State Tax Commission of Missouri
FRANK ROSNER,)
)
Complainant,)
)
v.) Appeal No.09-10152
)
MICHAEL BROOKS,)
ACTING ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $145,000, residential assessed value of $27,550.Complainant appeared pro se.Respondent appeared by Associate County Counselor Paula Lemerman.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation, the decision of the St. Louis 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, 2009.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 St. Louis County Board of Equalization.A hearing was conducted on July 27, 2010, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
2.Assessment.The Assessor appraised the property under appeal at $148,100, a residential assessed value of $28,140.The Board sustained the assessment.[1]
3.Subject Property.The subject property is located at 33 Montauk Dr. St. Louis County, Missouri.The property is identified by locator number 15N220111.The property consists of 10,752 square foot lot improved by a ranch-style, single-family residence built in 1958.The gross living area is 1,696 square feet.The home is on a concrete slab foundation.The exterior is brick veneer and hardboard siding over frame construction.There is a one-car attached garage.The house has eight rooms, four bedrooms and two full bathrooms.The structure is considered to be in fair condition due to the exterior framing, soffits and fascia are all in deteriorating condition, with no interior updates.The quality of materials and workmanship is average, consistent with surrounding properties.There was no sale of the property noted within three years prior to the tax date of January 1, 2009.[2]
4.Complainant’s Evidence.Complainant testified in his own behalf.Mr. Rosner stated his opinion of the fair market value of the property as of January 1, 2009, to be $120,000 based upon the age and condition of the house.The following exhibits were offered into evidence by Complainant.
EXHIBIT |
DESCRIPTION |
|
A |
Information and photographs on 3 properties |
|
B |
Plat map of subject subdivision |
|
C |
List of 2007 Property Valuations |
|
D |
Information on 2 properties |
|
E |
CMA Report, dtd 6/30/08 |
|
F |
Listing of condition items on subject |
|
G |
2007 & 2008 Change Notices on subject |
|
H |
9 photographs showing condition of subject |
|
I |
Newspaper article |
There were no objections to Exhibits B, F, G and H and they were received into evidence.Counsel for Respondent objection on the grounds of hearsay, relevance, lack of foundation to Exhibits A, C, D, E & I.Objections were sustained.Exhibits A, C, D, E & I and the testimony relating thereto were received only as an offer of proof and maintained in the Commission filed on that basis, but not as evidence for a determination of the true value in money of the subject property.Said exhibits did not support the owner’s opinion of $120,000 and did not constitute substantial and persuasive evidence to prove any given value.See, Complainant Failed to Prove Value of $120,000, Owner’s Opinion of Value, infra.
There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010.[3]
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, 2009, to be $120,000, as proposed.
5.Respondent’s Evidence.Respondent presented the appraisal report[4] and testimony of Russ Kohl, Residential Appraiser for St. Louis County.Mr. Kohl concluded a fair market value for the subject property as of January 1, 2009, of $145,000 based upon a sales comparison approach.The properties relied upon by Respondent’s appraiser were comparable to the subject property for the purpose of making a determination of value of the subject property. The four properties were all located within the subject subdivision and within less than a quarter of a mile from the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009.The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.
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 largest single adjustment to each comparable was for condition.This adjustment properly accounted for the fair condition of the subject, which was inferior to each of the comparables.
6.Conclusion of Value.Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2009, to be $145,000, residential assessed value of $27,550.[5]
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.[6]
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[7]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.[8]Complainant failed to present substantial and persuasive evidence to rebut the presumption and establish value.Respondent’s appraiser presented substantial and persuasive evidence that rebutted the presumption of correct assessment and proved a value of $145,000.
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.[9]True value in money is defined in terms of value in exchange and not value in use.[10]It is the fair market value of the subject property on the valuation date.[11]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.[12]
Respondent’s appraiser developed his conclusion of fair market value under the Standard for Valuation.[13]
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.[14]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.[15] The taxpayer failed to present an opinion of value based upon any of the accepted approaches to the appraisal of property for an ad valorem tax appeal before the Commission.Mr. Kohl developed for the Respondent the sales comparison approach to value and concluded his opinion of value of $145,000 based upon that well recognized appraisal methodology.
Complainant Failed to Prove Value of $120,000
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.[16]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.”[17]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[18]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.[19]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[20]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[21]The opinion of value provided by Mr. Rosner was not the result of the development of any recognized appraisal methodology.It was an owner’s opinion only based upon the age and condition of the house.The owner’s opinion was not based upon proper elements or a proper foundation.Therefore, it has no probative value in the appeal.No substantial and persuasive evidence was presented upon which it can be concluded that on January 1, 2009, a willing buyer and seller would have agreed to a sale price of only $120,000 for the Complainant’s property.
Exhibits A & D – Sales Listings
The exhibits tendered by Mr. Rosner that gave some listings of sale prices[22] were not admissible into evidence.Realtor data sheets are hearsay.Appraisers are permitted to use such documents as a source of data on comparable sale properties to verify condition, amenities, terms of sale, etc., in preparing an appraisal.An owner not being qualified as an expert in the appraisal of real property does not possess the training, education or experience to establish an indicated value based upon such unadjusted sales information.
In this particular instance, Complainant sought to introduce documents providing either sales or listing information on five properties.The sales or listing prices were only provided on four of the properties and those were: $161,200, $155,000, $163,000 and $160,500.None of those values support the owner’s opinion for the subject of $120,000.Furthermore, the taxpayer did not actually conclude his opinion of value from this information.
Exhibit C – 2007 Property Valuations
This exhibit contains the listing of all the properties in the subject subdivision showing the 2007 assessed values for each property.Mr. Rosner did not testify that his opinion of value of $120,000 was based upon this document.No foundation was provided to establish any relevance for this document for valuing the property under appeal for the 2009-10 assessment.
Exhibit E- CMA Report
Mr. Rosner also sought to introduce into evidence a June 30, 2008 CMA Report.[23]Taxpayers often seek to introduce such documents into evidence in appeals before the Commission.The reports are hearsay.On its own such a report has no correlation to an appraisal of the property under appeal.A CMA Report lacks any foundation to be received into evidence.It is completely irrelevant to the issue of the true value in money of a property under appeal.Accordingly, such an exhibit is not received into the evidentiary record.
This tendered exhibit, for example provides basic information on 7 sold properties, with a high sale price of $186,500, a low of $141,000 and a median of $165,000.Nothing from that data provides a basis to support an opinion of value for the subject as of January 1, 2009, of only $120,000.In point of fact, of the 12 Active, Option, Pending and Sold properties shown on Exhibit E, there is not a single property with a list or sold price close to $120,000.Here again, Mr. Rosner did not actually rely on this document to come to his conclusion of value.
Exhibit I – Newspaper Article
Complainants in many instances seek to offer into evidence various types of newspaper or internet articles, which they feel support some aspect of their case.As in this case such tendered exhibits are simply hearsay and lack relevance to prove fair market value of any given property.Mr. Rosner sought to introduce Exhibit I to establish that as a homeowner, if he were to sell his property, various disclosures would have to be made.There was no issue at hearing relative to real estate disclosure requirements.Therefore, there was no material dispute on the matter.Furthermore, the article has no relevance to the issue of the value of the subject property.
Respondent Proved Value of $145,000
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.[24]Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $145,000 for the subject.Respondent’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach.The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences.
The adjustments made the Mr. Kohl were consistent with generally accepted guidelines for the appraisal of property of the subject’s type.The adjustments properly accounted for the various differences between the subject and each comparable.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2009 and 2010 is set at $27,550.
Application for Review
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 for this Decision.The application shall contain specific facts or law as 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. [25]
Disputed Taxes
The Collector of St. Louis 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 September 3, 2010.
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 3rdday of September, 2010, to:Frank Rosner, 10 Vicksburg Station, St. Charles, MO 63303,Complainant;Paula Lemerman, Associate County Counselor, Attorney for Respondent, County Government Center, 41 South Central Avenue, Clayton, MO 63105; Michael Brooks, Acting Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, 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
[7] 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)
[8] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[9] 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).
[10] 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).
[12] 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.
[14] 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).
[15] 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).
[17] 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).
[20] 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).
[21] 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).