John & Gretchen Vollmer v. Jake Zimmerman, Assessor St. Louis County

September 20th, 2016

STATE TAX COMMISSION OF MISSOURI

 

JOHN T. & GRETCHEN VOLLMER )
)
Complainants, )
)
v. ) Appeal No. 15-13451
)
JAKE ZIMMERMAN, ASSESSOR )
ST. LOUIS COUNTY, MISSOURI, )
)
Respondent. )

 

ORDER AFFIRMING HEARING OFFICER DECISION

On September 20, 2016, Senior Hearing Officer Amy Westermann (Hearing Officer) issued her order setting aside the St. Louis County Board of Equalization (BOE).  Respondent originally set a true market value (TMV) on the subject property at $511,800. The BOE lowered the TMV of the subject property to $278,700.   The Hearing Officer found that Complainant failed to present substantial and persuasive evidence demonstrating market value but that Respondent presented substantial and persuasive evidence to further lower the TMV of the subject property to $270,000.  Complainant subsequently filed an Application for Review of the Decision with the State Tax Commission (the Commission).  Respondent did not file a Response and Complainant submitted no further pleadings.

Standard Upon Review

A party subject to a Decision and Order of a Hearing Officer with the State Tax Commission may file an application requesting the case be reviewed by the Commission.  The Commission may then summarily allow or deny their request.  The Commission may affirm, modify, reverse or set aside the decision.  The Commission may take any additional evidence and conduct further hearings.

Complainant’s Application for Review/ Appeal Brief

Within 30 days of issuance of a decision by a Hearing Officer, a party may request the Commission review the decision.  Section 138.432 RSMo.  Complainant requested a review by the Commission. Complainant’s request focuses on the zip codes of three of four of Respondent’s appraiser’s comparables, the fact that comparables were not utilized from other zip codes, historical ratios and various statistics regarding certain zip codes overall.

DISCUSSION AND RULING

The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact. Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com’n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).

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).

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).   It places the burden of going forward with some substantial and persuasive evidence on the taxpayer.  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. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

The subject property consists of a 7 acre residential lot improved by a 2,445 square foot, single-family, ranch-style home built in 2000 which includes one bedroom above grade; one full bathroom and one half bathroom above grade; a full basement with 1,800 square feet of finished area that includes a recreation room, three bedrooms, and three full bathrooms; a two-car attached garage; two fireplaces; a deck; a patio; and a pool.  The exterior consists of aluminum and vinyl construction.

Complainant’s evidence was neither substantial nor persuasive to rebut the St. Louis County Board of Equalization valuation.  Complainant did not present substantial and persuasive evidence as to the TMV of the subject property.  Complainant’s evidence consisted of testimony of real estate brokers testifying as to the negative features of the property.  The negative features include the size of the lot and the property being on a private road needed substantial improvements.  There was no testimony as to the impact of such features on the market value.  There was also testimony regarding properties around the subject property.  General information regarding a market or other properties surrounding a subject property does not constitute substantial and persuasive evidence.  Furthermore, in light of Respondent’s appraisal evidence, Respondent’s evidence outweighs that of Complainant.

The Certified Residential Appraiser for Respondent opined that the TMV of the subject property as of January 1, 2015, was $270,000 which value was below the TMV attributed to the property by the St. Louis County Board of Equalization.  The Appraiser utilized the sales comparison approach to arrive at his opinion of value by utilizing four comparable properties that had sold within two years of January 1, 2015.  The sale prices of the comparables ranged from $275,000 to $315,000.  Comparable No. 4 was in the same neighborhood as the subject property and was utilized by Respondent’s appraiser as a “control”.  The Appraiser made market based adjustments to the comparable properties for location; square footage; the number of bedrooms and bathrooms above grade; the amount of finished square footage in the basements; the number of bedrooms and bathrooms below grade; the size of the garage; patios and screened porches; the number of fireplaces; exterior construction; and whether the comparable properties included a pool.  Respondent offered the appraisal despite the fact that Respondent was under no burden to do so.  Complainant reaped the benefit of such appraisal as such appraisal lowered the TMV established by the St. Louis County Board of Equalization which would have been affirmed but for Respondent’s appraisal.

Complainant failed to state any facts which tend to demonstrate that the decision of the Hearing Officer was erroneous, arbitrary, capricious, an abuse of discretion, unreasonable or contrary to Missouri law.  After a review of the record, the Commission finds that Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the St. Louis County Board of Equalization.  The Respondent presented substantial and persuasive evidence to lower the TMV determined by the St. Louis County Board of Equalization.

ORDER

The Decision and Order of the Hearing Officer, including the findings of fact and conclusions of law is AFFIRMED. It is incorporated by reference, as if set forth herein verbatim, in full, in this final decision of the Commission.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the mailing date set forth in the Certificate of Service for this Order.

If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8, RSMo.

If no judicial review is made within thirty 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.

SO ORDERED this 20th day of December, 2016.

 

STATE TAX COMMISSION

 

Bruce E. Davis, Chairman

 

 

Victor Callahan, Commissioner

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 20th day of December, 2016, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.

Jacklyn Wood

Legal Coordinator

 

Contact Information for State Tax Commission:

Missouri State Tax Commission

301 W. High Street, Room 840

P.O. Box 146

Jefferson City, MO 65102-0146

573-751-2414

573-751-1341 Fax

 

 

STATE TAX COMMISSION OF MISSOURI

 

JOHN T. & GRETCHEN L. VOLLMER, )
)
Complainants, )
)
v. ) Appeal No. 15-13451
)
JAKE ZIMMERMAN, ASSESSOR )
ST. LOUIS COUNTY, MISSOURI, )
)
Respondent. )

 

DECISION AND ORDER

 

HOLDING

 

The assessment made by the Board of Equalization of St. Louis County (BOE) is SET ASIDE.  Complainants John T. and Gretchen L. Vollmer (Complainants) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.  Respondent Jake Zimmerman, St. Louis County Assessor, (Respondent) presented substantial and persuasive evidence to rebut the BOE’s valuation and to establish the true market value of the subject property as of January 1, 2015.

Complainant John T. Vollmer appeared pro se; Complainant Gretchen L. Vollmer appeared not.

Respondent appeared by Steven Robson, Assistant County Counselor.

Case heard and decided by Senior Hearing Officer Amy S. Westermann.

ISSUE

Complainant appealed on the ground of overvaluation.  Respondent initially set the true market value (TMV) of the subject property, as residential property, at $511,800.  The BOE lowered Respondent’s valuation to $278,700.  The Commission takes this appeal to determine the TMV of the subject property on January 1, 2015.

The Senior Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

FINDINGS OF FACT

  1. Jurisdiction. Jurisdiction over this appeal is proper.  Complainant timely appealed to the State Tax Commission.
  2. Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on June 15, 2016, at the St. Louis County Government Administration Building, 41 South Central Avenue, Clayton, Missouri.
  3. Identification of Subject Property. The subject property is identified by parcel/locator number 07G110253.  It is further identified as 4252 Alderwood Dr., Black Jack, Missouri.  (Complaint; Exhibit 1)
  4. Description of Subject Property. The subject property consists of a 7 acre residential lot improved by a 2,445 square foot, single-family, ranch-style home built in 2000.  (Exhibit 1)  The subject property includes one bedroom above grade; one full bathroom and one half bathroom above grade; a full basement with 1,800 square feet of finished area that includes a recreation room, three bedrooms, and three full bathrooms; a two-car attached garage; two fireplaces; a deck; a patio; and a pool.  The exterior consists of aluminum and vinyl construction.  (Exhibit 1)
  5. Assessment. Respondent set a TMV on the subject property at $511,800 residential, as of January 1, 2015.
  6. Board of Equalization. The BOE lowered Respondent’s TMV of the subject property to $278,700.
  7. Complainant’s Evidence. Complainant testified in his own behalf.  Complainant testified that he had purchased the subject property in 2005 or 2006 for approximately $445,000.  Complainant testified that the subject property was encumbered by a mortgage of approximately $270,000.  Complainant testified that the subject property had not been listed for sale or appraised within the three years preceding the Evidentiary Hearing, that he had not received any offers to purchase the subject property but that he would place an asking price of $300,000 on the subject property if he listed it for sale.  Complainant testified that he had not made improvements to the subject property between January 2013 and January 2015.  Complainant testified that finding comparables to the subject property had been challenging.  Complainant testified that the subject property was situated on a private road that had been built to extend beyond the cul-de-sac in an existing subdivision.  The private road divided the subject property from a neighboring property, both of which had been built for a former NFL football player and some of his family members.  Maintenance of the private road was the shared responsibility of the subject property and the neighboring property.  Complainant testified that his opinion of the subject property’s TMV as of January 1, 2015, was $220,000.

Complainant offered the testimony of his witness, Stafford Manion (Witness).  Witness testified that he was a real estate broker with 36 years of experience.  Witness testified that the subject property represented the most extreme case of an idea for a real estate development “gone bad.”  Witness testified that the subject property had aged badly and that the private road leading to the subject property would need to be replaced.  Witness testified that the cost of replacement would be borne by only two homeowners who were serviced by the road.  Witness further testified that the subject property suffered from a “huge detriment” in that it consisted of seven acres.  Witness testified that the subject property backed to 40 vacant homes, which hurt the TMV of the subject property.  Witness further testified that the illegal dumping of trash near the subject property and the fact that it was located in a particular zip code in North St. Louis County also detracted from its value.  On cross examination, Witness testified that he had not brought along any market research to support his testimony but that, based upon his years of experience in real estate and upon his personal experience owning real estate, a potential buyer would find replacing the private road and maintaining the seven acres to be cost prohibitive.

Complainant offered as evidence to support his opinion of value (1) a table showing the subject property and four comparable properties[1] (Exhibit A1); (2) nine photographs showing the vacant lot located next to the subject property and damage to both interior of the residence and to the driveway and the land of the subject property (Exhibit A2); (3) a map of median home values by zip code of the areas surrounding the subject property (Exhibit A3).   Comparable No. 5 was in the subdivision at the entrance to the subject property’s neighborhood and Comparable No. 2 was in the same neighborhood as the subject property.  (Exhibit A1)  Complainant testified that Comparable No. 2 was most similar to the subject property because it had been built by the same builder but that Comparable No. 2 had been built to a higher standard.  Both the subject property and Comparable No. 2 contained a total of four bedrooms, a total of four full bathrooms, and a total of one half bathroom; however, the subject property contained 2,445 square feet of living area while Comparable No. 2 contained 4,613 square feet of living area.  Comparable No. 2 consisted of 7.11 acres compared to the subject property’s 7.0 acres.  (Exhibit A1)  Complainant testified that Comparable No. 2 had sold in January 2013 for $315,000.  Complainant testified that Comparable No. 5 was the nearest next door neighbor to the subject property.  Complainant testified that Comparable No. 5 had sold approximately eight years before the date of the evidentiary hearing for approximately $200,000.  Complainant testified that the 1,385 square foot residence had been damaged by fire in September 2013 and was subsequently torn down in January 2016.  (Exhibit A1)  Exhibit A included estimates of potential sale prices for the comparables, which Complainant had obtained from Zillow.com.  According to the estimates, as of March 6, 2015, the potential sale price of the subject property was $228,178.  The estimated potential sale price of Comparable No. 2 was $395,887; of Comparable No. 3 was $381,180; and of Comparable No. 4 was $182,479.  The estimated potential sale price of Comparable No. 5 was not listed.

Respondent objected to Exhibits A1 and A2 for lack of relevance and objected to Exhibit A3 for lack of foundation.  The Senior Hearing Officer overruled the objections and received the exhibits to be given the weight deemed necessary when viewed in context with all of the evidence.

  1. Respondent’s Evidence. Respondent offered as evidence the testimony of Missouri State Certified Residential Real Estate Appraiser Mark Stuart (Appraiser) along with the Appraiser’s report (Exhibit 1).  The Appraiser opined that the TMV of the subject property as of January 1, 2015, was $270,000.[2]  The Appraiser testified that he had utilized the sales comparison approach to arrive at his opinion of value.  The Appraiser testified that he had chosen four comparable properties that had sold within two years of January 1, 2015.  The sale prices of the comparables ranged from $275,000 to $315,000.  The Appraiser made adjustments for the terms of the sales.  Comparable No. 1 was a Veteran’s Administration financed sale; Comparable No. 2 was a Government Sale; Comparable No. 3 was a cash sale; and Comparable No. 4 was a Bank Sale.  (Exhibit 1)

Only Comparable No. 4 was in the same neighborhood as the subject property.  The other comparables ranged between 2.20 miles and 4.89 miles from the subject property.   The Appraiser testified that he had compared properties over one mile from the subject property because the neighborhood surrounding the subject property contained mostly smaller ranch style homes of lesser quality construction than the subject property.  The Appraiser further testified that he had use Comparable No. 4 as a “control” for the subject property’s neighborhood and would not have even used Comparable No. 4 under other circumstances.

The Appraiser viewed only portions of the exterior of the subject property, which appeared to be consistent with the C4 rating for condition.  The Appraiser made market based adjustments to the comparable properties for location; square footage; the number of bedrooms and bathrooms above grade; the amount of finished square footage in the basements; the number of bedrooms and bathrooms below grade; the size of the garage; patios and screened porches; the number of fireplaces; exterior construction; and whether the comparable properties included a pool.  (Exhibit 1)   The adjusted sale prices of the comparables ranged between $242,200 and $295,900.  (Exhibit 1)

Complainant objected to the admission of Exhibit 1 on the ground that it lacked foundation given that it had been based on comparables in higher priced areas.  Respondent counter argued that Exhibit 1 had been prepared by an expert in real estate appraisal, who testified as to the method for arriving at his opinion of value.  The Senior Hearing Officer overruled the objection, and the Appraiser’s Report was received into the record.

On cross examination, the Appraiser testified that properties located in different zip codes than the subject property would be priced differently but that the lack of comparables within the same zip code made it necessary to review properties farther away.  The Appraiser acknowledged that the subject property’s seven acres did not add anything to the overall value of the subject property.  The Appraiser further testified that, in the appraisal of real estate, it is typical to go outside a subject property’s neighborhood to value an “outlier” property.

  1. Presumption of Correct Assessment Rebutted – Value Established. The evidence presented by Respondent was substantial and persuasive to both rebut the presumption of correct assessment by the Board and to establish the fair market value of the subject property to be $270,000, assessed (residential) value of $51,300.

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, including the application of any abatement.  The Senior 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.  Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo

Basis of Assessment

The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass.  Article X, Sections 4(a) and 4(b), Mo. Const. of 1945.  The constitutional mandate is to find the true value in money for the property under appeal.  By statute, real property and tangible personal property are assessed at set percentages of true value in money:  residential property at 19%; commercial property at 32%; and agricultural property at 12%.  Section 137.115.5 RSMo (2000) as amended.

Investigation by Hearing Officer

In order to investigate appeals filed with the Commission, the Hearing Officer may 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.  Section 138.430.2 RSMo (2000) as amended.  The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties or based solely upon evidence presented by the parties.  Id.

During the hearing, the Senior Hearing Officer inquired of Complainant and of the Appraiser.

Complainant’s Burden of Proof

To obtain a reduction in assessed valuation based upon an alleged overvaluation, the Complainant must prove the true value in money of the subject property on the subject tax day.  Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).  True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so.  Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974).  True value in money is defined in terms of value in exchange and not in terms of value in use.  Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973).  In sum, true value in money is the fair market value of the subject property on the valuation date.  Hermel, Inc., 564 S.W.2d at 897.

A presumption exists that the assessed value fixed by the BOE is correct.  Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895.  “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348.  Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion.  Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).  Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact.  Cupples Hesse Corp., 329 S.W.2d at 702.  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).

There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof.  The taxpayer is the moving party seeking affirmative relief.   Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”  Westwood Partnership, 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); Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. W.D. 1991).

Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land.  Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992).  “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.”  Carmel Energy, Inc., 827 S.W.2d at 783.  A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “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. E.D. 1980).

Respondent’s Burden of Proof

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.

Weight to be Given Evidence

The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and 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 deemed necessary when viewed in connection with all other circumstances.  Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991).  The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part.  Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).

Board Presumption and Computer-Assisted Presumption

            There exists a presumption of correct assessment by the BOE – the BOE presumption.  In charter counties or the City of St. Louis, there exists by statutory mandate a presumption that the Assessor’s original valuation was made by a computer, computer-assisted method or a computer program – the computer-assisted presumption.  These two presumptions operate with regard to the parties in different ways.

The BOE presumption operates in every case to require the taxpayer to present evidence to rebut it.  If Respondent is seeking to prove a value different than that set by the BOE, then it also would be applicable to the Respondent.

The computer-assisted presumption is applicable only if (1) the BOE lowered the value of the Assessor and Respondent is seeking to sustain the original assessment and (2) it has not been shown that the Assessor’s valuation was not the result of a computer assisted method.  The BOE’s valuation is assumed to be an independent valuation.

In the present appeal, the BOE lowered the initial valuation of Respondent, and neither Complainant nor Respondent is seeking to change the assessment to the Assessor’s original valuation; therefore, only the BOE presumption applies while the computer-assisted presumption is not applicable.

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, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; 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. 1974).

“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.”  Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).  “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof  Corp., 789 S.W.2d at 869.  “The method used depends on several variables inherent in the highest and best use of the property in question.”  Snider, 156 S.W.3d at 347.  “Each method uses its own unique factors to calculate the property’s true value in money.”  Id.  “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.  Id. at 348.  “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.”  Id. (quotation omitted).  “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.”  Id.

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.

 

  1. Both parties are well informed and well advised, and both acting in what they consider their own best interests.

 

  1. A reasonable time is allowed for exposure in the open market.

 

  1. Payment is made in cash or its equivalent.

 

  1. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

 

  1. 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.

Discussion

Complainant’s evidence was neither substantial nor persuasive to support an opinion as to the true market value of the subject property as of January 1, 2015.  Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion.  Cupples Hesse Corp., 329 S.W.2d at 702.  Persuasive evidence is that which causes the trier of fact to believe, more likely than not, the conclusion advocated is the correct conclusion.  Id.

Complainant did not use any of the court approved methods of valuation to arrive at an opinion of TMV.  At first glance, Complainant’s Exhibit A1 appears to present a sales comparison approach to valuing the subject property.  However, on closer inspection, Complainant’s Exhibit A1 did not contain any market based adjustments to the comparables to arrive at an adjusted sale price to help in understanding what the TMV of the subject property should have been on January 1, 2015.  Rather, Exhibit A1 was a collection of data concerning the change in assessment of four comparables along with some basic descriptive information about each of the comparables, e.g., number of bedrooms and bathrooms and lot size. In actuality, according to the St. Louis County Real Estate Records Database, Complainant’s Comparable No. 3 had not even been a recent sale (2011), and Comparable No. 4, which had been built in 1850, had no record of a valid sale occurring between 1999 and the date of the evidentiary hearing.

Complainant’s Exhibits A2 and A3 likewise were not substantial or persuasive for proving the TMV of the subject property.  Exhibit A2 contained photographs depicting isolated damage to the interior of the subject property’s residence and to the driveway or walkway but did not include any information on how the damage depreciated the subject property or bids for the cost to repair the damage.  Exhibit A2 also contained photographs of a neighboring vacant lot.  Without context to explain how these issues affected the value of the subject property, the photographs were not persuasive.  Exhibit A3 contained a map purporting to show the change in the median value of homes in several zip codes.  The exhibit did not provide context to explain the timeframe of the change.  Notably, however, Exhibit A3 showed that the median home value in the zip code in which the subject property is located rose by 5.1 percent.

The subject property is unique and difficult to compare due to the absence of similar properties nearby, which reasonably required the Appraiser to find comparable properties outside the subject property’s neighborhood.  Moreover, the subject property consists of an unusually large amount of acreage surrounded by densely populated subdivisions, which reasonably required the Appraiser to find comparable properties over one mile from the subject property.

Both Complainant and Respondent compared a neighboring property, the Appraiser’s Comparable No. 4, to the subject property.  The Appraiser testified that he had used Comparable No. 4 as a “control” because it and the subject property were the only two properties located in the neighborhood.  It was reasonable to utilize Comparable No. 4 in this manner given that both residences had been built at approximately the same time by and for the same family.  According to the evidence presented, Comparable No. 4 and the subject property were the only two residential properties in that particular area with large acreage and which utilized and maintained a private road for ingress and egress.  However, the Appraiser made market based adjustments to Comparable No. 4 to account for the fact that it was improved by a residence 1,200 square feet larger than the subject property’s residence.  Comparable No. 4 had an additional garage stall and an additional fireplace.  More importantly, Comparable No. 4 had three bedrooms and three full bathrooms above grade whereas the subject property had only one bedroom and one full bathroom above grade.  (Exhibit 1)  The Appraiser likewise made market based adjustments to the other comparables to help him arrive at an opinion of value.

Respondent rebutted the presumption of correct valuation by the BOE and also presented substantial and persuasive evidence establishing that the TMV of the subject property on January 1, 2015, was $270,000.

ORDER

The true market valuation for the subject property as determined by the BOE is SET ASIDE.  The assessed value for the subject property for tax years 2015 and 2016 is set at $51,300 residential ($270,000 TMV).

Application for Review

A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision.  The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous.  Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.

            Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432, RSMo

Disputed Taxes

The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of Section 139.031.8, RSMo.

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 September 20, 2016.

STATE TAX COMMISSION OF MISSOURI

Amy S. Westermann

Senior Hearing Officer

 

Certificate of Service

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 20th day of September, 2016, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.

 

Jacklyn Wood

Legal Coordinator

 

[1]Exhibit A1 labeled the subject property as “1” and the four comparables as “2,” “3,” “4,” and “5.”

[2] Respondent’s proposed valuation was lower than the BOE’s valuation.