State Tax Commission of Missouri
DAVID & REBECCA CRAMER,)
)
Complainants,)
)
v.) Appeal Number 09-85007
)
MARGARET POND, ASSESSOR,)
SALINE COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the Saline County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property is set at $320,000, residential assessed value of $60,800.Complainants, David and Rebecca Cramer, appeared pro se.Respondent appeared pro se.Case heard and decided by Hearing Officer Maureen Monaghan.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.
SUMMARY
Complainants appeal, on the ground of overvaluation, the decision of the Saline County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined a true value of $364,300, assessed value of $69,217, as residential property.The Complainants proposed, at the time of the appeal, a value of $307,500, assessed value of $58,425.A hearing was conducted on November 17, 2009, at the Saline County Courthouse, Marshall, Missouri.
The 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 from the decision of the Saline County Board of Equalization.
2.Complainants’ Evidence:Mr. Cramer testified in his own behalf.The owner’s opinion of value as of January 1, 2009, was $320,000.Mr. Cramer testified that he has owned the house since April, 2008.The house and pool cost $323,000 to construct and the site cost $17,000.There have been no improvements to the property since January 1, 2009. Mr. Cramer presented Petitioner’s Exhibit 2 which was a listing of the square footage and Assessor’s true value for his property and four neighboring properties.Mr. Cramer also called Becky McRoberts to testify.Becky McRoberts is a state certified residential appraiser.The appraiser testified that she conducted an appraisal on the subject property and provided an appraisal report, Petitioner’s Exhibit 1.The appraiser considered all three approaches but only applied the cost and market or sales comparison approach, relying primarily on the market comparable approach.The appraiser located three sales and one listing.The sales occurred from March to June 2008 and the sale prices ranged from $295,000 ($99.23/sq. ft.) to $328,000 ($116.19/sq. ft).The properties were within 1.68 miles of the subject property.The appraiser made adjustments for the differences in exterior materials, age, size, basement finish and pool. The adjusted sales prices ranged from $300,454 to $322,454.The appraiser concluded on a market value as of November 9, 2009, of $320,000.
The appraiser stated that she could not provide an opinion of the market value of the subject property on January 1, 2009, without reviewing all of her information and doing additional work.She testified that although she could not provide an opinion of value as of January 1, 2009, immediately, she would note that the market research in her file that she brought with her to the hearing indicated that the market has increased slightly since January 1, 2009.She testified that her opinion of value of the subject property on January 1, 2009, would be the same or less than $320,000.
3.Respondent’s Evidence:Nina Foster, an employee with the Saline County Assessor’s Office, testified on the behalf of the Assessor’s Office.Respondent testified that she completed a cost approach on the property.The employee provided the materials used to complete a cost approach on the subject property.(Respondent’s Exhibit 1) The materials include the depreciation schedule (2% for 2008 built property and neighborhood adjustment) and Marshall and Swift cost tables, including the cost of swimming pool.The employee also provided the Assessor’s true value on neighboring properties and an appraisal report on another property dated April 4, 2008.
4.Subject Property.The subject property is located at 304 Cambridge Street, Marshall, Missouri.The property is identified by parcel number 003-17-60-23-03-007-010.The property consists of 11,340 square foot site improved by a one-story brick, single-family structure.The house was built in 2008 and appears to be in good condition.The residence has a total of eight rooms, which includes two bedrooms, two and one half baths, and contains 2,301 square feet of living area, above grade.There is a full basement which is not finished. The house has an attached three-car garage and swimming pool.[1]
5.No New Construction/Improvement.There was no evidence of new construction and improvement from January 1, 2009 to the date of the hearing.
6.Substantial and Persuasive Evidence.Complainant’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, 2009, to be $320,000.See, Complainants’ Burden of Proof, infra.
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.[2]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[3]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 is accepted as true only until and so long as there is no substantial evidence to the contrary.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.[4]
Complainants’ evidence as analyzed under Complainants’ Burden of Proof, infra, constituted substantial and persuasive evidence to rebut the presumption of correct assessment and establish the fair market value of the subject property to be $320,000.
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.[5]It is the fair market value of the subject property on the valuation date.[6]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.[7]
Weight to be Given Evidence
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.[8]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 he may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer 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.[9]The Hearing Officer, after a complete review and analysis of the appraisal report received on behalf of Complainants, is persuaded by the appraisal report of Ms. McRoberts.The appraiser presents credible, substantial and persuasive evidence upon which a finding of true value can and should be based.
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.[10]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.[11] The owner’s opinion of value is grounded upon an appraisal report concluding value under the sales comparison approach to value.This approach is generally recognized to be the strongest approach to value when valuing single family residences, when sufficient sales data is available.There was sufficient sales data of sales at a time relevant to the valuation date of January 1, 2009.
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, 2009.[12] 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.”[13]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[14]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.[15]
The owner of property is generally held competent to testify to its reasonable market value.[16]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[17]
Consideration of November 9, 2009, Appraisal
It has generally been the practice of the Commission to sustain relevancy objections concerning any appraisal that does not have the valuation date of January 1 of the tax year under appeal.However, if through investigation[18] and consideration of the underlying sales data the hearing officer determines that the appraisal will provide evidence of value, irrespective of whether the appraiser is prepared to state an adjusted or amended opinion of value, it may be used to determine value.The evidence clearly established the fair market value of the Cramer’s property as of November 9, 2009, was $320,000.
That conclusion of value was based upon three sales of comparable property and a current listing.The sale properties were similar to the subject in style, quality of construction, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability. The appraiser properly adjusted for those factors which she deemed required adjustment to arrive at an adjusted sales price.The net adjustments ranged from 1.7% to 1.9% and the gross adjustments ranged from 7.8% to 15.3%.Both are within a generally accepted range for an appraisal of this nature.
The unadjusted sales prices were: $295,000, $320,000, and $328,000.The per square foot sales prices calculated to the following amounts: $99.23, $101.56, and $116.19.
Each sale property sold at a time relevant to the tax date of January 1, 2009.The respective sales dates were: March 31, 2008, June 30, 2008 and June 28, 2008.This range of dates clearly falls within an acceptable range for a valuation of the property on January 1, 2009.
Effective Date of Appraisal
The appraiser stated that she could not provide an opinion of the market value of the subject property on January 1, 2009, without reviewing all of her information and doing additional work.She testified that although she could not provide an opinion of value as of January 1, 2009, immediately, she would note that the market research in her file that she brought with her to the hearing indicated that the market has increased slightly since January 1, 2009.She testified that her opinion of value of the subject property on January 1, 2009, would be the same or less than $320,000.
Complainants met their burden of proof irrespective of the November 9, 2009, valuation date of the appraisal, given that the appraiser testified that the market has not changed substantially and that the market prices might have slightly increased since January 1, 2009.The underlying sales data establishes the true value in money of the property under appeal as of January 1, 2009, to be $320,000.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization for Saline County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax year 2009 is set at $60,800.
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.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. [19]
The Collector of Saline County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a 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 December 2, 2009.
STATE TAX COMMISSION OFMISSOURI
_____________________________________
Maureen Monaghan
Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 2nd day of December, 2009, to:David Cramer, 304 Cambridge, Marshall, MO 65340, Complainant; Donald Stouffer, Prosecuting Attorney, 101 E. Arrow, Room 100, Marshall, MO 65340, Attorney for Respondent; Margaret Pond, Assessor, 101 E. Arrow, Room 203, Marshall, MO 65340; Kenneth Bryan, Clerk, 101 E. Arrow, Room 202, Marshall, MO 65340; Grace Miles, Collector, 101 E. Arrow, Room 201, Marshall, MO 65340.
___________________________
Barbara Heller
Legal Coordinator
[3] 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).
[4] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[5] 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).
[7] 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.
[8] 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).
[9] St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
[10] 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).
[11] 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).
[13] 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).
[16] 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).
[17] Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).
[18] Section 138.430.2, RSMo.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.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.