State Tax Commission of Missouri
JACK HOKE COMPANIES,)
)
Complainants,)
)
v.)Appeal(s) Number 07-33016
)
RICK KESSINGER, ASSESSOR,)
GREENE COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
The decision of the Board of Equalization setting value at $95,800 residential (assessed value $18,210) is SET ASIDE. The Commission sets value at $90,700 (assessed value $17,233).
ISSUE
The issue in this case is the true market value of the residential real property on January 1, 2007.
SUMMARY
The subject property is a residence on a site which measures 92’ x 137’.The Assessor valued the land and improvement at $95,800 residential.The Board of Equalization sustained the valuations by the Assessor.Complainant appealed and proposed a value at the time of the appeal of $82,000.The evidentiary hearing was held on February 28, 2008, in the Historic Greene County Courthouse, Springfield, Missouri. Jack Hoke Companies appeared by counsel Jack Hoke.Assessor Rick Kessinger appeared in person and by counsel Nichole Lindsey.Evidence was heard and the case was taken under advisement.
EXHIBITS
Complainant offered the following evidence:
Exhibit A:Appraisal
Testimony of David Mathewson, Certified General Appraiser
All exhibits were admitted into evidence.
Respondent offered the following exhibits:
Exhibit 1:Appraisal for Subject Property.
Exhibit 2:Property Record Card for Subject Property.
Testimony of Judith Crane
All exhibits were admitted into evidence.
FINDINGS OF FACT
1.Jurisdiction is proper.Complainant timely filed its appeal from the decision of the Greene County Board of Equalization.
2.The subject property is a site measuring 92’ x 137’ improved with a one-story, three bedroom, two bath home containing 1,324 square feet of gross living area with a crawl space.The home has a two-car attached garage. The home is 41 years old and in average condition with the exception of damage to the roof which occurred from hail in 2006 and has not been repaired.The property is identified as parcel number 1802301123, more commonly known as 831 W. Valley Court, Springfield, Missouri.
3.Complainant’s appraiser found sales of three similar homes which sold for $84,700; $91,500; and $96,000 in January to September 2006.Complainant’s appraiser adjusted for the condition of the roof of the subject property ($6,000), additional bathroom in the subject property ($700), and, on one property, a fireplace ($1,000).After adjustments, these properties indicated a range of value for the subject property between $80,400 and $90,700.Comparable sale number 2 occurred in September, 2006, less than four months prior to the effective date of January 1, 2007.Comparable 2 had an adjustment of $700 for one less bath and $6,000 adjustment due to the condition of the roof on the subject property.No adjustment was necessary for square footage since comparable 2 was within 40 square feet of the subject property and was similar in all other aspects.Comparable 2 sold for $96,000 and the adjusted sales price is $90,700.Based upon sale of Comparable 2 and the other comparables, Complainant’s appraiser determined a market value for the subject property of $85,000 on January 1, 2007.
4.Since the house is being rented, the Complainant’s appraiser developed an income approach with a resulting value of $83,400.
5.Under the cost approach, the Respondent determined a value for the site of $25,000 and a value of the improvement after depreciation of $70,828, for a total value of $95,828.
6.Respondent’s appraiser found sales of three similar homes which sold for $104,900; $105,000 and $109,000 in 2005.Respondent’s appraiser adjusted for square footage ($3,860), bathroom count ($750), and carport ($3,000).After adjustments, these properties indicated a range of value for the subject property between $98,000 and $101,540.Based upon these sales, Respondent’s appraiser determined a market value for the subject property of $99,000 on January 1, 2007.
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lang=EN-CA style=’mso-ansi-language:EN-CA’>CONCLUSIONS OF LAW
Jurisdiction
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 Assessor, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.Section 138.431.4, RSMo.
Presumption In Appeals
Notwithstanding the provision of Section 138.431.3, RSMo – “There shall be no presumption that the assessor’s valuation is correct,” – the Supreme Court of Missouri has held, “A tax assessor’s valuation is presumed correct.”Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341 (Mo. 2005).Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Assessor, presents substantial and persuasive evidence to establish that the assessor’s valuation is erroneous and what the fair market value should have been placed on the property.Snider, Hermel & Cupples Hesse, supra.
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 is 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.
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).
Complainant’s 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).
Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment.The appraiser developed two approaches – sales comparable and income approach.Complainant’s appraiser found sales of three similar homes which sold for $84,700; $91,500; and $96,000 in January to September 2006.Complainant’s appraiser adjusted for the condition of the roof of the subject property ($6000), additional bathroom in the subject property ($700), and, on one property, a fireplace ($1000).After adjustments, these properties indicated a range of value for the subject property between $80,400 and $90,700.Comparable sale number 2 occurred in September, 2006, less than four months prior to the effective date of January 1, 2007.Comparable 2 had an adjustment of $700 for one less bath and $6,000 adjustment due to the condition of the roof on the subject property.No adjustment was necessary for square footage since comparable 2 was within 40 square feet of the subject property and was similar in all other aspects.Comparable 2 sold for $96,000 and the adjusted sales price is $90,700.Based upon sale of Comparable 2 and the other comparables, Complainant’s appraiser determined a market value for the subject property of $85,000 on January 1, 2007.Since the house is being rented, the Complainant’s appraiser developed an income approach with a resulting value of $83,400.
Although the Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment, it was not substantial and persuasive to establish the value proposed of $85,000.However, the evidence on the record as addressed below did establish true value in money for the property under appeal.
Hearing Officer Finds Value
The present case provides a record in which a state certified appraiser and an employee of the county assessors have developed appraisal reports utilizing three recognized approaches to value.Complainant’s evidence standing on its own met the standard of substantial and persuasive to rebut the presumption of correct assessment as determined by the Assessor and sustained by the Board.The Hearing Officer closely reviewed both appraisal reports to determine true value for the subject property.Each appraiser developed a sales comparable approach using properties very similar to the subject property that sold in 2005 – 2006. The properties sold from $84,700 to $109,900.The properties were adjusted for bath count, whether the property was owner occupied or rented, square footage, and condition. Neither appraiser made any adjustment for the date of sale.The adjusted sale prices ranged from $80,400 to $101,540.
The Hearing Officer weighted Comparable Sale 2 in the Complainant’s appraiser’s report most heavily.Comparable Sale 2 occurred in September, 2006, less than four months prior to the effective date of January 1, 2007.Comparable 2 had an adjustment of +$700 for bathroom count and -$6,000 adjustment due to the condition of the roof on the subject property.No adjustment was necessary for square footage since comparable 2 was within 40 square feet of the subject property and was similar in all other aspects.Comparable 2 sold for $96,000 and the adjusted sales price is $90,700.The remaining comparable sales adjusted sales prices range from $80,400 to $101,540 and support a finding of true value of $90,700.
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lang=EN-CA style=’mso-ansi-language:EN-CA’>ORDER
The assessed valuation for the subject property as determined by the Assessor for Greene County and sustained by the Board of Equalization for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax year 2007-2008 is set at $17,233.
A party may file with the Commission an application for review of a hearing officer decision within thirty (30) days of the mailing of such decision.The application shall contain specific detailed 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.
If an application for review of a hearing officer 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.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 Greene 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.If any protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
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 March 20, 2008.
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 this 20th day of March, 2008, to:Jack Hoke, 1545-A E. Primrose, Springfield, MO 65804, Complainant; Theodore Johnson, Greene County Counselor, 901 St. Louis Street, 20th Floor, Springfield, MO 65806, Attorney for Respondent; Rick Kessinger, Assessor; Richard Struckhoff, Clerk; Scott Payne, Collector, Greene County Courthouse, 940 Boonville, Springfield, MO 65806.
_______________________________
Barbara Heller
Legal Coordinator