STATE TAX COMMISSION OF MISSOURI
| MARYLAND PROPERTIES, LLC | ) | |
| Complainant, | ) | Appeal No. 19-10584 |
| ) | ||
| ) | Parcel No. 17J611760 | |
| v. | ) | |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR, | ) | |
| ST.LOUIS COUNTY, MISSOURI, | ) | |
| Respondent. | ) |
DECISION AND ORDER
Maryland Properties, LLC (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2019, was $119,000, with an assessed value of $22,620. Complainant claims the property is overvalued and proposes a value of $35,000. Complainant did not produce substantial and persuasive evidence establishing overvaluation. However, Respondent presented substantial and persuasive evidence showing the TVM of the subject property as of January 1, 2019, was $75,000. The BOE’s decision is set aside.[1]
The evidentiary hearing was conducted on December 10, 2020, via WebEx. Complainant was represented by counsel Robert Devereux. Respondent was represented by counsel Monique Nketah.
FINDINGS OF FACT
- Subject Property. The subject property is located at 6937 Raymond Ave. in St. Louis, Missouri. The parcel/locator number is 17J611760.
The subject property consists of a 3,489 square foot lot and a 2,052 square foot single-family home that has five bedrooms and two full baths. (Ex. 1 at 1.) Complainant purchased the subject property for $20,000 in 2010. (Tr. 2:09-39.) The home is a “converted two-family building in which they did not do any conversion other than leaving everything in place” and includes two kitchens. (Tr. 2:09-3:18.)
- Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2019, was $140,200. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2019, was $119,000.
- Complainant’s Evidence. Complainant asserts the TVM of the subject property on January 1, 2019, was $35,000. Mr. Devereux, the managing member of Complainant and a licensed real estate broker, testified in support of Complainant’s opinion of value. Complainant also called Steven Zahner, a senior appraiser for Respondent, to testify. Complainant submitted the following exhibits:
| Exhibit | Description | Ruling |
| A | Thirty-one page list of sales between January 1, 2016, and March 15, 2019, located within 5,000 linear feet of the subject property. | Admitted |
| B | Twelve photographs of the subject property. | Admitted |
| C | Two-page printout of MARIS Matrix information for 6942 Raymond Ave., St. Louis, Missouri, indicating sold price of $34,125 and sold date of December 11, 2018. | Admitted |
| D | Two-page printout of MARIS Matrix information for 6811 Melrose Ave., St. Louis, Missouri, indicating sold price of $34,500 and sold date of July 17, 2020. | Admitted |
| E | Two-page printout of MARIS Matrix information for 7060 Raymond Ave., St. Louis, Missouri, indicating sold price of $7,000 and sold date of December 15, 2017. | Admitted |
Respondent did not object to any of the exhibits, and Exhibits A through E were received into evidence. Complainant asserts that the subject property rents for $550 per month and that the taxes are more than half of the expenses for the subject property. Complainant contends that Exhibits C, D, and E show comparable properties.
- Respondent’s Evidence. Respondent presented the testimony of Mr. Zahner and submitted Exhibit 1, Mr. Zahner’s November 6, 2020, restricted appraisal report for the subject property indicating a $75,000 opinion of value as of January 1, 2019.
In Exhibit 1, Mr. Zahner utilizes the sales comparison approach to estimate the market value of the subject property from recent sales of four comparable properties within one-half mile of the subject property. The key property data in Exhibit 1 is as follows:
| Address | Subject Property 6937 Raymond Ave.
|
Comparable 1
6754 Chamberlain Ave. |
Comparable 2
6716 Crest Ave. |
Comparable 3
1156 Kingsland Ave. |
Comparable 4 1056 Roth Ave. |
| Sale Price | $80,000 | $82,000 | $92,000 | $72,000 | |
| Date of Sale | 11/20/2018 | 7/28/2016 | 8/2/2018 | 2/1/2019 | |
| Location | Residential/Average | Residential/ Average | Residential/ Average | Residential/ Average | Residential/ Average |
| Site (square feet) | 3489 | 5680 | 5841 | 4609 | 8307 |
| Condition | Far | Average | Average | Above Average | Fair |
| Room Count/ Bedroom/ Bath | 8/5/2F | 8/4/1F1H | 10/5/1F1H | 8/4/1 | 8/4/1.1 |
| Gross Living Area (sq. ft.) | 2052 | 1939 | 2268 | 1522 | 1832 |
| Basement and Finished | Full | Full | Full | Full | Full |
| Rooms Below Grade | Unfinished | Unfinished | Unfinished | Unfinished | Unfinished |
| Garage/ Carport | None | 1 Car Det. Garage | None | 2 Car Det. Garage | 2 Car Att. Garage |
| Sale Type | Investor Sale | Arm’s Length Sale | Arm’s Length Sale | Investor Sale | |
| Adjusted Sale Price | $72,800 | $74,700 | $82,600 | $71,400 |
The comparable properties are similar to the subject property with respect to location, basement, rooms below grade, and design. Comparables 1, 2, 3, and 4 differ from the subject property with respect to condition, room count, gross living area, and garage/carport; condition, room count, and gross living area; condition, room count, gross living area, and garage/carport; and gross living area and garage/carport, respectively. Exhibit 1 indicates that these differences have been adjusted for when determining an opinion of value, and that an adjustment was also made to comparable 2 due to date of sale.
- Value. The TVM of the subject property on January 1, 2019, was $75,000.
CONCLUSIONS OF LAW
- Assessment and Valuation. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year. Section 137.115.5(1)(a). “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.” Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted). The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.” Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993). Determining the TVM is a factual issue for the STC. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008). The “proper methods of valuation and assessment of property are delegated to the Commission.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 75 (Mo. banc 1986).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider, 156 S.W.3d at 346. The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach. Id. at 346-48; see also St. Louis Cty. v. Sec. Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.” Snider, 156 S.W.3d at 348. “The comparable sales approach uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.” Id. at 347-48 (internal quotation omitted). “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. at 348.
- Evidence. The hearing officer is the finder of fact and determines the credibility and weight of the evidence. Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015). The finder of fact in an administrative hearing determines the credibility and weight of expert testimony. Hornbeck v. Spectra Painting, Inc., 370 S.W.3d 624, 632 (Mo. banc 2012). “It is within the purview of the hearing officer to determine the method of valuation to be adopted in a given case.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020). The hearing officer “may 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.” Section 138.430.2.
- Complainant’s Burden of Proof. The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued or misclassified. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s valuation is presumptively correct. Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020). The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous” and must prove “the value that should have been placed on the property.” Id. “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.” Savage, 722 S.W.2d at 77 (internal quotation omitted). Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).
- Complainant Did Not Prove Overvaluation. Complainant did not produce substantial and persuasive evidence in support of his $35,000 opinion of value. Although Exhibit A lists sales located within 5,000 linear feet of the subject property that took place between January 1, 2016, and March 15, 2019, the exhibit contains information about a total of 1,031 sales with low sales, such as the sale of 1245 Pennsylvania Avenue for $1,567, (Ex. A at 1), and much higher sales, such as the sale of 1205 Buckner Ave. for $2,059,600, (Ex. A at 2). Exhibit A does not persuasively show that the subject property was overvalued. Exhibit B and related testimony establish the condition of the subject property. However, no evidence persuasively shows that the condition of the subject property is not accurately characterized as fair in Exhibit 1. Additionally, Complainant has not persuasively shown that the sales listed in Exhibits C, D, and E are better comparable sales than those in Exhibit 1. Mr. Zahner persuasively testified that the properties referenced in Exhibit C, D, and E are “quite a bit smaller than the subject property” and “had some other issues.[2]” (Tr. 1:06:02-08:45.)
Although not required, Respondent presented substantial and persuasive evidence establishing that the TVM of the subject property as of January 1, 2019, was $75,000, lower than the BOE’s valuation. Mr. Zahner’s testimony and Exhibit 1 show that the sales comparison approach was developed using comparable sales within one-half mile of the subject property, and that adjustments to the four comparables were made. Mr. Zahner’s opinion of value, $75,000, falls within the range of the adjusted sales prices of comparables 2 and 3, which were arm’s-length transactions, $74,700 to $82,600.
CONCLUSION AND ORDER
The BOE decision is affirmed. The TVM of the subject property as of January 1, 2019, was $75,000.[3]
Application for Review
A party may file with the Commission an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision. The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.” Section 138.432. The application must be in writing, and may be mailed to the State Tax Commission, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov. A copy of the application must be sent to each person listed below in the certificate of service.
Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432.
Disputed Taxes
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.
SO ORDERED November 19, 2021.
Laura A. Storck-Elam
Senior Hearing Officer
State Tax Commission
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on November 19, 2021, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Elaina Mejia
Legal Coordinator
[1] Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal. Mo. Const. art. X, Section 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.
[2] The property in Exhibit C sold for $34,125 and then sold again for $108,160 in July of 2019. (Tr. 1:06:02-08:45.) For the property in Exhibit D, the listing indicates that the “Home cannot be seen on the inside. The tenant will not allow the home to be shown. The buyer will have to deal with tenant either staying or leaving after closing.” (Ex. D at 2.) For the property in Exhibit E, the property was bought from “an organization that purchases vacant and foreclosed homes” and sold again for $182,000 in October of 2020. (Tr. 1:06:02-08:45.)
[3] Missouri operates on a two-year reassessment cycle for valuing real property. See Section 137.115.1. Absent new construction or improvements to a parcel of real property, the assessed value as of January 1 of the odd year remains the assessed value as of January 1 of the following even year. Id.