Darlene Wilson v. Reynolds (Johnson)

DARLENE D. WILSON,)

)

Complainant,)

)

v.) Appeal Number 11-63000

)

MARK REYNOLDS, ASSESSOR,)

JOHNSON COUNTY, MISSOURI,)

)

Respondent.)

DECISION AND ORDER

 

HOLDING

Decision of the Johnson County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.True value in money for the subject property for tax years 2011 and 2012 is set at $60,879, residential assessed value of $11,567.Complainant appeared pro se.Respondent appeared pro se.

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

ISSUE

Complainant appeals, on the ground of overvaluation, the decision of the Johnson County Board of Equalization, which sustained the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2011.The 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 from the decision of the Johnson County Board of Equalization. Case was submitted upon exhibits in lieu of an evidentiary hearing.[1]

2.Assessment.The Assessor appraised the property at $60,879, an assessed residential value of $11,567.[2] The Board sustained the assessment.[3]

3.Subject Property.The subject property is located at 629 SE 501 Road, Warrensburg, Missouri.The property is identified by map parcel number 20-7-26-4.The property consists of a 7.2 acre lot, improved by a one and a half story frame, wood siding, house built in 1980.The house is 1,408 square feet with two bedrooms and two baths, no garage or carport, and an unfinished partial basement.[4]There is an 8 x 32 covered porch.The house sits on a wooded site, not readily visible from the road.[5]Complainant purchased the subject property on July 22, 2010 from CitiMortgage, Inc., for $36,500.[6]

4.Complainant’s Evidence.Complainant submitted the following exhibits:

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.[7]

5.Respondent’s Evidence.Respondent submitted the following Exhibits:

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 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.[9]

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.[10]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.[11]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[12]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with substantial and persuasive evidence on the taxpayer – Complainant.

Complainant’s Burden of Proof

In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2011.[13]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.”[14]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[15]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.[16]

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.[17]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, as well as the actual sale price of the property under appeal.[18]

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.[19]True value in money is defined in terms of value in exchange and not value in use.[20]It is the fair market value of the subject property on the valuation date.[21]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.[22]

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[23]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.The owner submitted 22 exhibits.Most of the exhibits are not relevant for establishing market value.The exhibits pertaining to comparable properties and the sale of the subject property are relevant to the market value.The weight to be given to said evidence is determined by the Commission.

Exhibits Q, R and S are listings of properties the Complainant deems to be comparable to the subject.The properties are located in Warrensburg and Leeton, Missouri.The printouts show a date of February 22, 2011.The lot sizes vary from 3 to 15 acres.The houses range from 1,080 to 2,020 square feet.They are all three bedrooms with one to two baths.

The evidentiary value of the exhibits are limited due to the exhibits being listings and that the sales comparable approach to value was not fully developed.Listings do not establish sale prices.Listings simply indicate a price that a willing seller may accept for the property.

The sales comparison approach uses the market to estimate value by comparing the subject to similar property that have recently sold.The basic steps are to define the appraisal, collect and analyze data, select units of comparison, make adjustments based upon the market, and apply the data to the subject property.The Complainant failed to fully develop the sales comparison approach.The Complainant did not use sales but used listings.The Complainant failed to investigate the conditions of the sales or listings.Even if the listings were actually the price paid for the comparable properties, prices without sufficient information to establish that the sale was a usable market sale, without comparable information, and without market data to make adjustments for location, size, room count, etc, provides no evidence as to market value of the subject property.

The Complainant presented information on the purchase of the subject property.The Complainant purchased the property on July 21, 2010, for the price of $36,500.The sale of the subject property may be relevant to establish value if the standards of valuation are met.The standards include:

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; and

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.[24]

 

The Appraisal Institute and the IAAO have issued guidelines as to the use of foreclosed or distressed properties in appraisals. Appraisers must investigate the circumstances of all transactions. The circumstances may include atypical seller motivations and sales concessions, whether the property condition was compromised as indicated by “as is” sale or a sale with listing clause concerning buyer’s inspections and repairs. The appraiser should review the foreclosure and whether or not the market is influenced by foreclosure related sales in the area.

The Complainant did not present evidence as to the conditions of the sale. The property was repossessed on April 1, 2010 and sold “as is.” Without more information regarding the circumstances of the transaction, the evidence has limited value. Even if it was established that the sale was a usable or relevant transaction, one sale does not establish market.

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.”[25]

Respondent’s Evidence

The Assessor developed a sales comparison approach and a cost approach. The sales comparison approach as developed by a certified residential appraiser in a market with sufficient sales and market data is the most persuasive evidence of value of residential property like the subject.

In this case, the Assessor presented the appraisal performed by an independent, certified residential appraiser. The licensed appraiser determined a value of $103,500 using a sales comparison approach. The appraiser located four sales within 11.39 miles of the subject property. The sales occurred from October 2009 to May 2010. The lot sizes ranged from 4 acres to 13.79 acres. The square foot ranged from 975 to 2,011 square feet. The appraiser reviewed the market data and made adjustments for the size of the lot, square footage, room and bath count, and garage/utility buildings. The net adjustments ranged from 3.7% to 16.2% providing adjusted sales prices of $98,300 to $109,000. The appraiser, after reviewing all information, concluded on a value of $103,500.

The only criticism of the appraisal is that the effective date is July, 2010 – 5 months prior to the ad valorem date. Although the valuation is 5 months prior to the valuation date of

January 1, 2011, the conclusion of value of $103,500 provides support for the County valuation of $60,879. Further, the Assessor did not advocate for a different value than the value as set by the Board of Equalization. The evidence was presented to support their value and as such is substantial and persuasive that the property’s true value as of January 1, 2011, was at least $60,879.

ORDER

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

The assessed value for the subject property for tax years 2011 and 2012 is set at $11,567.

Judicial Review

Judicial review of this Decision and 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 and Order.

Disputed Taxes

The Collector of Johnson 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 June 20, 2012.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Randy B. Holman, Commissioner

 

 

 

 

 

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

 

 

[1] The Complainant requested that the hearing be conducted on evidence submitted as appearance in Johnson County would be a financial hardship. Letter dated 8/12/11. An initial order was sent to the parties informing them that the case would be submitted on documents and a deadline was issued for submission of documents. The Hearing Officer issued a decision based upon documents received by the Complainant. No documents were received from Respondent. After the issuance of the decision, the Assessor requested a rehearing stating that they did not receive notice that the hearing was waived. The Commission granted the rehearing and a deadline was issued for submission of documents.

 

[2] Residential property is assessed at 19 percent of its appraised (true value in money/fair market value),

Section 137.115.5, RSMo.

 

[3] Board Decision Letter, dated 7/22/11

 

[4] Exhibits A & F

 

[5] Exhibits A, F & G (photographs); Exhibits 1, 2 & 5 (photographs)

 

[6] Exhibit A – Property as Open Market Sale and Comparison, Item 1, p. 3; Exhibit B

 

[7] Section 137.115.1, RSMo.

 

[8] Appraiser – Ann Raines, Missouri Certified Residential Real Estate Appraiser

 

[9] Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.

 

[10] Article X, Sections 4(a) and 4(b), Mo. Const. of 1945

 

[11] Section 137.115.5, RSMo

 

[12] 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)

 

[13] Hermel, supra.

 

[14] See, 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). Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991).

 

[15] See, Cupples-Hesse, supra.

 

[16] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

 

[17] See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).

 

[18] St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).

 

[19] 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).

 

[20] Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).

 

[21] Hermel, supra.

 

[22] 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.

 

[23] Rigali v. Kensington Place Homeowners’ Ass’n, 103 S.W.3d 839, 846 (Mo. App. E.D. 2003); Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970).

 

[24] 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.

 

[25] See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).