STATE TAX COMMISSION OF MISSOURI
| NANCY SEROT, | ) | |
| Complainant, | ) | |
| ) | Appeal No. 21-18262 | |
| v. | ) | Parcel No. 21R130983 |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR, | ) | |
| ST. LOUIS COUNTY, MISSOURI, | ) | |
| Respondent. | ) | |
| ) |
DECISION AND ORDER
Nancy Serot (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, 2021, was $455,700. Complainant alleges overvaluation and argued that the TVM as of that date was $400,000.[1] Complainant did not produce substantial and persuasive evidence of overvaluation. The BOE decision is affirmed. The TVM of the subject property on January 1, 2021, was $455,700.
The evidentiary hearing was held on April 14, 2022, via Webex. Complainant appeared pro se via phone. Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri was represented by counsel, Tim Bowe.
FINDINGS OF FACT
1. The Subject Property. The subject residential real property is located at 327 Waverly Pl., Chesterfield, Missouri. The subject property consists of a two-story condo built in 2002 with 3,057 square feet of living space. The condo is attached to two other units. The square footage does not include the condo’s unfinished basement. The condo has seven rooms, including three bedrooms, two full bathrooms, and one half bathroom. Complainant testified that she purchased the subject property in 2007 for $517,000. Complainant noted that the purchase included appliances and other tangible personal property and that those items’ values were not itemized in the sale. Complainant has not listed the property for sale in the last three years.
2. Assessment and Valuation. Respondent classified the subject property as residential and determined the TVM on January 1, 2021, was $455,700. The BOE determined the TVM of the subject property as of January 1, 2021, was $455,700.
3. Complainant’s Evidence. Complainant introduced Exhibits A through D and F through G, which were all admitted into evidence without objection. Exhibit E was not offered by Complainant. Complainant’s exhibits are described as follows:
| Exhibit | Description |
| A | Diagram of condos in subject property’s subdivision taken from Google Maps, including property details of three neighboring condos |
| B | Picture of backyards of condo lots across street from subject property |
| C | Graphs and data from Mid-America Regional Information Systems (MARIS) on sales of properties in St. Louis County, specifically in Chesterfield, Missouri |
| D | Graphs and data from MARIS on sales activity of properties in St. Louis County, specifically in Chesterfield, Missouri |
| E | (Not offered by Complainant) |
| F | Picture of back patio of subject property |
| G | Another photo of back patio and fence of the subject property |
Complainant is a licensed realtor but is not a licensed appraiser. Complainant testified that she has some experience setting sale prices for homes for her customers and is familiar with the real estate market in St. Louis County. Complainant asserted that the she believes the TVM of the subject property as of January 1, 2021, was less than the BOE’s value of $455,700 and somewhere “in the range” between $400,000 and $455,700.
Complainant testified that she believes her property to be overvalued due to a number of reasons. First and foremost, Complainant feels that her condo is less desirable as others in her immediate subdivision because the back of her condo has a view of commercial property, a Bank of America building and its parking lot across the street. Complainant noted that neighboring condos have nice views from their location, including larger lots with backyards.
Complainant also testified that in 2021 the real estate market conditions in her area declined due to the COVID-19 pandemic. Complainant feels that during the pandemic the market was inflated and that the price per square foot of homes sold in her area have significantly declined in 2021 and up until the present time. Complainant argued that this market trend affected her condo’s TVM at the time of assessment, January 1, 2021.
4. Respondent’s Evidence. Respondent introduced Exhibit 1, the BOE’s October 29, 2021, Decision Letter. Complainant did not object. Exhibit 1 was admitted into evidence.
5. Value. The TVM of the subject property as of January 1, 2021, was $455,700.
CONCLUSIONS OF LAW
1. Assessment and Valuation. Pursuant to Article X, Sections 4(a) and 4(b), Mo. Const. of 1945 real property and tangible personal property is assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. 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). The TVM is “the fair market value of the property on the valuation date[.]” 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). “True value in money is defined in terms of value in exchange not value in use.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020) (internal quotation omitted). “Determining the true value in money is an issue of fact for the STC.” Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008).
“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. The STC has wide discretion in selecting the appropriate valuation method but “cannot base its decision on opinion evidence that fails to consider information that should have been considered under a particular valuation approach.” Id., at 348.
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. For this reason, the comparable sales approach is typically used to value residential property. “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.
2. Evidence. “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.” Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977). 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). “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. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Id.
3. 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. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s valuation is presumptively correct. Tibbs, 599 S.W.3d at 7. The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous.” Id. (internal quotation omitted). The taxpayer also 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 v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (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”).
4. Complainant Did Not Produce Substantial and Persuasive Evidence of Overvaluation.
Complainant did not produce substantial and persuasive evidence to support her $400,000 opinion of value.
The comparable sales approach is typically used to value residential properties improved with a single-family home. “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.” Snider, 156 S.W.3d at 347-48 (internal quotation omitted).
Complainant did not offer any comparable sales relevant to the January 1, 2021, valuation date. Complainant’s Exhibit A contains information regarding sales of neighboring condos in her subdivision, but those sales occurred in 2004 and 2008, over ten years before the relevant assessment date. Additionally, there is no evidence showing that these were arms-length sales, nor did Complainant account for any adjustments between these properties and the subject properties. Thus, these sales are not persuasive evidence as to the value of the subject property.
Complainant testified that she believes that her property was overvalued due to the general declining market conditions in the County in 2021, specifically in Chesterfield where the subject property is located. Complainant offered information from MARIS regarding average number of sales and sale prices for homes sold in Chesterfield in 2021 (Complainant’s Exhibits C and D). The graphs in these Exhibits do show a general decline in the number of sales and average sale price toward the end of that year. However, this data does not establish that the subject property was overvalued by the BOE. The data provided in these Exhibits includes sales of all types of real property, not specific data on sales of condos in Complainant’s subdivision. Even so, using general declining market conditions and average sales prices in a particular region is not an acceptable methodology to determine the TVM of a particular property. Additionally, Complainant put forth that she believed that this real estate market decline was most likely due to the COVID-19 pandemic, not specifically that the values of the home values themselves were declining. Therefore, the general market conditions noted by Complainant do not prove overvaluation.
Last, Complainant feels that her property is worth less than others in her subdivision because its back patio is smaller and the condo has a view of commercial property as opposed to the nicer lawns of neighboring condos. However, such evidence neither shows that these characteristics were not considered by the BOE, nor the monetary impact that these characteristics had on the TVM of the subject property as of January 1, 2021. Therefore, Complainant did not produce substantial and persuasive evidence that these other sales prove overvaluation.
While a property owner’s opinion of value is generally admissible, the opinion lacks “probative value where it is shown to have been based upon improper elements or an improper foundation.” Shelby Cty. R-IV Sch. Dist. v. Herman, 392 S.W.2d 609, 613 (Mo. 1965); see also Cohen v. Bushmeyer, 251 S.W.3d 345, 349 (Mo. App. W.D. 2008) (noting a property owner’s opinion of value loses probative value when it rests on an improper foundation).
Complainant did not produce substantial and persuasive evidence showing that the subject property was overvalued. Therefore, Complainant’s evidence does not provide the necessary foundation and elements to support her overvaluation claim. Because the STC “cannot base its decision on opinion evidence that fails to consider information that should have been considered” under a recognized approach to value, Snider, 156 S.W.3d at 348, the BOE decision is affirmed.
CONCLUSION AND ORDER
The BOE decision is affirmed. The TVM of the subject property as of January 1, 2021, was $455,700, with an assessed value of $86,583.
Application for Review
A party may file 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 of Missouri, 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, and 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 the disputed taxes have been disbursed pursuant to a court order under the provisions of section 139.031.
SO ORDERED July 15, 2022.
STATE TAX COMMISSION OF MISSOURI
Benjamin C. Slawson
Senior Hearing Officer
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 15, 2022, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Amy S. Westermann
Chief Counsel
[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, sec. 14; Section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.