State Tax Commission of Missouri
FRANZ & AUDREY ZINSSER,)
)
Complainants,)
)
v.) Appeal Number 09-10161
)
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 $120,000, residential assessed value of $22,800.
Complainant, Franz Zinsser, appeared pro se.
Respondent appeared by Associate County Counselor Paula J. Lemerman.
Case heard and decided by Hearing Officer Maureen Monaghan.
ISSUE
Complainants appeal, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which reduced sustained the valuation by the Assessor.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.Complainants timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.Evidentiary hearing was held on June 23, 2010, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
2.Assessment.The Assessor appraised the property at $125,100, residential assessment of $23,770.The Board of Equalization sustained the value.
3.Subject Property.The subject property is located at 6380 Deer Run, St. Louis County, Missouri.The property is identified by parcel number 08F220134.The property consists of 14,504 square foot lot improved by a ranch-style, brick house with full basement, and a two-car attached garage.The improvements are considered to be of average quality construction.The house was built in 1968 and appears to be in overall average physical condition for the age of the house.The residence has a total of eight rooms above grade, with four bedrooms, two full baths, and contains 1,696 square feet of living area.
4.Complainants’ Evidence.Mr. Zinsser testified on behalf of Complainants.He stated his opinion of value as of January 1, 2009, to be $80,762.The following exhibits were offered into evidence by the taxpayer.
|
EXHIBIT |
DESCRIPTION |
DISPOSITION |
|
A |
Narrative and Charts of Sales and Costs |
Admitted |
|
B |
Narrative and Various Charts |
Admitted |
None of the exhibits or the testimony of Mr. Zinsser provided a basis to establish the true value in money of the subject property as of January 1, 2009, based on any recognized method for the appraisal of real property for ad valorem tax purposes.Complainants’ 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 $80,762, as proposed.There was no evidence of new construction and improvement during 2009, therefore, the assessed value for 2009 remains the same for 2010.[1]
5.Respondent’s Evidence.Respondent presented the testimony and appraisal report of Terry Kraus, Missouri State Certified Residential Real Estate Appraiser.The properties relied upon by Respondent’s appraiser, in performing his appraisal, were comparable to the subject property for the purpose of making a determination of value of the subject property.The sale properties were located within .47 of a mile to 1.05 of a mile from the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009. (September to December 2008)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 appropriate adjustments to account for the differences between the subject and each comparable.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 $120,000.
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.
The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, 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 failed to rebut the presumption of correct assessment by the Board.Respondent presented substantial and persuasive evidence to rebut the presumption and establish the fair market value of the property as of January 1, 2009.
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]
Respondent’s appraiser concluded the fair market value of the subject relying on this Standard.[8]
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.[9]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.[10]Complainants did not present an opinion of value for their property based upon a recognized appraisal methodology.Respondent’s appraiser make a determination of the true value in money for the subject property based upon the comparable sales approach.
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.[11]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.”[12]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[13]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.[14]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[15]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[16]The Complainant testified that it is his opinion that his subdivision experienced a peak of sale price in October 2008 and a crash of market values in December 2008 due a high number of foreclosure sales.
The Complainant determined the market value by taking the County’s mass appraisal cost value estimate of the subject property and compared it with the cost value estimate of properties that sold to calculate a cost value ratio.The Complainant then took the cost value ratio and multiplied it by the sales price of the comparable properties.The Complainant then averaged the results for a determination of value.The Complainant used this approach twice with the resulting value for the subject property of $65,705 and $80,762.
This approach is not a recognized approach for determining value.First, Complainant did not verify any of the sale prices.Second, it is unknown how comparable the properties are to the subject property.Lastly, because of the age of the subject property and potentially the other properties, the cost determination is not a reliable method to determine value.
Complainant also provided listing of properties and their sale prices.The sale prices range from December 2008 to August 2010.Once again, information regarding the comparable sales was not provided and it is unknown how comparable they are with the subject property and the sale prices were not verified.
The owner’s opinion of value is not based upon proper elements or a proper foundation.Therefore, it has no probative weight for this appeal.The taxpayers failed to meet their burden of proof to present substantial and persuasive evidence to establish that the fair market value of the property under appeal was $80,762 as of January 1, 2009.
Respondent Proves Value
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.[17]Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $120,000 for the subject property.Mr. Krauss reviewed the market data of the area where the subject property was located.His review of the market data shows that the property values for that area have declined from their height in 2006 and the market times have increased.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.
Mr. Krauss verified the sales of the comparable properties.He selected properties that were similar to the subject property in age, number of rooms, square footage and location. One comparable sale was a foreclosed property.The appraiser included the property because of its similarities in quality, size, style, and proximity to the subject.The adjustments made the Mr. Krauss 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.
The appraisal by Mr. Krauss constituted substantial and persuasive evidence to rebut the presumption of correct assessment and establish the true value in money as of January 1, 2009, for the property under appeal to be $120,000.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization forSt. LouisCountyfor the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2009 and 2010 is set at $22,800.
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 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. [18]
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 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 July 2, 2010.
STATE TAX COMMISSION OF MISSOURI
_____________________________________
Maureen Monaghan
Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 2ndday of July, 2010, to:Franz Zinsser, 6380 Deer Run Rd., St. Louis, MO 63033-8113, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Michael Brooks, ActingAssessor, 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
[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.
[9] 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).
[10] 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).
[12] 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] 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).
[16] 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).