State Tax Commission of Missouri
v.) Appeal Number 07-10074
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 AFFIRMED.Hearing Officer finds presumptions of correct assessment not rebutted. True value in money for the subject property for tax years 2007 and 2008 is set at $160,000, residential assessed value of $30,400.
Complainant appeared pro se.
Respondent appeared by Associate County Counselor, Paula J. Lemerman.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.
Complainant appeals, 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 $179,400, assessed value of $32,380, as residential property.The Board reduced the value to $160,000, assessed value of $30,400.Complainant proposed a value of $140,000, assessed value of $26,600.A hearing was conducted on May 20, 2008, at theSt. LouisCountyGovernmentCenter,Clayton,Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant testified in his own behalf.He stated his opinion of value for the property under appeal to be $140,000.This was based on the Board valuing a neighboring property at $126,000.Complainant offered into evidence the following exhibits.
Exhibit 1 consisted of Complainant’s narrative discussion of the valuation and past tax history of his property and eleven other documents: (a) Change of Assessment Notice; (b) Graph on change in value from 2006 to 2007; (c) Board Decision and Notice; (d) 1999 Sales Contract for subject; (e) Graph comparing previous owner’s purchase price to Mr. Worth’s purchase price; (f) Graph comparing taxes from 1999 to 2007 and 2000 Schedule A (1040) showing real estate tax deduction; (g) 1999 Realtor’s Profit documenting property taxes; and (h) Email to Complainant from Tax Relief Now regarding SB 711 and HJR 43.
Exhibit 2 consisted of Complainant’s narrative explaining the documents contained in the exhibit, Change of Assessment Notice, Protest Letter and photographs of the subject property and the five properties listed on the Change of Assessment Notice used for the mass appraisal of the subject property.
Exhibit 3 consisted of Complainant’s narrative relating to three properties Mr. Worth deemed to be comparable to the subject, with photographs and realtors’ listing sheets on each of the three properties.
Exhibit 4 was a narrative of Complainant, with photographs showing various condition and deferred maintenance problems with the subject property.
Counsel for Respondent objected to Exhibits 1 and 3 on the grounds of Hearsay, Lack of Foundation and Relevancy.The objections were taken under advisement to be ruled on in this Decision. See, Ruling on Objections to Exhibits, infra.Objection was made to Exhibit 2 on the ground of relevance.The objection was sustained and Exhibit 2 was not received into evidence.It was accepted into the case file only for the purpose of maintaining the record of the exhibit being offered, but is not relied upon in a determination of fair market value for the subject property.No objection was made to Exhibit 4 and it was received into the record.
Respondent placed into evidence the testimony of Ms. Sarah Curran, Missouri State Certified Residential Real Estate 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 $161,000 based upon a sales comparison approach to value.In performing her sales comparison analysis, the appraiser relied upon the sales of three properties which she deemed to be comparable to the subject property.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.
2.The subject property is located at906 Tavalon Avenue,Rock Hill,Missouri.The property is identified by locator number 22L530506.The property consists of 5,985 square foot lot improved by a one and a half-story brick, single-family structure of average quality construction.The house was built in 1950 and appears to be in average condition.The residence has a total of seven rooms, which includes three bedrooms, two full baths, and contains 1,175 square feet of living area.There is a full unfinished basement.
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2007 to be $140,000.
5.The properties relied upon by Respondent’s appraiser in performing her appraisal were comparable to the subject property. The properties were located within .12 of a mile or less to the subject.Each sale property sold at a time relevant to the tax date of January 1, 2007, in a range from February 2005 to October 2006.The sale properties were similar to the subject in style, quality of construction, age, room, bedroom and bathroom count, living area (ranging from 1060 to 1172 square feet of living area), location, site size and other amenities of comparability.
6.The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.The net adjustments ranged from -12.4% to -14%.This level of adjustment as a percentage of the sales prices is acceptable given the adjustment for difference in condition which needed to be made.The major adjustment required for each sale property was a -$20,000 to account for the good condition of the comparables versus the average condition of the subject.
7.The adjusted sales prices for the comparables ranged from $159,200 to $163,300, with a median of $162,000 and a mean of 161,500.The appraiser concluded on a $161,000 value which calculated to a value per square foot of $137.02 compared with the sales prices per square foot of living area for the comparables which ranged from $141.98 to $179.15.The indicated per square foot value is reasonable given the average condition for the subject as compared to the good condition for the sale properties.
8.The appraiser’s conclusion of value is less than one percent (1%) above the value concluded by the Board.The appraisal gives substantial and persuasive evidence in support of the Board’s value, but such a slight variance from the Board value does not warrant an increase in value.
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.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341 (Mo. 2005); Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.Snider, Hermel & Cupples Hesse, supra.As is discussed below, Complainant has failed to present substantial and persuasive evidence upon which the Hearing Officer can conclude the fair market value of the subject property to have been $140,000 on January 1, 2007.
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.
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).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. 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).
The Curran appraisal follows an accepted approach to value, the sales comparison methodology.Therefore, the conclusion of value presented by the appraiser is based upon an approach that is followed by the Commission in making determinations of value in appeals.In point of fact, generally the sales comparison approach represents the strongest methodology for the valuation of an owner occupied home, provided there is sufficient relevant sales data.In this instance, Respondent’s sales data was clearly relevant and persuasive to establish value.The basis for Mr. Worth’s value was not any of the recognized approaches to valuation.
Ruling on Objections to Exhibits
Respondent’s Objections to Exhibit 1 are well taken.The documents present some general foundational information relative to the value set by the Assessor and by the Board.However, none of the documents present any evidence which is relevant to support the owner’s opinion of value of $140,000.Comparisons of taxes presents nothing to determine what a willing buyer and seller would have agreed to as the sale price for the subject property on January 1, 2007.
Objections are sustained and Exhibit 1 is excluded from evidence. It is maintained in the case file only to maintain what document was tendered as evidence by the Complainant.It is not used as a basis for valuation in this appeal.
Exhibit 2 was excluded at hearing.All of the information presented in Exhibit 2 relates to the original valuation made by the Assessor’s computer assisted mass appraisal of the property. The Board rejected that value.Therefore, that value is not at issue before the Commission in the appeal.The value being challenged is the value of $160,000 set by the Board.Although two of the five properties utilized in the mass appraisal were also use by Ms. Curran in her appraisal (1364 N. Berry Road and 926 Tavalon Avenue) the information contained in Exhibit 2 provides nothing upon which a conclusion of value of $140,000 could be concluded.
Respondent’s objections to Exhibit 3 are also well taken.The information on three properties from an unidentified realtor or realtors is classic hearsay.Furthermore, the unadjusted sales prices do not provide a recognized approach to value.There is no evidence to establish that Mr. Worth has the experience or qualifications to qualify as an expert in the appraisal of real property.The owner may not support an opinion of value by reference to comparable sales unless the owner qualifies as an expert.State ex rel. Missouri Hwy. and Tr. Comm’n v. McDonald’s Corp., 872 S.W.2d 108, 113 (Mo. App. E.D. 1994); State ex rel. Missouri Hwy. and Tr. Comm’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990).
Objections are sustained and Exhibit 3 is excluded from evidence. It is maintained in the case file only to maintain what document was tendered as evidence by the Complainant.It is not used as a basis for valuation in this appeal.
Complainant Fails To Meet 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, 2007.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897.Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).
The owner of property is generally held competent to testify to its reasonable market value. Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970).The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).Mr. Worth’s opinion of fair market value is not based upon any of the documents tendered as exhibits in this case.His opinion of value is based upon a value of $126,000 which he asserts was placed on a neighboring property in an appeal before the Board of Equalization.
This is not a proper basis for an owner’s opinion.Therefore, Mr. Worth’s assertion that a willing buyer and seller would have agreed to a sales price of $140,000 on January 1, 2007 has no probative weight.A comparison of values set by the Assessor or by the Board on any given property or properties does not establish value.Each appeal is decided on its own merit and the evidence received into the record on the issue of true value in money.The Commission is not bound by values on other properties which may have been set by either the Assessor or the Board.Such values are irrelevant in determining market value for a given property under appeal.
Complainant failed to meet his burden of proof to present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board and establish the true value in money for his property.
The assessed valuation for the subject property as determined by the Board of Equalization forSt. LouisCountyfor the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2007 and 2008 is set at $30,400.
Complainant may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Failure to state specific facts or law upon which the appeal is based will result in summary denial.Section 138.432, RSMo 2000.
Any application for review must be mailed to the Commission at:State Tax Commission, P. O. Box146, Jefferson City, MO 65102-0146, and a copy mailed to the Attorney for Respondent, Assessor and Collector at the address given below in the Certificate of Service.
If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission and an order to the Collector to release and disburse the impounded taxes.§139.031.3 RSMo.If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of 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 June 5, 2008.
STATE TAX COMMISSION OFMISSOURI
W. B. Tichenor
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 5thday of June, 2008, to:David Worth, 906 Ravalon Avenue, St. Louis, MO 63119, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Philip A. Muehlheausler, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.