State Tax Commission of Missouri
v.)Appeal Number 09-10044
MICHAEL BROOKS, ACTING ASSESSOR,)
ST. LOUIS COUNTY, MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Hearing Officer finds presumptions of correct assessment not rebutted.
Complainant appeared in person.
Respondent appeared by Associate County Counselor, Paula J. Lemerman.
Case heard and decided by Hearing Officer Maureen Monaghan.
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.
Complainant appeals, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $359,400, assessed value of $68,290, as residential property.Complainant proposed a value of $335,000, assessed value of $63,650.A hearing was conducted on June 16, 2010, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant testified in his own behalf.Exhibits A, B and C were received into evidence on behalf of Complainant.Exhibit A consisted of diagram of the Complainant’s property, including easements, and neighboring properties.Exhibit B consisted of a diagram of the subject property and easements.Exhibit C consisted of a photograph of the subject property’s chimney which was constructed on a raised metal plate.
The Complainant believed his property should be set at a lower market value due to (1) a crack in the patio and broken brick steps which the Complainant paid $5000 for repair in 2010; (2) noise due to the property’s location near Henry Avenue and a fire station; (3) the chimney that is raised on a metal plate and (4) the easements on the property.The subject property has a 10 foot easement on the rear of the lot along Henry Avenue.The subject property also has an easement along the side between the subject property (lot 61) and the neighboring property on the south (lot 62), for utilities.The last easement is across the backyard of the property.The easement does not prevent the Complainant from using his property on the surface level but does limit his use underground which prevents such activities as installing an underground pool.
Respondent placed into evidence the testimony of Mr. Arthur Froeckmann, Missouri State Certified Residential Real Estate Appraiser. The appraiser testified as to his appraisal of the subject property.The Appraisal Report (Exhibit 1) of Mr. Froeckmann was received into evidence.Mr. Froeckmann arrived at an opinion of value for the subject property of $374,000 based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of three properties which he deemed to be 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 St. Louis County Board of Equalization.
2.The subject property is located at 826 Burgundy Lane, Manchester, Missouri.The property is identified by parcel number 22Q410940.The property consists of approximately 22,915 square foot lot improved by a two-story brick and vinyl-sided single-family residence with full basement and two-car attached garage. The residence, of approximately 2,800 square feet, has eight rooms including 4 bedrooms, 2 full baths and one half bath.
3.There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010.
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, 2009, to be $335,000.
5.The properties relied upon by Respondent’s appraiser were comparable to the subject property. The three properties were located within .2 miles from the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009 (in a range from October 2007 to September, 2008).The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, and other amenities of comparability.The subject property is on a 22,915 square foot lot which is approximately twice the size of the lots of the comparable property.The appraiser made an adjustment of $6,000 for the difference in the lot size.
6.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 net adjustments as a percentage of sale price ranged from -1.3% to 2.8% and gross adjustments ranged from 7.8 % to 12.1%.The adjusted sales prices for the comparables ranged from $372,500 to $376,600.The appraiser concluded the sales comparable property two was most similar to the subject property.
7.Respondent’s appraisal constituted clear and convincing and cogent evidence to affirm the Assessor’s and Board’s value.It was accepted only to sustain the original assessment made by the Assessor and sustained by the Board and not for the purpose of raising the assessment above that value.
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. 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 board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.Section 138.431.4, RSMo.
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.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).
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.Snider, Hermel & Cupples Hesse, supra.As is discussed below, Complainants failed to meet the required standard to rebut the presumption of correct assessment.
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 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.
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; Exhibit 1.
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, 2009.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. 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.” 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).
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).
The owner of property is generally held competent to testify to its reasonable market value.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).The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.Cohen v. Bushmeyer, — S.W.3d —-, 2008 WL 820938 (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).
In this instance, the Complainant stated an opinion of market value of $335,000.Complainant believed that the “defects” in his property justified the market value of $335,000.The Complainant testified that he had cracks in his patio and brick steps.He paid $4,500 to repair the patio and $500 to replace the bricks in 2010.The structure was built in 1988.The owner of improvements will need to address wear and tear on the property.Even taking into account the cost of repairs ($5,000), a market value of $335,000 has not been established.
Complainant testified that the noise coming from Henry Avenue and the nearby fire department lessened the value of the home.The Complainant had no market data for the effect of noise from Henry Avenue on the market price of the subject property.The neighborhood the subject property is located is bounded by Henry Avenue and Woods Mill (Hwy 141).The comparable properties, all located in the subdivision of the subject property, suffer from the same noise conditions as the subject property.
In addition, Complainant feels that the market value of his property should be $335,000 due to the construction of a chimney on his property.The chimney is built on a metal plate that is raised from the ground.Complainant testified that when the chimney was initially built (at the time of the home’s construction in 1988) it completely separated from the residence and fell onto the neighboring lot.The contractor then reconstructed it using a metal plate and gave the Complainant a ten year warranty. The chimney has not needed repairs for over twenty years and is still fully functional.The Complainant presented no evidence of defective construction or cost to repair.
Lastly, Complainant testified that his property should be decreased in value due to the easements on the property.The Complainant did not show that the easements affect his enjoyment of the land other than prevent him from installing an in-ground pool.The subject property is twice the size of the comparable properties.The excess land is beyond the easement.The county’s appraiser made an adjustment for the excess land.
Complainant’s opinion of value is not based upon property elements or a proper foundation.It has no probative weight in arriving at a determination of fair market value.The burden of proof on Complainant has not been met.The presumption of correct assessment by the Board has not been 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.Section 138.060, RSMo; 12 CSR 30-3.075.Therefore, Exhibit 1 was received only to support the value of $359,400 and not to increase the value to $374,000.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forSt. LouisCountyfor the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2009 and 2010 is set at $68,290.
Complainants 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.Failure to state specific facts or law upon which the appeal is based will result in summary denial.Section 138.432, RSMo 2000. An Application for Review 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 response must be sent to the Attorney for Respondent, Assessor and Collector at the addresses listed below in the certificate of service.
If an application for review of this decision is made to the Commission, the protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission and an order to the Collector to release and disburse the impounded taxes.§139.031.3 RSMo.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 St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes to the appropriate taxing jurisdictions, unless previously done under court order pursuant to section 139.031 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 OFMISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 2nd day of July, 2010, to:Keith Larner, 826 Burgundy Lane, Manchester, MO 63011, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Michael Brooks, Acting Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.