding the sale in this instance which suggests it was anything other than a market transaction. There is no assertion or evidence to suggest that Mr. Ambrosi or the seller was acting under undue stimulus when the sale price of $25,000 was agreed to. An assertion that the Seller was simply unloading the property is speculation and conjecture, neither of which will support the Hearing Officer rejecting the sales evidence from the 2005 transaction.
The Hearing Officer is persuaded that given the facts and the applicable law (See, Phoenix Redevelopment and St. Joe Mineral, supra) that the November 2005 transaction constituted an arm’s-length sale by meeting the elements of market value as set forth above.
Complainant’s Burden of Proof
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, 2005. 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 (
Mr. Ambrosi has met his burden of
proof in this appeal. 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
Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time. The actual sale price is a method that may be considered for estimating true value. The actual sales price, between a willing seller who is not obligated to sell and a willing buyer who is not compelled to buy, establishes an outer limit on the value of real property. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526 (App. E.D. 1993).
The actual sale price in this case involves a voluntary purchase. The purchase date of November 2, 2005, is not too remote in time. When an appeal is made for an even number tax year, the Hearing Officer is to establish value as of January 1st of the even-numbered year, but under the economic conditions which existed on January 1st of the preceding odd-numbered year. §137.115.1, RSMo. A sale just ten months after tax date is a timely sale for determining value in the present appeal. The purchase of the subject property by Mr. Ambrosi set the outer limit of the value of the subject property for the 2006 assessment.
The Hearing Officer has reviewed in detail and considered Exhibit 1. Given that the November 2005 transaction was under the facts and applicable law a sale between a willing buyer and seller meeting the criteria of a market sale it rebuts any conclusions which might otherwise be drawn from Exhibit 1 in the absence of the actual sale.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Morgan County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax year 2006 is set at $4,750.
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 2000.
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 Morgan 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 November 21, 2006.
STATE TAX COMMISSION OF MISSOURI
_____________________________________
W. B. Tichenor
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 21st day of November, 2006, to: Enric Ambrosi, P.O. Box 2089, Lake Ozark, MO 65049, Complainant; Marvin Opie, Prosecuting Attorney, Morgan County Justice Center, Versailles, MO 65084, Attorney for Respondent; Robert Raines, Assessor, 100 East Newton, Versailles, MO 65084; Cathy Daniels, Clerk, 100 East Newton, Versailles, MO 65084; Clark Hunter, Collector, P.O. Box 315, Versailles, MO 65084.
___________________________
Barbara Heller
Legal Coordinator