State Tax Commission of Missouri
GEORGE & SAUNDRA BRENNER,)
v.) Appeal Number 09-12352
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.True value in money for the subject property for tax years 2009 and 2010 is set at $265,600, residential assessed value of $50,465.Complainant appeared pro se.Respondent appeared by Associate County Counselor, Paula J. Lemerman.
Case heard and decided by Hearing Officer Maureen Monaghan.
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 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 21, 2010, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
2.Assessment.The Assessor appraised the property under appeal at $265,600, assessed residential value of $50,465.The Board of Equalization reduced the value to $253,500, assessed residential value of $48,165.
3.Subject Property.The subject property is located at 508 Redondo Dr., Chesterfield, Missouri.The property is identified by locator number 21S520022.The property consists of an approximately 33,250 square foot lot improved by a 1.5 story brick and frame constructed house with full, unfinished basement, two-car attached garage, and pool.The improvements are considered to be average quality construction and in fair condition.The home was built in 1967.The property suffers some condition issues.The electric wiring is aluminum wiring.The basement leaks.The pool suffered extensive damage after vandalism.The repairs were made during 2009.The residence has a total of nine rooms above grade that includes five bedrooms, three full baths, and contains 2,579 square feet of living area.
4.Complainant’s Evidence.Mr. Brenner testified in his own behalf.He gave his opinion of value for the subject property as of January 1, 2009, to be $194,000.He offered the following exhibits:
A.Board of Equalization Appeal Form;
B.Proposal for Pool Repairs;
C.Offer to Purchase subject property dated July 18, 2005; and
D.Photographs of the damage to the pool.
Exhibit A was admitted into evidence.Complainant testified to the information on the documents.The information includes repairs needed on the property and bids to repair, if any.
Exhibit B was admitted into evidence.Complainant did not accept the bid for the repairs and testified to the costs to repair actually incurred.
Exhibit C was excluded as irrelevant.
Exhibit D was admitted into evidence.
Complainant testified that due to an act of vandalism, pipes for his in-ground pool froze and burst.His insurance did not cover the damage.He repaired the pool during 2009.The repairs included digging up the brick patio to uncover the pipes and repair damage to them.The plaster work on the pool had to be repaired.Complainant did some of the work himself.He paid $10,000 for repairs to the plaster and fix the coping.
Complainant also testified that he has problems with the foundation to the house.The basement leaks and it cannot be finished and suffers from mold and water damage.
Complainant also testified that his home has aluminum wiring.
Complainant did not present an opinion of the true value in money for the subject property as of January 1, 2009, based upon a recognized valuation methodology.Therefore, 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 $194,000, as proposed.
5.New Construction and Improvement. There were repairs and construction of the pool in 2009.The Respondent’s appraiser determined a value for 2009 when the pool was in poor condition and a value in 2010 when the pool had been repaired.Both determinations of value are in excess of the Assessor’s originally determined value of $265,600.
6.Respondent’s Evidence.Respondent presented the appraisal report and testimony of Sarah Curran. Sarah Curran is a Missouri certified residential appraiser. The appraiser developed the sales comparison approach to value.
The properties relied upon by Respondent’s appraiser, in developing the sales comparison approach, were comparable to the subject property. The properties were located within .18 of a mile to .25 miles of 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, 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 adjustments include the pool, which the comparables did not have, and condition adjustment.The appraiser determined the adjustment for the pool before the repairs (2009) and after the repairs (2010).
Respondent’s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2009, to be $296,000 for 2009 and a value of $316,000 for 2010.However, Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor and not for the purpose of raising the assessment above that value.Respondent meet the standard of clear, convincing and cogent evidence in this appeal to sustain the original valuation of $265,600.
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.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.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.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.
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.True value in money is defined in terms of value in exchange and not value in use.It is the fair market value of the subject property on the valuation date.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.
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.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. Complainant failed to present an opinion of value which was based upon any of the recognized methodologies for the appraisal of real property for ad valorem tax purposes.Respondent’s appraiser developed the sales comparison approaches to arrive at her conclusion of value.
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.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.”
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.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.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.Mr. Brenner opined a value as of January 1, 2009 of $194,000.It is unknown how he reached this valuation.He presented evidence of bids for repairs but did not use the information to make adjustments in a sales comparison approach or in a cost approach.
The owner’s opinion was not based upon proper elements or a proper foundation.No probative weight can be given to it.Mr. Brenner’s testimony as to his opinion of value fails to meet the standard to substantial and persuasive evidence to rebut the presumption of correct assessment by the Board.
Summary and Conclusion
Complainant has failed to meet his burden of proof.The value established by the Board stands as not rebutted.
Evidence of Increase in Value
In any case in St. Louis County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.The evidence presented by the Respondent was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the fair market value of the property under appeal, as of January 1, 2009, to be $296,000 without repairs and $316,000 after the repairs.However, under the Commission rule just cited and Supreme Court decision the assessed value cannot be increased above $50,465 in this particular appeal.
Respondent Proves Value
The Respondent has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program.There is a presumption in this appeal that the original valuation was made by a computer, computer-assisted method or a computer program.There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $265,600, appraised value, Respondent’s evidence must come within the guidelines established by the legislature and must clearly and convincingly persuade the Hearing Officer as to the value sought to be sustained.
The statutory guidelines for evidence to meet the standard of clear, convincing and cogent include the following:
(1)The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and
(2) The purchase prices from sales of at least three comparable properties and the address or location thereof.As used in this paragraph, the word comparable means that:
(a)Such sale was closed at a date relevant to the property valuation; and
(b) Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used.Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics.
Clear, cogent and convincing evidence is that evidence which clearly convinces the trier of fact of the affirmative proposition to be proved.It does not mean that there may not be contrary evidence.The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt.“For evidence to be clear and convincing, it must instantly tilt the scales in the affirmative when weighed against the evidence in opposition and the fact finder’s mind is left with an abiding conviction that the evidence is true.”
It is generally recognized that the sales comparison approach provides the best indicator of value for owner occupied residential properties where sufficient sales data exists for performing the appraisal.The conclusion of value placing greatest reliance on the sales comparison approach was well supported.Both the gross and net percentages of adjustments under the sales comparison approach fell within a narrow and well accepted range.This provides a check on and substantiation of the comparability of the sale properties to the subject.
The appraisal report and supporting testimony of Ms. Curran meets the required statutory standard of clear, convincing and cogent evidence to sustain the valuation of $265,500.
The assessed valuation for the subject property as determined by the Assessor and reduced 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 $50,465.
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.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.
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 .
STATE TAX COMMISSION OFMISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 27thday of July, 2010, to:George Brenner, 508 Redondo Drive, Chesterfield, MO 63017,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.
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
 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)
 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).
 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.
 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).
 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).
 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).
“Section 138.060 prohibits an assessor from advocating for or presenting evidence advocating for a higher ‘valuation’ than the ‘value’ finally determined by the assessor. … . Because the legislature uses the singular terms ‘valuation’ and ‘value’ in the statute, however, it clearly was not referring to both true market value and assessed value.While the assessor establishes both true market value and assessed value, which are necessary components of a taxpayer’s assessment, as noted previously, the assessed value is the figure that is multiplied against the actual tax rate to determine the amount of tax a property owner is required to pay.The assessed value is the ‘value that is finally determined’ by the assessor for the assessment period and is the value that limits the assessor’s advocacy and evidence.Section 138.060.By restricting the assessor from advocating for a higher assessed valuation than that finally determined by the assessor for the relevant assessment period, the legislature prevents an assessor from putting a taxpayer at risk of being penalized with a higher assessment for challenging an assessor’s prior determination of the value of the taxpayer’s property.”State ex rel. Ashby Road Partners, LLC et al v. STC and Muehlheausler, 297 SW3d 80, 87-88 (Mo 8/4/09)