State Tax Commission of Missouri
v.) Appeal No.08-10370
PHILIP MUEHLHEAUSLER, ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax year 2008 is set at $324,300, residential assessed value of $61,620.Complainant appeared pro se. Respondent appeared by Associate County Counselor, Paula J. Lemerman.Case heard and decided by Senior Hearing Officer W. B. Tichenor.
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.
Complainant appeals, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $324,300, assessed value of $61,620, as residential property.The Board reduced the value to $308,000, assessed value of $58,520.Complainant proposed a value of $275,000, assessed value of $52,250.A hearing was conducted on April 21, 2008, 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 on his own behalf.He offered his opinion of the fair market value of the property as of January 1, 2007 to be $275,000.This was based on his knowledge of values in the area and the prior valuations by the Assessor.Mr. Bajwa offered into evidence Exhibit A – four photographs of the interior of the subject property showing water damage in the basement area and to the ceiling in a room addition due to a problem of roof leakage.Exhibit A was received into evidence.Exhibit B – solicitation by iFreedom Direct to refinance Complainant’s home loan – was offered into evidence.Counsel for Respondent objected on the ground of hearsay, and lack of foundation for the value cited in the document.Objection was sustained.Exhibit B is maintained in the Commission file, but is not part of the evidentiary record.
Respondent placed into evidence the testimony of Ms. Sarah Curran, Missouri State certified Residential Real Estate Appraiser for St. LouisCounty.The appraiser testified as to her appraisal of the subject property.The Appraisal Report, Exhibit 1, of Ms. Curran was received into evidence.Ms. Curran arrived at an opinion of value for the subject property of $347,000 based upon a sales comparison approach to value.In performing her sales comparison analysis, the appraiser relied upon the sales of five properties deemed comparable to the subject property.After hearing Complainant’s testimony related to a roofing problem that had caused water damage to the ceiling of one room.Ms. Curran revised her opinion of value, to account for this factor, to $337,000.
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 15280 Clayton Road, Ballwin, Missouri.The property is identified by parcel number 21S120233.The property consists of 18,000 square foot lot improved by a one-story brick and frame, ranch, single-family structure of average quality construction.The house was built in 1960 and appears to be in good condition.There were room additions, updating and other improvements made in 2006 to 2007. The residence has a total of ten rooms, which includes four bedrooms, three full and one half baths, and contains 3,214 square feet of living area.There is a partial basement with some finish and a full bath and an attached two-car garage.
3.Under a building permit issued 1/20/05 there was new construction and improvements made to the subject home which were not picked up on the 2007 valuation by the Assessor.Therefore, the property is to be valued as it existed on January 1, 2008, as if the new construction and improvements had been completed on January 1, 2007.
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, 2007, to be $275,000, as proposed.
5.The properties relied upon by Respondent’s appraiser in performing her appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property. The properties were located within approximately nine tenths of a mile to less than a mile and two tenths of the subject.Sale properties 3 and 4 sold at a time relevant to the tax date of January 1, 2007.Sales 1, 2 and 5 sold after the valuation date of January 1, 2007. The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.
6.Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2007, to be $328,000.However, Respondent’s appraisal was accepted only to establish the value of $324,300 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.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.
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.
The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, 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.Complainant failed to present evidence to rebut the presumption of correct assessment by the Board.Respondent’s evidence rebutted the presumption of correct assessment and was sufficient for the Hearing Officer to find value.
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.True value in money is defined in terms of value in exchange and not value in use.It is the fair market value of the subject property on the valuation date.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.
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.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. The appraisal of Ms. Curran presented an opinion of value derived from conducting the sales comparison approach.This constituted substantial and persuasive evidence of value.Mr. Bajwa presented no evidence of fair market value of the property under appeal developed from any recognized appraisal methodology.
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.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.”
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.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.
The owner of property is generally held competent to testify to its reasonable market value.The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.“Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.”
The taxpayer’s opinion of value rests on his general knowledge of home values and the valuations placed on the property by the Assessor in past assessment cycles.Neither source of information provides the necessary statement of facts to establish the reliability of the owner’s opinion.As to an owner’s general knowledge of home values, this does not meet the standard for substantial and persuasive evidence.When the owner is not qualified as an expert in appraisal of property, any testimony relative to reported sales of other properties to establish value is based on hearsay and is accordingly in admissible.No weight can be given to the opinion of the owner based on his understanding of what other homes have been selling for.This is simply not an accepted methodology for appraising property in an ad valorem appeal before the Commission.
The prior assessments on a given property are likewise irrelevant to establishing value for the current assessment cycle.Furthermore, by statute there is no presumption that an assessor’s value is correct.Therefore, the owner’s reliance on the appraised values set by the Assessor for the 2003, 2005 or 2007 for his property is of no probative benefit.
There is no market data to establish the fair market value of the property as it existed on January 1, 2008, but valued as if all improvements and new construction had been in place on January 1, 2007, was only $275,000, as asserted by the Complainant.
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.Therefore, the opinion of value proffered by Ms. Curran of $337,000, after making an allowance for water damage due to a roofing problem, can only be received into evidence to establish a value of $324,300, as that is the higher of the values between the Assessor’s appraised value and the value set by the Board.
Respondent’s Evidence Establishes Value
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.
Ms. Curran in her appraisal relied on the sales of three properties that sold after the valuation date of January 1, 2007.The Commission has recently addressed the issue of utilization of sales data after the tax date in four appeals from St. Louis City.In the May cases, the Commission found that the Hearing Officer committed reversible error in receiving closing statements into evidence showing sales occurring after the valuation date due to the fact that sales occurring after the valuation date are irrelevant for purposes of a determination of fair market value.Accordingly, the Hearing Officer cannot consider a value based on Comparables 1, 2 and 5.This does not mean Exhibit 1 does not have probative evidence.The adjusted values of Comparables 3 and 4, after a deduction of $10,000 to account for the leaking roof damage, yields an indicated value of $328,050, by placing equal weight on both sales.The Hearing Officer is persuaded a value based on these two comparables provides substantial and persuasive evidence to establish the value of $328,050.However, the evidence of value from Comparables 3 and 4 cannot be used to increase the value above $324,300.Therefore, true value in money is set at $324,300.
The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax year 2008 is set at $61,620.
A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision.The application shall contain specific facts or law as 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.
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 139.031.8, 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 April 29, 2009.
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 29thday of April, 2009, to:Mohsin Bajwa, 15280 Clayton Road, Ballwin, MO 63011, Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent, County Government Center, 41 South Central Avenue, Clayton, MO 63105; Philip Muehlheausler, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
 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).
 Daly v. P. D. George Company, et al, 77 SW3d 645, 649 (Mo.App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 SW2d 376, 380 (Mo.App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).
 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.
 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).
 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).
 Cohen v. Bushmeyer, 251 S.W.3d 345, (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).