Behlmann Farms v. Zimmerman (SLCO)

State Tax Commission of Missouri

 

BEHLMANN FARMS,                                 )

)

Complainant,               )

)

v.                                                         )           Appeal Nos.    11-10009 – 11-10055

)

JAKE ZIMMERMAN,  ASSESSOR,           )

ST. LOUIS COUNTY, MISSOURI,             )

)

 Respondent.               )

DECISION AND ORDER

 

HOLDING

Assessments made by the Board of Equalization of St. Louis County are SET ASIDE.  Respondent presented substantial and persuasive evidence to establish the true value in money as of January 1, 2011, for the subject properties.

True value in money for tax years 2011 and 2012 is set at the per parcel value of $3,400; total combined true value in money – $159,800, residential classification.

Complainant appeared by Counsel, Crystal Hall, Stinson Morrison Hecker LLP, St. Louis, Missouri.

Respondent appeared by Associate County Counselor, Paula Lemerman.

Case heard by Senior Hearing Officer W. B. Tichenor; decided by the State Tax Commission.

ISSUE

Complainant appeals, on the ground of overvaluation, the assessments of the Board of Equalization reducing the valuations made by the Assessor on the subject properties.  The Commission takes this appeal to determine the true value in money for the subject properties on January 1, 2011.  The State Tax Commission, 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.  Complainant purchased the properties on July 21, 2011, and therefore was not able to appeal to the St. Louis County Board of Equalization.  An appeal directly to the Commission is permitted in such a case.[1]

2.         Prior Owner’s Appeal.  At the Prehearing Conference, the Hearing Officer was informed that the tax representative for the prior owner (Bank of America, N.A.) had executed settlement stipulations before the Board of Equalization on the valuation of the subject properties.  However, said settlements were executed after Complainant had purchased the properties.  Respondent was given opportunity to file a Motion to Dismiss on the basis of the settlements approved by the Board.  However, no Motion was filed.[2]

3.         Evidentiary Hearing.  The Evidentiary Hearing was held on January 8, 2013, at the St. Louis County Government Center, 41 South Central Avenue, Clayton, Missouri.[3]

4.         Identification of Subject Properties.  The subject properties are all located in Florissant, Missouri and are identified by Appeal Number, Locator Number, and Address as follows:[4]

5.         Description of Subject Properties.  The subject properties consist of 46 lots in the Behlmann Farms subdivision and one lot in the subdivision of The Villages of Jost Farm.[5]  The lots are developed with water, electric and sewer services and are on paved streets, but are not improved with homes.[6]  The subdivision consists of approximately 300 lots in total with all but the subject lots developed.  The lots range in size from .1607 (6,840 square feet) of an acre to .3361 (14,640 square feet) of an acre, with a total combined area of 9.6390 acres, and an average lot size of .2051 acres (8,934 square feet).[7]

6.         Assessment.  The Assessor appraised and assessed the properties at the residential assessment ratio as given below.  The amounts set forth represent Appraised Value/Assessed Value[8] in the Assessor and Board columns.  The Board reduced the assessments as set out below on the properties in Appeals 11-10009 through 11-10054, based upon settlements reached between the Assessor and the prior owner’s tax representative after the purchase of the properties by Complainant.[9]  The taxes for both 2011 and 2012 were based upon the assessed values set out under the Board’s assessment.[10]

7.         Complainant’s Evidence.  The following exhibits were filed and exchanged in advance of the evidentiary hearing behalf of Complainant:

No objections were made to Exhibits A and B.  No rebuttal exhibits were filed to Exhibits A and B.  Exhibits A and B were received into the record.[11]

Benjamin Stegemann, managing member of Behlmann Farms, LLC testified on behalf of Complainant.[12]  Complainant’s opinion of value is the purchase price under the Agreement of Purchase in June 2011 of $25,855.50.[13]

8.         Complainant’s Purchase of Subject Properties.  Complainant purchased the subject properties in a bulk sale from Bank of America, N. A. under Agreement of Purchase and Sale dated June 21, 2011, sale being closed on July 21, 2011.[14]  The total purchase price paid by the Buyer (Complainant) to the Seller (Bank of America, N. A.) was $25,855.50.[15]

9.         Property History Prior to Complainant’s Purchase.  The following events occurred relative to the subject properties prior to the purchase in June/July 2011.

A.        Properties were foreclosed on March 4, 2010, by Bank of America, N.A.[16]

B.        Properties were listed with McBride and Son Brokerage Company, as sales broker, prior to April, 2011.[17]

C.        Mr. Stegeman learned that Bank of America had taken back some Mayer Homes Lots and may have seen an ad related to their offering in the Folio Section of the Post Dispatch.[18]  In approximately April, 2011, Mr. Stegeman reviewed information on the subject lots and wasn’t interested at the price the lots were being offered.[19]

D.        A follow-up to Mr. Stegeman’s initial interest in purchasing the properties took place sometime prior to June 21, 2011.  Conversations took place which moved to negotiations and ultimately agreement was reached as to a purchase price cumulating with the execution of the purchase agreement.[20]

10.       Respondent’s Evidence.  The following exhibits were filed and exchanged in advance of the evidentiary hearing behalf of Respondent:

No objections were made to Exhibits 1, 2 and 3.  No rebuttal exhibits were filed to Exhibits 1, 2 and 3.  Exhibits 1, 2 and 3 were received into the record.[21]

Mr. Duddy, commercial appraiser for the St. Louis County Assessor’s Office, testified on behalf of Respondent.[22]  The appraiser determined a market value using the sales comparison approach.  The appraiser used three sales of lots in his appraisal.  The sales occurred from July 2008 to September 2011 with bulk sales of 3 to 45 properties.  Comparable sale 1, a bulk sale of 13 lots, was most like the subject properties.  The properties were located .17 miles from the subject; the properties sold on March 18, 2010, for $3,500 per lot.

11.       No Evidence of New Construction and Improvements.  There was no evidence of new construction and improvement from January 1, 2011, to January 1, 2012; therefore the assessed value for 2011 remains the assessed value for 2012.[23]

12.       Value of Subject Properties.  Respondent’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2011, to be a total value of $159,800 or $3,400 per lot.

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.  The Commission 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.[24]

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.[25]  The constitutional mandate is to find the true value in money for the property under appeal.  By statute real and tangible personal property is assessed at set percentages of true value in money.[26]

Presumptions In Appeals

No Assessor Presumption

By statute, in hearings before the Commission, there shall be no presumption that the assessor’s valuation is correct.[27]  Accordingly, there is no presumption that the original true values in money or the assessed values set by the Assessor for each of the properties under appeal were correct.

Board Presumption

In this group of appeals, there exists a rather strange fact situation.  The Assessor and the tax representative for the prior owner of the subject lots reached a settlement when the properties were before the Board of Equalization.  Consequently, the Board set the values previously set forth in FINDING OF FACT 6, above.  The Commission has concluded that those are the Board established values not withstanding Complainant did not reached that settlement as to values.  It is presumed that neither the Assessor’s staff, nor the tax representative, or the Board were aware of the sales transaction that was closed on July 21, 2011.

Therefore, for purposes of this appeal the values approved by the Board in the settlement between the Assessor and the prior owner shall receive the benefit of the presumption of validity, good faith and correctness of assessment by the St. Louis County Board of Equalization.[28]  This presumption is a rebuttable rather than a conclusive presumption.  It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.

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.[29]  Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[30]  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.[31]

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.[32]

True value in money is defined in terms of value in exchange and not value in use.[33]  It is the fair market value of the subject property on the valuation date.[34]  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 the definition of fair market value 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.[35]

Weight to be Given Evidence

The Commission 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 Commission to decide.[36]

Trier of Fact

The Commission as the trier of fact may consider the testimony of each witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances.  The Commission is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.

Methods of Valuation

Proper methods of valuation and assessment of property are delegated to the Commission.  It is within the purview of the Commission to determine the method of valuation to be adopted in a given case.[37]  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.[38]  Respondent’s evidence presented a conclusion of value derived from the development of a sales comparison approach.

The Missouri Supreme Court has also recognized that 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.[39]

Complainant’s 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, 2011.[40]  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.”[41]  A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.

Use of Properties Subject to Foreclosure

A price agreed to between a willing buyer and seller creates a presumption that the transaction was a market transaction.[42]  A party seeking to admit sales evidence bears the burden of showing the sale was voluntary.[43]  In this case, the evidence was the properties were subject to foreclosure.  The International Association of Assessing Officers (IAAO) Executive Board provided guidelines for use of foreclosure related sales and the verification procedures.[44]  The guide provides the questions that should be asked and information obtained to verify a sale to determine if it represents the market.  The questions pertain to the amount of the loan balance, asking price, sales price, whether personal property was involved, whether independent appraisals were performed, condition of the property, whether there was evidence of fraud, the marketing of the property, and the length of time the property was marketed.

Complainant Fails to Prove Value

            Complainant’s evidence is simply the actual purchase price of the subject lots six months after the valuation date.  The sale occurred as a result of a foreclosure on the property.  The sale, to be considered as evidence of market value, would need to be verified and information as set by the IAAO Guide be provided.

The State Tax Commission has no evidence, on the record, to establish that the transaction reflected the marked.  There is no foundation upon which to conclude the purchase price of $25,855 did in fact represent the value of the bulk sale of the subject lots.

Respondent’s Evidence Persuasive

A Respondent initially carries no burden of proof in an appeal before the Commission.  The Assessor may always simply rest upon the Board presumption and present no evidence on the issue of fair market value.  The 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.[45]

In this instance, Respondent presented an appraisal of the property.  The Respondent’s appraiser concluded a value based upon a sales comparison approach which relied upon three bulk lot sales.  The sales respectively sold 9 months before, 29 months before and 9 months after the valuation date of January 1, 2011.  The sales respectively involved 13 lots, 3 lots and 40 lots.  The per lot sale prices respectively were $5,000, $9,333 and $1,225. These values were adjusted by the Appraiser to a per lot value $3,500, $5,833 and $1,725.[46]  The appraiser concluded on a value of $3,400 per lot.

Respondent’s Comparable Sales

Sales Comparable 1 was within .17 miles of the subject property and occurred 9 months before the date of valuation.  The appraiser made a  –$1500 per lot adjustment for the comparables smaller number of lots.

Sales Comparable 2 having only 3 lots was adjusted by -$2,500 per lot.  An adjustment for time of sale and location.

Sales Comparison 3 was closer in total number to the subject, 40 versus the subject’s 47.  This sale took place three months after the date of the subject’s agreement for sale.

In reviewing the adjusted sales prices, the appraiser concluded on a true value of $3,400 per lot.

Conclusion

            The State Tax Commission finds that the three comparable sales provide substantial and persuasive evidence to establish the true value of the subject, in light of the willing seller – buyer transaction involving the subject lots.

ORDER

The true value in money for the subject properties as determined by the Board of Equalization for St. Louis County for the subject tax day are SET ASIDE.

The true value for each of the subject properties for tax years 2011 and 2012 is set at $3,400 per parcel.

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 Decision.

            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.  If no judicial review is made 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.

If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, Complainants 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 July 23, 2013.

 

STATE TAX COMMISSION OF MISSOURI

_____________________________________

Bruce E. Davis, Chairman

_____________________________________

Randy Holman, Commissioner

_____________________________________

Victor Callahan, Commissioner

Certificate of Service

            I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 23^rd day of July, 2013, to:  Crystal Hall, 7700 Forsyth, Suite 1100, St. Louis, MO 63105, Attorney for Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Jake Zimmerman, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; Mark Devore, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.

___________________________

Barbara Heller

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

BEHLMANN FARMS,                                 )

                                                                        )

Complainant,               )

)

v.                                                         )           Appeal Nos.    11-10009 – 11-10055

)

JAKE ZIMMERMAN,  ASSESSOR,           )

ST. LOUIS COUNTY, MISSOURI,             )

)

 Respondent.               )

DECISION AND ORDER

 

HOLDING

Assessments made by the Board of Equalization of St. Louis County are SET ASIDE.  Respondent presented substantial and persuasive evidence to establish the true value in money as of January 1, 2011, for the subject properties.

True value in money for tax years 2011 and 2012 is set at the per parcel value of $3,400; total combined true value in money – $159,800, residential classification.

Complainant appeared by Counsel, Crystal Hall, Stinson Morrison Hecker LLP, St. Louis, Missouri.

Respondent appeared by Associate County Counselor, Paula Lemerman.

Case heard by Senior Hearing Officer W. B. Tichenor; decided by the State Tax Commission.

ISSUE

Complainant appeals, on the ground of overvaluation, the assessments of the Board of Equalization reducing the valuations made by the Assessor on the subject properties.  The Commission takes this appeal to determine the true value in money for the subject properties on January 1, 2011.  The State Tax Commission, 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.  Complainant purchased the properties on July 21, 2011, and therefore was not able to appeal to the St. Louis County Board of Equalization.  An appeal directly to the Commission is permitted in such a case.[1]

2.         Prior Owner’s Appeal.  At the Prehearing Conference, the Hearing Officer was informed that the tax representative for the prior owner (Bank of America, N.A.) had executed settlement stipulations before the Board of Equalization on the valuation of the subject properties.  However, said settlements were executed after Complainant had purchased the properties.  Respondent was given opportunity to file a Motion to Dismiss on the basis of the settlements approved by the Board.  However, no Motion was filed.[2]

3.         Evidentiary Hearing.  The Evidentiary Hearing was held on January 8, 2013, at the St. Louis County Government Center, 41 South Central Avenue, Clayton, Missouri.[3]

4.         Identification of Subject Properties.  The subject properties are all located in Florissant, Missouri and are identified by Appeal Number, Locator Number, and Address as follows:[4]

5.         Description of Subject Properties.  The subject properties consist of 46 lots in the Behlmann Farms subdivision and one lot in the subdivision of The Villages of Jost Farm.[5]  The lots are developed with water, electric and sewer services and are on paved streets, but are not improved with homes.[6]  The subdivision consists of approximately 300 lots in total with all but the subject lots developed.  The lots range in size from .1607 (6,840 square feet) of an acre to .3361 (14,640 square feet) of an acre, with a total combined area of 9.6390 acres, and an average lot size of .2051 acres (8,934 square feet).[7]

6.         Assessment.  The Assessor appraised and assessed the properties at the residential assessment ratio as given below.  The amounts set forth represent Appraised Value/Assessed Value[8] in the Assessor and Board columns.  The Board reduced the assessments as set out below on the properties in Appeals 11-10009 through 11-10054, based upon settlements reached between the Assessor and the prior owner’s tax representative after the purchase of the properties by Complainant.[9]  The taxes for both 2011 and 2012 were based upon the assessed values set out under the Board’s assessment.[10]

7.         Complainant’s Evidence.  The following exhibits were filed and exchanged in advance of the evidentiary hearing behalf of Complainant:

No objections were made to Exhibits A and B.  No rebuttal exhibits were filed to Exhibits A and B.  Exhibits A and B were received into the record.[11]

Benjamin Stegemann, managing member of Behlmann Farms, LLC testified on behalf of Complainant.[12]  Complainant’s opinion of value is the purchase price under the Agreement of Purchase in June 2011 of $25,855.50.[13]

8.         Complainant’s Purchase of Subject Properties.  Complainant purchased the subject properties in a bulk sale from Bank of America, N. A. under Agreement of Purchase and Sale dated June 21, 2011, sale being closed on July 21, 2011.[14]  The total purchase price paid by the Buyer (Complainant) to the Seller (Bank of America, N. A.) was $25,855.50.[15]

9.         Property History Prior to Complainant’s Purchase.  The following events occurred relative to the subject properties prior to the purchase in June/July 2011.

A.        Properties were foreclosed on March 4, 2010, by Bank of America, N.A.[16]

B.        Properties were listed with McBride and Son Brokerage Company, as sales broker, prior to April, 2011.[17]

C.        Mr. Stegeman learned that Bank of America had taken back some Mayer Homes Lots and may have seen an ad related to their offering in the Folio Section of the Post Dispatch.[18]  In approximately April, 2011, Mr. Stegeman reviewed information on the subject lots and wasn’t interested at the price the lots were being offered.[19]

D.        A follow-up to Mr. Stegeman’s initial interest in purchasing the properties took place sometime prior to June 21, 2011.  Conversations took place which moved to negotiations and ultimately agreement was reached as to a purchase price cumulating with the execution of the purchase agreement.[20]

10.       Respondent’s Evidence.  The following exhibits were filed and exchanged in advance of the evidentiary hearing behalf of Respondent:

No objections were made to Exhibits 1, 2 and 3.  No rebuttal exhibits were filed to Exhibits 1, 2 and 3.  Exhibits 1, 2 and 3 were received into the record.[21]

Mr. Duddy, commercial appraiser for the St. Louis County Assessor’s Office, testified on behalf of Respondent.[22]  The appraiser determined a market value using the sales comparison approach.  The appraiser used three sales of lots in his appraisal.  The sales occurred from July 2008 to September 2011 with bulk sales of 3 to 45 properties.  Comparable sale 1, a bulk sale of 13 lots, was most like the subject properties.  The properties were located .17 miles from the subject; the properties sold on March 18, 2010, for $3,500 per lot.

11.       No Evidence of New Construction and Improvements.  There was no evidence of new construction and improvement from January 1, 2011, to January 1, 2012; therefore the assessed value for 2011 remains the assessed value for 2012.[23]

12.       Value of Subject Properties.  Respondent’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2011, to be a total value of $159,800 or $3,400 per lot.

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.  The Commission 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.[24]

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.[25]  The constitutional mandate is to find the true value in money for the property under appeal.  By statute real and tangible personal property is assessed at set percentages of true value in money.[26]

Presumptions In Appeals

No Assessor Presumption

By statute, in hearings before the Commission, there shall be no presumption that the assessor’s valuation is correct.[27]  Accordingly, there is no presumption that the original true values in money or the assessed values set by the Assessor for each of the properties under appeal were correct.

Board Presumption

In this group of appeals, there exists a rather strange fact situation.  The Assessor and the tax representative for the prior owner of the subject lots reached a settlement when the properties were before the Board of Equalization.  Consequently, the Board set the values previously set forth in FINDING OF FACT 6, above.  The Commission has concluded that those are the Board established values not withstanding Complainant did not reached that settlement as to values.  It is presumed that neither the Assessor’s staff, nor the tax representative, or the Board were aware of the sales transaction that was closed on July 21, 2011.

Therefore, for purposes of this appeal the values approved by the Board in the settlement between the Assessor and the prior owner shall receive the benefit of the presumption of validity, good faith and correctness of assessment by the St. Louis County Board of Equalization.[28]  This presumption is a rebuttable rather than a conclusive presumption.  It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.

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.[29]  Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[30]  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.[31]

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.[32]

True value in money is defined in terms of value in exchange and not value in use.[33]  It is the fair market value of the subject property on the valuation date.[34]  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 the definition of fair market value 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.[35]

Weight to be Given Evidence

The Commission 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 Commission to decide.[36]

Trier of Fact

The Commission as the trier of fact may consider the testimony of each witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances.  The Commission is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.

Methods of Valuation

Proper methods of valuation and assessment of property are delegated to the Commission.  It is within the purview of the Commission to determine the method of valuation to be adopted in a given case.[37]  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.[38]  Respondent’s evidence presented a conclusion of value derived from the development of a sales comparison approach.

The Missouri Supreme Court has also recognized that 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.[39]

Complainant’s 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, 2011.[40]  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.”[41]  A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.

Use of Properties Subject to Foreclosure

A price agreed to between a willing buyer and seller creates a presumption that the transaction was a market transaction.[42]  A party seeking to admit sales evidence bears the burden of showing the sale was voluntary.[43]  In this case, the evidence was the properties were subject to foreclosure.  The International Association of Assessing Officers (IAAO) Executive Board provided guidelines for use of foreclosure related sales and the verification procedures.[44]  The guide provides the questions that should be asked and information obtained to verify a sale to determine if it represents the market.  The questions pertain to the amount of the loan balance, asking price, sales price, whether personal property was involved, whether independent appraisals were performed, condition of the property, whether there was evidence of fraud, the marketing of the property, and the length of time the property was marketed.

Complainant Fails to Prove Value

            Complainant’s evidence is simply the actual purchase price of the subject lots six months after the valuation date.  The sale occurred as a result of a foreclosure on the property.  The sale, to be considered as evidence of market value, would need to be verified and information as set by the IAAO Guide be provided.

The State Tax Commission has no evidence, on the record, to establish that the transaction reflected the marked.  There is no foundation upon which to conclude the purchase price of $25,855 did in fact represent the value of the bulk sale of the subject lots.

Respondent’s Evidence Persuasive

A Respondent initially carries no burden of proof in an appeal before the Commission.  The Assessor may always simply rest upon the Board presumption and present no evidence on the issue of fair market value.  The 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.[45]

In this instance, Respondent presented an appraisal of the property.  The Respondent’s appraiser concluded a value based upon a sales comparison approach which relied upon three bulk lot sales.  The sales respectively sold 9 months before, 29 months before and 9 months after the valuation date of January 1, 2011.  The sales respectively involved 13 lots, 3 lots and 40 lots.  The per lot sale prices respectively were $5,000, $9,333 and $1,225. These values were adjusted by the Appraiser to a per lot value $3,500, $5,833 and $1,725.[46]  The appraiser concluded on a value of $3,400 per lot.

Respondent’s Comparable Sales

Sales Comparable 1 was within .17 miles of the subject property and occurred 9 months before the date of valuation.  The appraiser made a  –$1500 per lot adjustment for the comparables smaller number of lots.

Sales Comparable 2 having only 3 lots was adjusted by -$2,500 per lot.  An adjustment for time of sale and location.

Sales Comparison 3 was closer in total number to the subject, 40 versus the subject’s 47.  This sale took place three months after the date of the subject’s agreement for sale.

In reviewing the adjusted sales prices, the appraiser concluded on a true value of $3,400 per lot.

Conclusion

            The State Tax Commission finds that the three comparable sales provide substantial and persuasive evidence to establish the true value of the subject, in light of the willing seller – buyer transaction involving the subject lots.

ORDER

The true value in money for the subject properties as determined by the Board of Equalization for St. Louis County for the subject tax day are SET ASIDE.

The true value for each of the subject properties for tax years 2011 and 2012 is set at $3,400 per parcel.

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 Decision.

            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.  If no judicial review is made 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.

If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, Complainants 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 July 23, 2013.

 

STATE TAX COMMISSION OF MISSOURI

_____________________________________

Bruce E. Davis, Chairman

_____________________________________

Randy Holman, Commissioner

_____________________________________

Victor Callahan, Commissioner

Certificate of Service

            I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 23^rd day of July, 2013, to:  Crystal Hall, 7700 Forsyth, Suite 1100, St. Louis, MO 63105, Attorney for Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Jake Zimmerman, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; Mark Devore, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.

___________________________

Barbara Heller

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