State Tax Commission of Missouri

 

GANTT W. MILLER,                         )

)

Complainant,                )

)

v.                                                         )           Appeal Number 07-10147

)         

PHILIP MUEHLHEAUSLER, ASSESSOR,   )

ST. LOUIS COUNTY, MISSOURI,               )

)

 Respondent.                )

 

 

DECISION AND ORDER

 

HOLDING

 

Decision of the St. Louis County Board of Equalization reducing 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 years 2007 and 2008 is set at $950,000, residential assessed value of $180,500.

Complainant appeared pro se.

Respondent appeared by Associate County Counselor, Paula Lemerman.

Case heard and decided by Hearing Officer Maureen Monaghan.

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 St. Louis County Board of Equalization, which reduced the valuation of the subject property.  The Assessor determined an appraised value of $1,367,700, assessed value of $259,870, as residential property.  The Board reduced the value to $950,000, assessed value of $180,500.  Complainant proposed a value of $400,000, assessed value of $76,000.  A hearing was conducted on May 29, 2008, 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’s Evidence

Complainant testified in his own behalf.  He stated his opinion of value for the property under appeal to be $400,000 due to the regular flooding and water damage that occurs to his home.  The Complainant completed a large addition to the property.  It is believed that the addition was completed prior to January 1, 2007.  The Complainant did not know how many rooms or bathrooms were included in the addition; he did know that it had an elevator.  The Complainant estimated the cost of the addition at $300,000.  He acted as his own contractor and his family did much of the work.  Included in the new construction was a trench drain to help address the water issue although water still enters his house, the water is draining from his property more quickly.

The Complainant offered the following documents as exhibits:

Exhibits A-P:    Photographs of the subject property.  The photographs include the water damage to the basement of the home.  The paneling and terrazzo floor has suffered from water entering the home.  The photographs also show standing water in the backyard and the path of the water through his property.  The water runs off the neighboring properties to his property towards his garage doors and basement. 

Exhibit R:          Map of the Subdivision showing the flow of water. 

Exhibit Q:         Map of the Subdivision showing sewage and drainage.

            Mr. Steven Rush testified on behalf of the Complainant.  Mr. Rush is an engineer with twenty-two years of experience primarily working in civil engineering for site developments, sewers and grading.  Mr. Rush testified that the storm water problems suffered by the subject property will only be corrected through major work by the county.  The problem is that a 12 inch storm water drainage line ties into an 8 inch combined system line and the system is overwhelmed when there is a large amount of rain. 

Respondent’s Evidence

Respondent placed into evidence the testimony of Mr. Ross Hackman, Missouri State Certified Residential Real Estate Appraiser.  The appraiser testified as to his appraisal of the subject property.  The Appraisal Report (Exhibit 1) of Mr. Hackman was received into evidence.  Mr. Hackman arrived at an opinion of value for the subject property of $1,180,000 based upon a sales comparison approach to value.  In performing his sales comparison analysis, the appraiser relied upon the sales of five properties which he deemed to be comparable to the subject property. 

FINDINGS OF FACT

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 101 Lake Forest Drive, Richmond Heights, Missouri.  The property is identified by locator number 20K640213.  The property consists of .45 acre lot improved by a two-story, brick, single-family structure of good quality construction.  The house was built in 1935 with a large addition added in 2006.  The residence appears to be in average condition.  The residence has a total of fifteen rooms, which includes four bedrooms, six full baths and two half baths, and contains 5,348 square feet of living area. There is 416 square feet of finished attic space, a basement and a two-car garage. 

3.         There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.

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, 2007, to be $400,000.

5.         The properties relied upon by Respondent’s appraiser in performing his appraisal were comparable to the subject property. Three properties were located within .23 of a mile or less to the subject; the remaining properties were located within 1.75 miles of the subject property.  Each sale property sold at a time relevant to the tax date of January 1, 2007, in a range from January 2005 to June 2006.  The sale properties were similar to the subject in style, quality of construction, age, location, site size and other amenities of comparability.

6.         The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.  All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.  The net adjustments ranged from -2.4% to 4.5%; the gross adjustments ranged from 16.7-21.9%.  This level of adjustment as a percentage of the sales prices is acceptable. 

7.         Due to the drainage issues, the appraiser gave no contributory value to the basement and determined the property was in average condition rather than good condition.  The appraiser also adjusted the comparable properties downward even though their lots were smaller than the subject property due to the standing water issues on the subject property.

8.         The adjusted sales prices for the comparables ranged from $1,087,800 to $1,271,000.  The appraiser concluded on a $1,180,000 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.

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.  Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341 (Mo. 2005); 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 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.  As is discussed below, Complainant has failed to present substantial and persuasive evidence upon which the Hearing Officer can conclude the fair market value of the subject property to have been $400,000 on January 1, 2007.

 

 

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.

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).

            The Hackman appraisal follows an accepted approach to value, the sales comparison methodology.  Therefore, the conclusion of value presented by the appraiser is based upon an approach that is followed by the Commission in making determinations of value in appeals.  In point of fact, generally the sales comparison approach represents the strongest methodology for the valuation of an owner occupied home, provided there is sufficient relevant sales data.  In this instance, Respondent’s sales data was clearly relevant and persuasive to establish value. 

 

 

Complainant Fails 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).  Mr. Miller’s opinion of fair market value of $400,000 has no market basis and is not persuasive.  Although, the subject property has condition issues given the drainage runoff to the property,  Mr. Miller spent $300,000 adding additional square footage to the property.     

Complainant failed to meet his burden of proof to present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board and establish the true value in money for his property.   

 

ORDER

The assessed valuation for the subject property as determined 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 2007 and 2008 is set at $108,500.

Complainant 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.

Any application for review must be mailed to the Commission at:  State Tax Commission, P. O. Box  146, Jefferson City, MO 65102-0146, and a copy mailed to the Attorney for Respondent, the Assessor and the Collector at the address given below in the Certificate of Service.

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 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. 


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 5, 2008.

STATE TAX COMMISSION OF MISSOURI

 

 

_____________________________________

Maureen Monaghan

Hearing Officer

 

 

 

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 5th  day of June, 2008, to:     Gantt Miller, 101 Lake Forest Drive, Richmond Heights, MO 63117, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Philip A. Muehlheausler, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.

 

 

 

___________________________

Barbara Heller

Legal Coordinator