STATE TAX COMMISSION OF MISSOURI
| MICHAEL MORANZ, | ) | |
| Complainant, | ) | Appeal No. 19-10031 |
| ) | ||
| v. | ) | Parcel No. 24X330216 |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR, | ) | |
| ST. LOUIS COUNTY, MISSOURI | ) | |
| Respondent. | ) | |
| ) |
DECISION AND ORDER
Michael Moranz (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 $292,700, with an assessed value of $55,620. Complainant claims the property is overvalued and proposes a value of $205,000 or $234,700.[1] 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 $265,000. The BOE’s decision is set aside.[2]
The evidentiary hearing was conducted on October 7, 2020, at the Wainwright State Office Building in St. Louis, Missouri. Complainant appeared pro se and attended in person. Respondent appeared by counsel Steven Robson, who attended via WebEx video.
FINDINGS OF FACT
- Subject Property. The subject property is located at 3002 Woodlands Terrace Drive in Glencoe, Missouri. The parcel/locator number is 24X330216.
The subject property consists of a 3.45 acre lot and a 2,120 square foot single family home that has three bedrooms and two full baths. Complainant purchased the subject property on December 1, 2015, for $205,000.
- Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2019, was $292,700. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2019, was $292,700.
- Complainant’s Evidence. Complainant testified that he believes the TVM of the subject property on January 1, 2019, was $205,000, the price he paid for the subject property and the appraised value for 2015 through 2018, or, on the high end, $234,700, based on his proposed comparables listed in Exhibit A. Complainant submitted Exhibit A, five two-page printouts from Saint Louis County’s website, including a two-page listing of “Other Sales In Your Area” for 4717 Fox Mountain Road with highlighting; a two-page “Real Estate Information” printout for 4717 Fox Mountain Road, with highlighting and handwritten notes indicating “good comp,” “110.75 per sq ft” (the January 24, 2018, sale price of $170,000 divided by total living area of 1,535 square feet), and “$234,790 comp” ($110.75 multiplied by the 2,120 gross living area of the subject property); a two-page “Assessor’s Comparable Sales” printout for the subject property with highlighting and handwritten notes, including a notation that 18335 Woodland Meadows Drive “has Charter”; a two-page “Assessor’s Comparable Sales” printout for 18049 Melrose Road, with highlighting and a handwritten note identifying comparable 5, 1243 Wooded Fork Drive, as “Good”; and a two-page “Assessor’s Comparable Sales” for 3430 Wilderness Trail, with highlighting and a handwritten note identifying comparable 4, 1243 Wooded Fork Drive, as “Good.” Complainant also submitted Exhibit B, an email with 11 photographs of the subject property, including photographs of the subject property’s basement with furnace, dining area, bathrooms, and flooring. Respondent’s counsel made no objections to the exhibits, and Exhibits A and B were received into evidence.
Complainant testified, among other things, that the subject property is unique because it sits on three and one-half wooded acres and does not have a yard. Complainant indicated that his home was bought as a project, is outdated, has an unfinished basement, older roof, “old if not original furnace, air conditioner, the original bathrooms, is in need of a septic update,” and needs flooring. He also stated that the subject property has no high-speed internet available and that Exhibit A includes his proposed comparables, including 4717 Fox Mountain Road, which sold for $170,000 on January 24, 2018.
Complainant’s testimony and the photographs in Exhibit B show that the subject property is in need of updating and repairs.
- Respondent’s Evidence. Respondent submitted Exhibit 1, a 10-page restricted appraisal report prepared by Steven J. Zahner, Senior Appraiser, St. Louis County Assessor’s Office, dated September 25, 2020. In Exhibit 1, Mr. Zahner’s opinion of value of the subject property as of January 1, 2019, is $265,000. Complainant made no objections to the exhibit, and Exhibit 1 was received into evidence.
Mr. Zahner testified in support of his opinion of value. In Exhibit 1, Mr. Zahner utilizes the sales comparison approach to estimate the market value of the subject property from the recent sales of five comparable properties within one-half mile of the subject property. The key property data in Exhibit 1 are as follows:
| Subject Property | Comp. 1 | Comp. 2 | Comp. 3 | Comp. 4 | Comp. 5 | |
| Address | 3002 Woodlands Terrace Drive | 3340 Wilderness Trail | 18335 Woodland Meadows Dr. | 3641 Hawks Rest Rd. | 3361 Wilderness Trail | 18131 Melrose Rd. |
| Design | Ranch | Ranch | Ranch | Cape Cod | Ranch | Ranch |
| Condition | Fair | Average | Average | Fair | Above average | Average |
| Site (acres) | 3.45 | 4.08 | 3.41 | 5.01 | 3.13 | 6.2 |
| Gross living area (sq. ft.) | 2,120 | 2,018 | 1,848 | 2,128 | 1,724 | 1,872 |
| Room count/ bedrooms/ baths | 7/3/2 | 7/4/2 | 7/3/2 | 7/4/2.1 | 7/3/2 | 7/3/2 |
| Rooms below grade | 752 sq. ft. RecRoom | Unfinished | Unfinished | Unfinished | 300 sq. ft. Rec. Bath | 600 sq. ft. Rec. Bath |
| Garage | 2 car attached | 2 car attached | 2 car attached | 2 car basement | 2 car basement | 2 car basement |
| Adjusted sale price | $266,600 | $290,400 | $260,400 | $263,800 | $282,900 |
The comparable properties are similar to the subject property with respect to design, except for comparable 3. Comparables 1, 2, 3, 4, and 5 differ from the subject property with respect to condition, gross living area, and rooms below grade; condition, gross living area, rooms below grade, fireplaces, and in-ground pool; site, room count, rooms below grade, garage, and fireplace; condition, gross living area, rooms below grade, and garage; and site, condition, gross living area, rooms below grade, and garage, respectively. The sale prices of the comparable properties were adjusted to account for the differences.
Mr. Zahner testified, among other things, that a 752 square foot portion of the subject property was listed as the finished part of the basement, “drywall on the walls and the ceilings” is considered a finished basement, and that “the significant cost is in the walls and the ceiling.” Additionally, Mr. Zahner indicated that he does not typically include an adjustment for internet issues because “that is a factor that is not able to be determined from our available data,” and that he has “never seen, one way or the other, that being described as a factor in a listing in the MLS [Multiple Listing Service].”
- Value. The TVM of the subject property on January 1, 2019, was $265,000.
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 $205,000 or $234,700 opinion of value. Although Complainant’s testimony and Exhibit A suggest proposed comparables, Complainant’s approach is not a generally accepted approach to value property. Complainant’s approach does not make adjustments for differences between the proposed comparables and the subject property. For example, page 3 of Exhibit A indicates that 4717 Fox Mountain Road has three baths and two bedrooms. However, no adjustments appear to have been made for these differences from the subject property, which has two baths and three bedrooms. Also, Complainant’s evidence does not persuasively establish that the January 24, 2018, $170,000 sale of 4717 Fox Mountain Road used in Complainant’s calculation for price per square was an arms-length transaction, especially in light of the May 28, 2019, sale of that same property for $385,500, as listed on page 4 of Exhibit A.
Further, while Complainant’s testimony and the photographs in Exhibit B show that the subject property is in need of updating and repairs, they do not persuasively support Complainant’s opinion of value. Complainant did not present persuasive evidence as to the specific monetary impact the items depicted in the photographs had on the TVM of the subject property.[3]
Similarly, although Complainant testified that high-speed internet is unavailable for the subject property, Complainant did not persuasively establish that the unavailability of high-speed internet negatively impacted the TVM of the subject property as of January 1, 2019.[4]
No evidence was offered in support of the BOE decision. Instead, Respondent persuasively established that $265,000, which is lower than the BOE’s valuation, was the TVM of the subject property as of January 1, 2019. 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 five comparables were made, including significant condition adjustments. In Exhibit 1, comparables 1, 2, and 5 had $50,000 condition adjustments, and comparable 4 had a $70,000 condition adjustment. Further, Mr. Zahner’s $265,000 opinion of value falls within the range of the adjusted sale price of the comparables, $260,400 to $290,400.
CONCLUSION AND ORDER
The BOE decision is set aside. The TVM of the subject property as of January 1, 2019, is $265,000.
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 July 2, 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 July 2, 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 testified that he paid $205,000 when he purchased the subject property in 2015 and believes that is the TVM for the subject property as of January 1, 2019, but after considering the comparables, he believes the high end for the subject property would be $234,700.
[2] 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.
[3] The characterization of the condition of the subject property as “Fair” in Exhibit 1 appears to indicate that many or all of the condition issues were accounted for in the restricted appraisal.
[4] Contrary to such assertion, Respondent’s appraiser, Mr. Zahner, testified that an adjustment for internet issues is not typically made.