State Tax Commission of Missouri
DAVID & DEBORAH SCHMITT,)
v.) Appeal(s) Number 07-11510
PHILIP MUEHLHEAUSLER, ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.Hearing Officer finds presumptions of correct assessment rebutted. True value in money for each of the subject properties for tax year 2007 and 2008 is set at $337,800, assessed value of $64,182.
Complainants appeared in person.
Respondent appeared by Associate County Counselor, Paula Lemerman.
Case heard and decided by Hearing Officer Maureen Monaghan.
The Commission takes this appeal to determine the true value in money for the subject properties on January 1, 2007.
Complainants appeal, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $457,500, assessed value of $86,830, as residential property.Complainants proposed a value of $280,000, assessed value of $53,200 in the Complaint for Review of Assessment.A hearing was conducted on June 25, 2008, at theSt. LouisCountyGovernmentCenter,Clayton,Missouri.At the hearing, the Assessor proposed a true value of $377,000.The Complainants proposed a true value of $325,000.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainants appeared in person and testified on their behalf.They stated that their opinion of value for the property to be $325,000 as of January 1, 2007. Exhibit A was received into evidence on behalf of Complainants.Exhibit A is a 61 page document consisting of:
· Assessor’s Office information regarding the subject property;
· Assessor’s Office information regarding property located at 220 West Monroe Avenue; Assessor’s Office information regarding property located at 120 East Jewel Avenue;
· Assessor’s Office information regarding property located at 624 North Clay Avenue;
· Assessor’s Office information regarding property located at 733 North Kirkwood Road; Assessor’s Office information regarding property located at 449 North Clay Avenue;
· Portions of an appraisal using a sales comparison approach valuing the property at $475,000 as of October, 2007;
· Copy of a Fire Policy;
· Copy of Complainant David Schmitt’s Contractor’s License; and
· Repairs and estimates.
The Complainant, a contractor, testified as to the condition of the improvement on the property.The Complainant testified that the house will need repairs to the foundation, cracks in the walls,replacement of the furnace, pipes, kitchen floor, stairwell, exterior doors, concrete driveway, siding, roof, deck and porch railings.He estimated the repairs at $79,238.16.The Complainants also testified that Comparable Property 2 of the Assessor’s Appraisal report is most like their property.The properties are .16 miles apart and both suffer from the noise from nearby train activity.
Respondent placed into evidence the testimony of Ms. Sarah Curran, Missouri State Certified Residential Appraiser.The appraiser testified as to her appraisal of the subject property.The Appraisal Report, Exhibit 1, of Ms. Curran was received into evidence.Ms. Curran arrived at an opinion of value for the subject property of $377,000 based upon the sales comparison approach to value.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainants timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.
2.The subject property is located at230 W. Argonne Drive,Kirkwood,Missouri.The property is identified by Parcel Number 23M110173.
3.The property is a two-story, single-family residence built in 1903 on a 8,500 square foot site.The gross living area of the subject property is 2,220 square feet.It has a partial unfinished basement and a two-car detached garage. The exterior is vinyl construction.The residence has a total of 8 rooms, 4 bedrooms, 2 full baths and 1 half bath.The property also has a porch, patio, deck, inground pool, and a finished area over the detached garage.
4.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
5.The house will need repairs to the foundation, cracks in the walls,replacement of the furnace, pipes, kitchen floor, stairwell, exterior doors, concrete driveway, siding, roof, deck and porch railings.The cost to make the necessary repairs is $79,238.16.
6.The Respondent’s appraiser developed a sales comparable approach.The appraiser relied on three properties she deemed comparable to the subject property for the purpose of making a determination of value. The three properties were located within .34 miles.Each sale property sold at a time relevant to the tax date of January 1, 2007, ranging from
June 29, 2005, to November, 2005.The sale properties were similar to the subject in age, number of units, room count, and other amenities of comparability.
7.The comparables were described as follows:
Comparable 1 sold in September 2005for $ 404,000.This property consists of a 7,650 square foot lot improved by a two-story vinyl single-family structure of average quality construction.The house is 69 years old and appears to be in good condition.The residence has a total of 9 rooms, which includes 3 bedrooms, 3 full baths and 1 half bath, and contains 2,126 square feet of living area.There is a full basement, which has 420 square feet of finished area.There is a detached two-car garage.
Comparable 2 sold in November 2005 for $ 383,000.This property consists of a15,000 square foot acre lot improved by a two-story vinyl single-family structure of average quality construction.The house is 106 years of age and appears to be in good condition.The residence has a total of 7 rooms, which includes 4 bedrooms, 1 full bath and 1 half bath, and contains 1,832 square feet of living area.There is a full basement.There is a detached two-car garage.
Comparable 3 sold in June, 2005 for $487,000.This property consists of a 19,448 square foot lot improved by a two-story vinyl single-family structure of average quality construction.The house is 107 years of age and appears to be in good condition.The residence has a total of 9 rooms, which includes 4 bedrooms, 2 full and 1 half bath, and contains 2,524 square feet of living area.There is a full basement and a detached two-car garage.
8.The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.All adjustments appear to be appropriate to bring the comparables in line with the subject for purposes of the appraisal problem. The appraiser made a negative adjustment of $40,000 to the comparable properties to account for the condition and needed repairs of the subject property.
9.The net adjustments for Comparable 1 amounted to -$31,700 or -7.8% of the sales price.The net adjustments for Comparable 2 amounted to -$7,800or -2.0% of the sales price.The net adjustments for Comparable 3 amounted to -$96,400 or -19.8% of the sales price.
10.The adjusted sales prices for the comparables calculated to $372,300, $375,200, and $390,600, respectively.The appraiser concluded on a $377,000 value which calculated to a value per square foot of $169.00 compared with the sales prices per square foot of living area for the comparables of $190.03, $109.06 and $192.95.
11.Respondent did not have to meet a standard of clear, convincing and cogent evidence in this appeal, under the provisions of Section 137.115, RSMo, as she was not seeking to sustain the original valuation presumed to have been made by a computer, computer-assisted method or a computer program.
12.The true value in money of each property as of January 1, 2007, is set at $337,800, assessed value of $64,182.See, Hearing Officer Finds Value, infra.
CONCLUSIONS OF LAW AND DECISION
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.
Presumptions 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 in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.
Notwithstanding the provision of Section 138.431.3, RSMo – “There shall be no presumption that the assessor’s valuation is correct,” – the Supreme Court of Missouri has held, “A tax assessor’s valuation is presumed correct.”Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341 (Mo. 2005).Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.Snider, Hermel & Cupples Hesse, supra.
Standard for Valuation
Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so.St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993).It is the fair market value of the subject property on the valuation date.Hermel, supra.
Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.
Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:
1.Buyer and seller are typically motivated.
2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.
3.A reasonable time is allowed for exposure in the open market.
4.Payment is made in cash or its equivalent.
5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
6.The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.
Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary, Exhibit 1, p. 4.
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).
Missouricourts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).
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. 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 Complainants bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.” 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).
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).
The Complainant, a contractor, testified as to the condition of the improvement on the property.The Complainant testified that the house will need repairs to the foundation, cracks in the walls,replacement of the furnace, pipes, kitchen floor, stairwell, exterior doors, concrete driveway, siding, roof, deck and porch railings.He estimated the repairs at $79,238.16.
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.
The Respondent’s appraiser developed a sales comparable approach.The appraiser used three properties located within .34 miles.The sale properties were similar to the subject in age, number of units, room count, and other amenities of comparability. Positive adjustments were made for the pool and finished area over the garage.Adjustments were made for the variance in square footage and baths.The appraiser made a negative adjustment of $40,000 to the comparable properties to account for the condition and needed repairs of the subject property.The adjusted sales prices for the comparables calculated to $372,300, $375,200, and $390,600, respectively.The appraiser concluded on a $377,000 value.
Hearing Officer Finds Value
The appraiser accounted for some of the repairs needed for the property by making a negative adjustment to the comparable properties in the amount of $40,000.The Complainant, a contractor, testified that the home needs repairs in the amount of $79,250.The Hearing Officer took into account all necessary repairs needed and concluded on a value of $337,800.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forSt. LouisCountyfor the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2007 and 2008 is set at $64,182.
A party 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.Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO65102-0146, 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 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, unless said taxes have been disbursed pursuant an order of the circuit court under the provisions of Section 139.031.8, RSMo.§139.031.3, RSMo.If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED July 8, 2008.
STATE TAX COMMISSION OFMISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 8thday of July, 2008, to:David Schmitt, 230 W. Argonne, Kirkwood, MO 63122, Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent; Philip A. Muehlheausler, Assessor; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.