State Tax Commission of Missouri
NAOMI JEAN STOHR,)
)
Complainant,)
)
v.) Appeal No.08-89501
)
JAMES STRAHAN, ASSESSOR,)
TANEY COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the Taney County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Complainant did not rebut the presumption of correct assessment by the Board. True value in money for the subject property for tax year 2008 is set at $264,895, residential assessed value of $50,330.Complainant appeared pro se.Respondent appeared in person and by Robert Paulson, County Counselor.Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.
SUMMARY
Complainant appealed, on the ground of overvaluation, the decision of the Taney County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $264,895, assessed value of $50,330, as residential property.Complainant proposed a value of $200,000, assessed value of $38,000 in her Complaint for Review of Assessment.A hearing was conducted on November 5, 2008, at the Taney County Courthouse Annex, Forsyth, Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant’s Evidence
Complainant testified in her own behalf.She gave her opinion of the fair market value of the property to be $205,000.The opinion was based upon the appraisal report (Exhibit A) of Timothy J. Russell, Missouri State Certified Residential Real Estate Appraiser.Exhibit A was received into evidence.Mr. Russell’s appraisal was as of June 23, 2008.He had no opinion of value as of January 1, 2007.
The following exhibits were also received into evidence.
|
Exhibit |
Description |
|
B |
Warranty Deed |
|
C |
Contract for Sale |
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D |
Agency Contract |
|
E |
Estimate for Repairs |
|
F |
Structural Survey |
|
G |
Repair Estimate |
Respondent’s Evidence
Respondent testified as to his valuation of the property.The property record card on the subject was received into evidence as Exhibit 1.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Taney County Board of Equalization.
2.The subject property is located at 140 William Place, Branson, Missouri.The property is identified by parcel number 8-8-27-2.12.The property consists of 2.1 acre lot improved by a contemporary vinyl and brick single family home on a slab.The house was constructed in 2006.The house has 2,818 square feet of living area containing nine rooms, four bedrooms and two and a half baths.It has a three car garage.The property was purchased in August 2006 for $305,000.
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
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 $205,000.
5.The subject home suffers from severe structural defects that would have a negative impact on its fair market value for the 2009 assessment cycle.[1]The defects consist of cracking in the slab, resulting in a variety of structural problems for the house.However, the evidence failed to establish that the defects would have been known, or could have reasonably been discovered by a potential buyer on January 1, 2007.
CONCLUSIONS OF LAW AND DECISION
Jurisdiction
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.[2]
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[3]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.[4]The evidence presented by Complainant was substantial and persuasive of an indicated value at a time relevant to the January 1, 2009, valuation of the property.However, it is not relevant to the valuation for January 1, 2007.
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.[5]It is the fair market value of the subject property on the valuation date.[6]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.[7]
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.[8]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.”[9]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[10]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.[11]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[12]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[13]The owner’s opinion of value in this case rests upon an appraisal report.Generally, a properly developed appraisal report provides a proper foundation for an owner’s opinion of value.
The Russell appraisal report provides substantial and persuasive evidence of what the fair market value of the property was on June 23, 2008.However, it provides no evidence of value as of January 1, 2007, which is the valuation date for this appeal.Mr. Russell’s appraisal properly took into account the structural deficiencies with Ms. Stohr’s home.These deficiencies are significant factors that must be accounted for in the valuation for the property under the 2009 – 2010 assessment cycle.
However, the responsibility of the Hearing Officer in the present appeal is to establish the true value in money for the property as of January 1, 2007.Missouri has a two year assessment cycle.All property is to be assessed according to its true value in money (fair market value) as of January 1, of every odd numbered year.[14]The evidence provides a sound basis that as of January 1, 2007 a willing buyer and seller would have most likely agreed to a purchase price on the Complainant’s property of at least $264,895, if not more, given it had been purchased for $305,000 just four months prior to the 2007 assessment date.
The critical factor upon which Ms. Stohr is basing her appeal is that her newly constructed home developed severe cracking and settling problems in mid-2007.She properly reasons that the defects in construction which resulted in the cracking and settling of the slab upon which her house is built existed at the time of her purchase.Therefore, the defects existed on January 1, 2007.The problem is that there is no evidence to establish that an informed buyer, even with a proper structural inspection in late December of 2006 would have discovered that the slab was then cracking or that it was defective.
In the absence of such evidence, it would be mere conjecture for the Hearing Officer to conclude that the negotiated sale price in a January 1, 2007, hypothetical sale would in any manner account for the structural defects in the subject house.The Hearing Officer is not unsympathetic to the plight Ms. Stohr finds herself in.The Hearing Officer certainly understands that necessary repairs to the house will likely result in a total expenditure of purchase price and repairs that will exceed the market value of the property after repairs are completed.A very distressing example of how that cost will not equal value once repairs are made.However, fair market value must be based on evidence, not on sympathy.There is no basis upon which the Hearing Officer can find a value of $205,000 as of January 1, 2007, for the Stohr property.
The assertion by the Respondent at hearing that any adjustment for the structural defects would only be tied to the cost attributable to the slab in the home’s original construction is in error.The cost of pouring the slab does not capture all of the resultant damages to Ms. Stohr’s home as a result of the cracking and settling of the slab.As was established by Complainant’s evidence significant outlays for repairs will have to be made in order to bring the house up to the standard at the time of its purchase, before the defective slab began wreaking havoc on the structure.The physical depreciation applicable to the house is significantly more than a simple age life calculation, with the added initial cost for pouring the slab.Mr. Russell’s appraisal provides a sound basis that a depreciation factor of 30% or more would not be unreasonable.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Taney County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax year 2008 is set at $50,330.
Complainant may file with the Commission an application for review of this decision within thirty days of the mailing of such decision.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Said application must be mailed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
Failure to state specific facts or law upon which the appeal is based will result in summary denial. [15]
The Collector of Taney County, as well as the collectors of all affected political subdivisions therein, shall hold the disputed taxes pending a filing of an Application for Review.
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 November 26, 2008.
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 26thday of November, 2008, to:Naomi Jean Stohr, 140 William Place, Branson, MO 65616, Complainant; Robert Paulson, County Counselor, P.O. Box 1086, Forsyth, MO 65653, Attorney for Respondent; James Strahan, Assessor, P.O. Box 612, Forsyth, MO 65653; Donna Neeley, Clerk, P.O. Box 156, Forsyth, MO 65653; Sheila Wyatt, Collector, P.O. Box 278, Forsyth, MO 65653.
___________________________
Barbara Heller
Legal Coordinator
[3] 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).
[4] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[5] 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).
[7] 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.
[9] 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).
[12] 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).
[13] 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).