State Tax Commission of Missouri
BARY K. & PENNY D. WARREN,)
)
Complainants,)
)
v.) Appeal Number 07-62515
)
DON DAVIS, ASSESSOR,)
JASPER COUNTY,MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the Jasper County Board of Equalization reducing the assessment made by the Assessor is AFFIRMED.Hearing Officer finds presumption of correct assessment not rebutted. True value in money for the subject property for tax years 2007 & 2008 is set at $184,100, residential assessed value of $34,980.
Complainant Bary K. Warren appeared in person.
Respondent appeared by Assistant Prosecuting Attorney, Teresa Kenney.
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
Complainants appeal, on the ground of overvaluation, the decision of the Jasper County Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $187,530, assessed value of $35,620, as residential property.The Board reduced the value to $184,100, assessed value of $34,980.Complainants presented an opinion of value on the Complaint for Review of Assessment of $154,100, assessed value of $29,280.A hearing was conducted on February 6, 2008, at the Jasper County Courthouse Annex,Carthage,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.Mr. Warren gave his opinion of value for the property under appeal as $154,100, based upon flooding in May, 2006 and June, 2007 and the construction of a drainage ditch in July and August, 2007.
Complainant offered into evidence Exhibit A consisting of the following documents: (1) copy of Order Setting Evidentiary Hearing; (2) copy of 2006 and 2007 real estate tax bills; (3) letter dated October 9, 2007, setting out the basis for Complainants’ appeal; (4) copy of Complaint for Review of Assessment, Board of Equalization Decision, Notice of Change in Value of Real Property, Letter from Collector on protested taxes, letter from Bank of America on protested taxes, Insurance Claim payment Letter and Flood Declarations Page, issued 7/19/07; (5) plat of subject subdivision, showing water flow line across Complainants’ property; photographs of drainage ditch and French drain constructed in 2007; (6) Multi-Listing Service data sheet on sale of (a) subject, (b) property on Larry T. Foster Lane and (c) property on Chickadee.
Respondent’s Evidence
Respondent offered into evidence the appraisal report (Exhibit 1) of Ms. Christine Meadows, appraiser for Respondent.The appraiser testified as to her appraisal of the subject property.Exhibit 1 was received into evidence.Exhibit 1 concluded on a value for the subject property of $184,100 based upon a cost analysis.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Jasper County Board of Equalization.
2.The subject property is located at 8899 County Lane213, Webb City, Missouri.The property is identified by parcel number 15-3.0-05-00-000-019.000.Complainants purchased the property in May 2003 for $182,000.In May 2006 the basement in the subject property was flooded.The basement again flooded in 2007.In 2007 repairs were made to correct the flood damage.In July and August 2007 a drainage ditch was constructed to address the flooding problem.There has not been a repeat of the 2006 and 2007 flooding to determine if the drainage ditch will correct the basement flooding problem.Testimony of Complainant.
3,There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008, for which a change in the value of the subject would be warranted or established for 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 $154,100.
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 CountyBoardof 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 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. Complainants’ evidence failed to rebut the presumption of correct assessment.
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.
Complainants’ Burden of Proof
In order to prevail, Complainants 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. Warren’s testimony focused upon the fact that by August 2007 the subject property had a large drainage ditch to hopefully correct the drainage and flooding problem associated with the subject property.What Complainant was seeking was a reduction in value based upon the fact that after the flooding in 2007 and the construction of the ditch, any prospective purchaser would have to be advised of the past flooding problem and that the drainage ditch had not been proven to have corrected the problem.
The flaw in the taxpayer’s reasoning overlooks that the valuation date for the property is January 1, 2007.As of January 1, 2007, a prospective buyer could only be informed that in mid-2006 there had been approximately an inch of water over about half the basement when the area experienced a 100 year flooding.Testimony of Complainant.There would be no need to warn a prospective buyer of flooding that had not yet occurred, or as to an unproven drainage ditch which had not even been constructed in January 2007.
In other words, the view Mr. Warren took in forming his opinion of fair market value was a view from after the second 100 year flooding incident and after construction of the ditch.The Hearing Officer understands the taxpayer’s concern, however, the factors which are driving the Complainant’s opinion of value are not factors which would have or could have been considered by a prospective buyer in January 2007. There is no evidence from Mr. Warren’s testimony or exhibit from which it can be concluded that as the property existed on January 1, 2007, that $154,100 represents the fair market value of the property.Nor does the evidence establish that a reduction in value of $30,000 ($184,100 – $154,100 = $30,000) would represent the property’s fair market value as the property existed on January 1, 2008.Any such conclusion would rest upon nothing more than conjecture and surmise, neither of which are support for a finding of an indicated value.
The existence of the drainage ditch is certainly a factor which needs to be considered in the 2009 valuation of the property.The biggest problem in addressing this aspect of this particular appraisal problem, it the lack of market derived data upon which to base an adjustment for the existence of this condition.The ditch may be a positive factor on the property value assuming it prevents further flooding in the basement of theWarrenhouse.On the other hand, the drainage ditch could be a negative factor on the basis of detracting from the aesthetic appeal which the property might otherwise possess absent the existence of the ditch.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization forJasperCountyfor the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2007 and 2008 is set at $34,980.
Complainants 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 Jasper 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 February 26, 2008.
STATE TAX COMMISSION OFMISSOURI
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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 26thday of February, 2008, to:Bary Warren, 8899 County Lane 213, Webb City, MO 64870, Complainant; Dean Dankelson, Prosecuting Attorney, 601 Pearl, Room 100, Joplin, MO 64801, Attorney for Respondent; Donald Davis, Assessor, 302 S. Main Street, Carthage, MO 64836; Bonnie Earl, Clerk; Stephen Holt, Collector, Jasper County Courthouse, Carthage, MO 64836.
___________________________
Barbara Heller
Legal Coordinator