John & Cindy Neville v. Raines (Morgan)

 

JOHN & CINDY NEVILLE,)

)

Complainants,)

)

v.) Appeal No.08-73001

)

ROBERT RAINES, ASSESSOR,)

MORGAN COUNTY, MISSOURI,)

)

Respondent.)

 

 

DECISION AND ORDER

 

HOLDING

 

Decision of the Morgan County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.Hearing Officer finds Complainants rebutted the presumption of correct assessment by the Board.True value in money for the subject property for tax year 2008 is set at $192,600, residential assessed value of $36,590.

Evidentiary hearing was held on October 29, 2008, at the Morgan County Courthouse, Versailles, Missouri.

Complainants appeared pro se.

Respondent appeared pro se.

Case heard and decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2008, under the economic conditions as of January 1, 2007.

 

SUMMARY

Complainants appeal, on the ground of overvaluation, the decision of the Morgan County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $197,500, assessed value of $37,530, as residential property.Complainant proposed a value of $176,600, assessed value of $33,550.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainants’ Evidence

Complainant John Neville testified on behalf of Complainants.Mr. Neville gave his opinion of the fair market value for the property under appeal to be $176,600.This was based upon the purchase price of the property under contract dated April 27, 2007, closing 9/10/07.Exhibit A was received into evidence on behalf of Complainants.

Exhibit A consisted of the following documents:

1.      Copy of Notice of Change of Assessed Value.

2.      Copy of first page of Contract for Sale of Real Estate.

3.      Copy of listing prices for Millstone Luxury Condominiums Building 200, 300 & 400.

4.      Copy of Boat Slip Lease.

5.      Copy of email from Commission Hearing Officer Maureen Monaghan to John Neville.

6.      Listing of options and information on homeowners assessment for Millstone Condominiums.

7.      Seven condominium sales data sheets.

8.      Listing of Millstone units, owners, 2008 Market and Assessed Values.

9.      List of Millstone units in building 400 with two parcel numbers.

10.  Assessor’s data sheet listing the Millstone properties, with Assessed values.

11.  Thirty-two photographs of the Millstone development.

12.  Complainants’ typed notes on appeal process with the Assessor and the Board of Equalization.

Respondent’s Evidence

Respondent testified in support of his original valuation which had been sustained by the Board.Exhibit 1 was received into evidence on behalf of Respondent.Exhibit 1 contained the following documents.

A.     Narrative on appeal, with sales grid.

B.     Information from Sales Questionnaires on prices for Docks, Garages, Per Square Sales Prices

C.     List of options available from Millstone Condominiums.

D.     Six photographs of Millstone Development.

E.      Sales Letter from Complainants on the purchase of the subject unit.

F.      Fourteen Sales Letters on sales at Millstone Development.

FINDINGS OF FACT

1.Jurisdiction over this appeal is proper.Complainants timely appealed to the State Tax Commission from the decision of the Morgan County Board of Equalization.

2.The subject property is located at 18130 Millstone Cove Road, Gravois Mills, Missouri.The property is identified by parcel number 21-4-18-3-4-12-57.The property is otherwise known as Unit 401 of the Millstone Condominiums.It is a 1,567 square foot, three bedroom, two bath, Garden or First Floor Unit.Associated with Unit 401 is Boat Slip Number 16, of Dock Number IV.[1]

3.It is the practice of the Assessor to assess all boat docks as part of the real property with which they are associated or identified.[2]Boat Slip Number 16 of Dock Number IV, associated with Unit No. 401 Millstone Condominium is assessed as part of the subject property.

4.The property is to be valued for tax year 2008, under the economic conditions as of January 1, 2007, as if Unit 401 completed in 2007 had been in place on January 1, 2007.[3]

5.Complainant’s evidence was 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 $192,600.

6.Listing Prices for 1567 and 1475 square foot Units in Building 400 of Millstone Condominiums fall in the following ranges:[4]

 

7.The floor premium is $2,000 per floor for floors 2 through 4 and $6,000 for Penthouse units

8.Sales data on sales in Millstone Condominiums from July 2005 – December 2007[5] establishes the adjusted per square foot sale prices in a range from $100.83 to $128.75, with an average of $121.09 and a median of $121.19.[6] The average and median for sales occurring from 7/05 to 11/06 were $122.28 and $121.19 respectively.The average and median for sales occurring from 1/07 to 12/07 were $119.91 and $121.19 respectively.See, Explanation of Finding of Fact 8, infra.

9.The purchase of the subject condominium, with boat slip under contract dated April 27, 2007, was a market transaction between a willing buyer and willing seller.

10.The true value in money of Boat Slip 16 of Dock Number IV as of January 1, 2008 is $16,000.00

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.[7]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[8]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.[9]A price agreed to between a willing buyer and seller creates a presumption that the transaction was a market transaction.[10]Complainants purchase of the subject property under contract dated April 27, 2007 (closed on September 10, 2007) established the fair market value of the subject condominium to be $176,600, plus the value of boat slip number 16 of Dock Number IV at $16,000.

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.[11]It is the fair market value of the subject property on the valuation date.[12]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.[13]

 

 

Explanation of Finding of Fact 8

The conclusions reached in Finding of Fact 8 are based on a review and analysis of the sales data submitted by both Mr. Neville and Mr. Raines.Footnote 6 contains a chart detailing the sales data and adjustments for floor and area differences.The asking price was used, unless the sales price was lower than the asking.If the sale price was higher than the asking price, it would reflect the adding of options, none of which were apparently added to the sale of the subject.Since the information was not available as to unit options, the utilization of the asking price or the sales price, if lower, eliminates the need to attempt individual adjustments for miscellaneous options.

In like manner, the value for docks, personal water craft slips or garages was not added to any of the sales.The chart provides relevant sales data for the value of the individual condo units without adding the value of any of the boating options.[14]

The data does not establish that the purchase price for the subject reflects any general decline in values when a comparison of the unit values (sale price per square foot of living area) is made. All sales were adjusted to provide the indicated unit value. The purchase by the Nevilles of Unit 401 was clearly at the lower end of the market range.However, there is no basis upon which the sale can be ignored or rejected.See, Sale of Subject, infra.

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, 2007.[15]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.”[16]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[17]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.[18]

The owner of property is generally held competent to testify to its reasonable market value.[19]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[20]In this instance, the opinion of value of Mr. Neville is based upon the actual sale transaction.This is a proper foundation for the owner’s opinion.

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.[21]

The sale price for the subject condominium was set by the contract executed in April of 2007.Notwithstanding that the closing did not take place until September, 2007, the April date is not too remote in time to establish fair market value.It is clear Complainants were able to negotiate a lower price than most other sales in the subject development.However, negotiation of price is part of the activity of the market.The outer limit of value as of January 1, 2007 for Unit 401, as purchased by Mr. and Mrs. Neville was $176,600.

Boat Slip Assessment

The real crux of this valuation is how the value of the boat slip 16 of Dock Number IV is to be treated.The slip is under a ninety-nine year lease.If Complainants sell Unit 401, Slip 16 must be transferred to a Unit owner at Millstone Condominium.If it is not possible to do this, the Owner’s Association must purchase the slip for $16,000 or waive the requirement that the Slip be assigned only to a Millstone Unit Owner. The base rental is $16,000, plus a quarterly maintenance assessment by the owner’s association.[22]

The condominium association is not being taxed for the boat docks that are assigned to or associated with given condominium units.Complainants’ argument is that the dock should be considered as personal property and assessed against the association.There is no assessment of a fee for taxes on boat docks by the association.The monthly assessment to Unit owners covers taxes on the Common Area, but not boat docks.[23]

The uniform practice in Morgan County is that boat docks are assessed as real property along with the real estate to which the dock is attached.This provides for a uniform and equitable assessment.It also reduces the cost to the county of assessing and billing for hundreds of docks on the Lake of the Ozarks.The assessment of docks as personal property would result in an increased tax burden for taxpayers.In the present instance, the $16,000 slip if assessed as personal property would have an assessed value of $5,333, instead of $3,040 as real property.If Unit Owners in Millstone were not assessed for their docks, it is obvious that the homeowners association would have to impose special assessment fees to cover the increased tax burden.The lease of Slip 16 was part and parcel of the sale transaction involving Unit 401.It is appropriate to include the value of the slip as part of the value of Unit 401.

 

Conclusion

The true value in money of Unit 401 with boat slip 16 as of January 1, 2008, under the economic conditions of January 1, 2007, was $192,600.[24]

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Morgan County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax year 2008 is set at $36,590.

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. [25]

The Collector of Morgan 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 21, 2008.

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 21^stday of November, 2008, to:John Neville, 5186 Live Oak Drive, Smithton, IL 62285, Complainant; Marvin Opie, Prosecuting Attorney, Morgan County Justice Center, Versailles, MO 65084, Attorney for Respondent; Robert Raines, Assessor, 100 East Newton, Versailles, MO 65084; Cathy Daniels, Clerk, 100 East Newton, Versailles, MO 65084; Clark Hunter, Collector, P.O. Box 315, Versailles, MO 65084.

 

 

____________________________

Barbara Heller

Legal Coordinator