State Tax Commission of Missouri
HASMUKH & KUSUMBEN PATEL,)
)
Complainants,)
)
v.) Appeal Number 08-79007
)
LISA POPE, ASSESSOR,)
PLATTE COUNTY,MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the Platte County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.Hearing Officer finds Complainants did not rebut the presumption of correct assessment by the Board.True value in money for the subject property for tax year 2008 is set at $210,000, residential assessed value of $39,900.
Complainant, Hasmukh Patel, appeared pro se.
Respondent appeared by pro se.
Case heard and decided by Senior Hearing Officer Luann Johnson.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2008.
SUMMARY
Complainant appeals, on the ground of overvaluation, the decision of the Platte County Board of Equalization, which sustained the valuation of the subject property of $221,005.The Assessor determined an appraised value of $210,000 (assessed value of $39,900, as residential property).Complainant proposed a value of $180,000 (assessed value of $34,200).A hearing was conducted on November 13, 2008, at thePlatteCountyAdministrationBuilding,Platte City,Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant’s Evidence
Complainant asserts that the national market is in crisis; stating recent financial failures, increasing unemployment, and stock market declines.Complainant presents five sales occurring between April, 2008 and October, 2008, where two-story single-family residences sold for $160,000 to $187,000.
Respondent’s Evidence
Respondent placed into evidence the testimony of Mr. Clint Boston, appraiser forPlatteCounty.The appraiser testified as to his appraisal of the subject property.The Appraisal Report, Exhibit A, of Mr. Boston was received into evidence.Mr. Boston arrived at an opinion of value for the subject property of $210,000 based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of three properties deemed 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 Platte County Board of Equalization.
2.The subject property is located at7654 Pomona Ave.,Kansas City,Missouri.The property is identified by parcel number 20-6.0-13-200-005-138-000.The property consists ofan 8,353 square foot lot improved by a two-story, single-family structure of average quality construction.The house was built in 1993 and appears to be in average condition.The residence has a total of seven rooms, which includes four bedrooms, two and one-half baths, and contains2,206 square feet of living area.There is a full finished basement and a built-in two-car garage. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2008.
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, 2008, to be $180,000, as proposed.Complainant presented five sales occurring after the tax day and more than a year after January 1, 2007. Exhibit 1.All proposed comparables are two story homes of similar age with four or five bedrooms and located in the Park Hill school district.However, three of the sales were “as is”; one sale required “sweat equity”, and the final sale had been reduced by $15,000 before being listed at $195,000 and selling for $187,500.Complainant is not an appraiser and made no adjustments to the comparables for the change in economic conditions between January 1, 2007, and the sale dates nor was he able to make any adjustments for market reaction to areas of significant variation between the sales and the subject property.We do not have enough information to ascertain the value of the subject property using these proposed comparable sales.
5.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 properties were located withinone-tenth of a mile of the subject.Each sale property sold at a time relevant to the tax day.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.
6.The comparables were described as follows:
Comparable 1 (7648 N. Pomona Place, Kansas City, Missouri) sold in 2007 for $230,000.This property consists of an 8,720 square foot lot improved by a two-story single-family structure of average quality construction.The house was built in1993 and appears to be in good condition.The residence has a total of seven rooms, which includes four bedrooms, two and one-half baths, and contains 2,526 square feet of living area.There is a full finished basement.There is an attached two-car garage.
Comparable 2 (7642 N. Atkins Place, Kansas City, Missouri) sold in 2007 for $212,000.This property consists of an 18,586 square foot lot improved by a two story single-family structure of average quality construction.The house was built in 1994 and appears to be in good condition.The residence has a total of eight rooms, which includes four bedrooms, two and one-half baths, and contains 2,795 square feet of living area.There is a full unfinished basement. There is a built-in two-car garage.
Comparable 3 (7629 NW Rhode Avenue, Kansas City, Missouri) sold in 2008 for $215,000.This property consists of an 11,290 square foot lot improved by a two-story single-family structure of average quality construction.The house was built in 1992 and appears to be in good condition.The residence has a total of seven rooms, which includes four bedrooms, two and one-half baths, and contains 2,011 square feet of living area.There is a full unfinished basement.There is a built-in two-car garage.
7.The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.All adjustments appear to be appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.
8.The net adjustments for Comparable 1 amounted to -$11,150 or 4.85 % of the sales price.The net adjustments for Comparable 2 amounted to -$10,020 or 4.73 % of the sales price.The net adjustments for Comparable 3 amounted to +$9,260 or 4.31% of the sales price.
9.The adjusted sales prices for the comparables calculated to $218,850, $201,980 and $224,260, respectively.The appraiser concluded on a $210,000 value which calculated to a value per square foot of $95.19 compared with the sales prices per square foot of living area for the comparables of $91.05, $75.85 and $106.91. The comparison of the value per square foot provides a validation check for the appraisal, to demonstrate that the indicated value is consistent with the market for properties such as the subject.
10.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, 2007, to be $210,000.
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.[1]
Official and Judicial Notice
Agencies shall take official notice of all matters of which the courts take judicial notice.[2]
Courts will take judicial notice of their own records in the same cases.[3]In addition, courts may take judicial notice of records in earlier cases when justice requires[4] or when it is necessary for a full understanding of the instant appeal.[5] Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts.[6]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[7]
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, even if simply to sustain the value made by the Assessor, 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, 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.[8]
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]It is the fair market value of the subject property on the valuation date.[10]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.[11]
Duty to Investigate
In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to 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 its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties.[12]
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.[13]
Trier of Fact
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.[14]
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.[15]
Missouricourts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.[16]
Opinion Testimony by Experts
If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.
The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.[17]
Respondent’s Burden of Proof
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.[18]
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, 2008.[19]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.”[20]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[21]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.[22]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[23]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[24]“Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.”[25]
A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.”[26]
Sale of Subject
Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time.The actual sale price is a method that may be considered for estimating true value.The actual sales price, between a willing seller who is not obligated to sell and a willing buyer who is not compelled to buy, establishes an outer limit on the value of real property.[27]
Respondent Proves Value
Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2008, to be $210,000.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. Boston 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 net adjustments to the sale properties fell within a very narrow range from 4.31% to 4.85%.Even the gross adjustments were in a very acceptable range from 4.85% to 11.20%.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forPlatteCountyfor the subject tax day is SET ASIDE.
The assessed value for the subject property for tax year 2008 is set at $39,900.
A party 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.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. [28]
The Collector of Platte 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 November 26, 2008.
STATE TAX COMMISSION OFMISSOURI
_____________________________________
Luann Johnson
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 26thday of November, 2008, to:Hasmukh Patel, 7654 N. Pomona Avenue, Kansas City, MO 64152, Complainant; John Shank, 9800 N.W. Polo, Suite 100, Kansas City, MO 64153, Attorney for Respondent; Lisa Pope, Assessor; 415 Third Street, P.O. Box 20, Platte City, MO 64079; Sandra Krohne, Clerk, 415 Third, P.O. Box 30, Platte City, MO 64079; Donna Nash, Collector; 409 Third, P.O. Box 40, Platte City, MO 64079.
___________________________
Barbara Heller
Legal Coordinator
[3] State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898).
[4] – Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929)
[5] State ex rel St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956).
[6] In re Murphy, 732 S.W.2d 895, 902 (Mo. banc 1987); State v. Gilmore, 681 S.W.2d 934, 940 (Mo. banc 1984); State v. Keeble, 399 S.W.2d 118, 122 (Mo. 1966).
[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).
[11] 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.
[13] 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).
[14] 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).
[15] 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).
[16] 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] Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. SC. 2004); Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).
[20] 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).
[23] 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).
[24] 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).