State Tax Commission of Missouri

 

WILBUR BURTON,                                       )

)

Complainant,                )

)

v.                                                         )           Appeal Number 07-52000

)  

CHRISTOPHER ESTES, ASSESSOR,           )

COLE COUNTY, MISSOURI,                       )

)

 Respondent.                )

 

 

DECISION AND ORDER

 

HOLDING

 

Decision of the Cole County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.  Hearing Officer finds presumptions of correct assessment not rebutted. True value in money for the subject property for tax year 2007 and 2008 is set at $91,800, residential assessed value of $17,400.

Complainant appeared pro se.

Respondent appeared in person and by Counsel, James W. Gallaher IV, Assistant Prosecuting Attorney.

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, 2007.

 

 

SUMMARY

Complainant appeals, on the ground of overvaluation, the decision of the Cole County Board of Equalization, which sustained the valuation of the subject property.  The Assessor determined an appraised value of $91,800, assessed value of $17,400, as residential property.  Complainant proposed a value of $80,000, assessed value of $15,200.  A hearing was conducted on November 27, 2007, at the Cole County Courthouse Annex, Jefferson City, 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 offered into evidence Exhibit A.  Exhibit A was compiled by Mr. Burton. The exhibit contained (1) estimated costs as to repairs and detraction in value for deferred maintenance items on the subject house; (2) summary statement on the subject property with estimate of value and photographs of the subject; and (3) photographs and sale or assessment information on four other properties on Woodridge Trail.

Mr. Burton testified in his own behalf explaining the documents contained in Exhibit A.  Exhibit A was received into evidence.  The taxpayer gave his opinion of value for the property to be $80,000.

Respondent’s Evidence

Respondent offered into evidence Exhibit 1 – Appraisal Report of Linton H. Bartlett, state certified appraiser and Exhibit 2 – Sale Comparison Chart on five comparable sales used in Exhibit 1.  Mr. Bartlett arrived at an indicated value of $92,500.  However, the opinion of value was not offered to advocate an increase in value, but in support of the $91,800 value.

Mr. Bartlett testified as to his appraisal report and the data shown on Exhibit 2.

FINDINGS OF FACT

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

2.         The subject property is located at 1714 Woodridge Trail, Missouri.  The property is identified by parcel number 48-10-05-22-2-1-017.  The property consists of .63 of an acre lot improved by a one-story, brick veneer and siding, split-foyer single-family structure.  The house was built in 1974 and is rated in fair condition by the Assessor due to various items of deferred maintenance.  The structure appears otherwise to be structurally sound.  The residence has three bedrooms, two full and a half baths, and contains 1,140 square feet of living area.  There is a full basement with 468 square feet of finished living space and a two-car basement garage.  Exhibit 1: 2,6.

3.         There was no evidence of new construction and improvement from January 1, 2007, to the date of the hearing and no new construction or improvements were planned to be completed prior to December 31, 2007.

4.         Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment and establish the true value in money as of January 1, 2007, to be $80,000, as proposed.

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 mile of the subject.  Each sale property sold at a time relevant to the tax date of January 1, 2007.  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: 8.

6.         The appraiser utilized the CAMA system in his appraisal.  The CAMA system adjusted the five comparable properties to arrive at indicated values comparing each comparable sale to the subject.  The CAMA methodology rated the subject as only fair for condition, desirability and utility to account for the items of deferred maintenance.  The CAMA system selects comparables based on geographic proximity, age, style, size and quality of the house with adjustments made uniformly based on relevant differences in the property characteristics.  Exhibit 1: 7-8.

7.         Respondent’s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2007, to be $91,800.  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.  Exhibit 1: 14-15.  An indicated value only .00763 of a percent above the value set by the Assessor and the Board is not a sufficient difference to warrant an increase in value.

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 Appeals

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).


Notwithstanding the provision of Section 138.431.3, RSMo – “There shall be no presumption that the assessor’s valuation is correct,” – 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 (Mo. 2005).  Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). 

            The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.  Snider, Hermel & Cupples Hesse, supra.

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 (Mo. banc 1993).  It is the fair market value of the subject property on the valuation date.  Hermel, supra.  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 both 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: 4-5.

Methods of Valuation

            Proper methods of valuation and assessment of property are delegated to the Commission.  It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.  See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;  Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).

Missouri courts have approved the comparable sales or market approach, the cost approach 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 Failed to Meet 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, 2007.  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).  The owner may not support an opinion of value by reference to comparable sales unless the owner qualifies as an expert.  State ex rel. Missouri Hwy. and Tr. Comm’n v. McDonald’s Corp., 872 S.W.2d 108, 113 (Mo. App. E.D. 1994); State ex rel. Missouri Hwy. and Tr. Comm’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990).

The owner’s opinion in the present appeal is based upon the sales of three properties on his street and the appraisal by the Assessor of a fourth property.  One of the sales (1702 Woodridge Trail) was of a property involved in a foreclosure action (Exhibit 1: 22; Bartlett Testimony) and therefore is not generally recognized as an appropriate sale property for appraisal purposes.  The property at 1708 Woodridge Trail had not sold and therefore reliance on the appraised value set by the Assessor was not appropriate.

It was the owner’s opinion that two of the sales which he presented (1704 and 1712 Woodridge Trial) were sales of homes which had been significantly updated and therefore could demand sale prices in 2007 of $96,500 and $96,000 respectively.  Essentially, Mr. Burton made a deduction of $16,500 and $16,000 from each sale to arrive at his proposed values of $80,000.  Mr. Burton reasoned that he had various repairs and maintenance items which would cost approximately $26,600 to repair.  He assumed that the market would not recognized the total cost for repairs, but would recognize approximately 60% of repairs in setting a value for the subject.  Very simply, the methodology advanced by the taxpayer is not a method which is accepted for the appraisal of real property. 

A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Hearing Officer “in the nebulous twilight of speculation, conjecture and surmise.”  See, Rossman v. G.G.C. Corp. Of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).  The Hearing Officer is left with speculation, conjecture and surmise as to the level of negative impact the deferred maintenance of the subject house has in comparison to the two sale properties presented by Mr. Burton.

The Hearing Office understands the Complainant’s home has a number of deferred maintenance items.  Many of these items would be naturally occurring from the subject house being thirty-three years old on the assessment date.  While the two sales Mr. Burton presented have had some up-dating, they too are essentially the same age as the subject, even though their condition would be somewhat superior to the subject.  The Hearing Officer is not persuaded that the condition difference between the subject and the two sales presented warrants a $16,000+ negative adjustment, especially in light of the other evidence in the record.

The five sale properties presented by Mr. Bartlett had an average per square foot sale price of $95.94, with a median of $90.87.  The subject’s indicated per square foot value is only $80.53.  Exhibit 2.  The indicated values of the subject for the five sale properties used by the CAMA system were $98,621, $95,298, $95,242, $87,445 and $85,798.  This results in a median indicated value of $95,242 and an average of $92,481. Exhibit 1:8. These indicated values accounted for the subject house being in only fair condition, due to its deferred maintenance, and the comparables being in average condition.  Furthermore, an analysis of sales of properties in the subject’s neighborhood from 2003 through 2007 shows that the subject’s value of $80.53 compares with the median square foot value of $89.19 or 9.8% of the median value.  Exhibit 1:22.  The Hearing Officer concludes that the Respondent’s valuation has adequately accounted for the inferior condition of the Burton house and that the market data supports a value of $91,800.

Complainant’s evidence failed to rise to the level of substantial and persuasive to establish the true value in money of $80,000.


ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Cole County for the subject tax day is AFFIRMED.

The assessed value for the subject property for tax years 2007 and 2008 is set at $17,400.

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 and an order to the Collector to release and disburse the impounded taxes.  §139.031.3 RSMo.  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 Cole 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 December 10, 2007.

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 10th day of December, 2007, to:    Wilbur Burton, 1714 Woodridge Trail, Jefferson City, MO 65109, Complainant; James W. Gallaher IV, Assistant Prosecuting Attorney, 311 E. High, Room 300, Jefferson City, MO 65101, Attorney for Respondent; Christopher Estes, Assessor, 210 Adams Street, Jefferson City, MO 65101; Marvin Register, Clerk, Cole County Courthouse Annex, Room 201, Jefferson City, MO 65101; Larry Vincent, Collector, Cole County Courthouse Annex, Jefferson City, MO 65101.

 

 

___________________________

Barbara Heller

Legal Coordinator