State Tax Commission of Missouri
PAUL & KATHLEEN BONIFANT,)
)
Complainants,)
)
v.)Appeal Number 09-10453
)
MICHAEL BROOKS,)
ACTING ASSESSOR,)
ST. LOUIS COUNTY, MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On July 15, 2010, Hearing Officer Maureen Monaghan entered her Decision and Order (Decision) setting aside the assessment by the St. Louis County Board of Equalization and setting value for tax years 2009 and 2010 at $193,000, residential assessed value of $36,670.
Complainants timely filed their Application for Review.
CONCLUSIONS OF LAW
Standard Upon Review
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled.The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide.[1]
The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as she may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.[2]
The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.[3]
DECISION
The only alleged error of law or fact asserted in the Application for Review is that the sales comparison approach presented by Respondent’s appraiser[4] was “not reliable, because two of the four properties are in a difference school district.”The Commission is not so persuaded.The evidence is that Mr. Wellman “selected the most reasonable comparable sales available, adjusting for the market differences – and, due to the market differences between the comparables and the subject, the appraiser placed reliance on all of the comparables used in this instance.”[5]
It is obvious the appraiser determined that the difference in school districts from the subject’s school district for two of his four comparables neither disqualified those two sales, nor required an adjustment.[6]There is no evidence that supports an adjustment for any difference between the subject’s school district and the school district of the two comparables.There is no evidence to establish that the market would recognize a difference in value based upon the difference in school districts in this particular instance.This factor simply goes to the weight to be given to the final conclusion of value.It is not a basis for exclusion of the appraisal or rejection of the appraiser’s conclusion of value.All sales were located in the same marketing area and provide a reasonable value estimate.[7]The Hearing Officer did not err in finding the Wellman appraisal to provide substantial and persuasive evidence of the true value in money of the property under appeal as of January 1, 2009, irrespective of the difference in school districts between the subject and two of the comparable sales.
A review of the record in the present appeal provides support for the determinations made by the Hearing Officer.There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer.A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal.[8]
ORDER
The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified.Accordingly, the Decision is affirmed.The Decision and Order of the hearing officer, including the findings of fact and conclusions of law therein, is incorporated by reference, as if set out in full, in this final decision of the Commission.
Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the mailing date set forth in the Certificate of Service for this Order.
If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8, RSMo.
If no judicial review is made within thirty days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.
SO ORDERED September 7, 2010.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Jeff W. Schaeperkoetter, Commissioner
DECISION AND ORDER
HOLDING
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 years 2009 and 2010 is set at $193,000, residential assessed value of $36,670.Complainant appeared pro se.Respondent appeared by Associate County Counselor Paula J. Lemerman.
Case heard and decided by Hearing Officer Maureen Monaghan.
ISSUE
Complainants appeal, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which reduced the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
1.Jurisdiction.Jurisdiction over this appeal is proper.Complainants timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.Evidentiary hearing was held on July 1, 2010, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
2.Assessment.The Assessor appraised the property at $201,900, residential assessment of $38,360.The Board of Equalization reduced the value to $190,300, residential assessment of $36,160.
3.Subject Property.The subject property is located at 10180 Bauer Road, St. Louis, Missouri.The property is identified by parcel number 29M310225.The property consists of 1.21 acre lot improved by a one-story brick-sided frame constructed house with full basement, a two-car attached garage.The improvements are considered to be of average quality construction.The house was built in 1948 and appears to be in overall good physical condition for the age of the house.The residence has a total of seven rooms above grade, with three bedrooms, one full bath, and contains 1,590 square feet of living area.The full basement is approximately has approximately 1365 square feet of finished area.[9]
4.Complainant’s Evidence.Complainant Paul Bonifant testified on his own behalf.He stated his opinion was based upon the Assessor’s 2007 mass appraisal valuation and reduction of that valuation based upon the media article regarding price changes in Metro areas (Exhibit C).Complainant introduced the following exhibits:
|
Exhibit |
Description |
|
|
A |
Five MLS Reports |
Irrelevant |
|
B |
Sales from Assessor’s Database |
Admitted |
|
C |
Article on Price Changes in Metro areas |
Excluded – Hearsay |
|
D |
Zephyr CPI & Benchmark |
Excluded – Hearsay |
Exhibit A was MLS documents on five properties.Three properties were sales from August 20, 2009, October 29, 2009, and June 8, 2010, which the Hearing Officer deemed to be irrelevant due to the sales date.Oneproperty was from a foreclosure sale of a property not comparable with the subject.The remaining property sold for $100,000 more than the Assessor appraised the subject property.Its comparability is also questionable due to the larger size of the improvement and the smaller size of the lot.
Exhibit B was a listing of sales from the Assessor’s database.The listing had 79 sales but the Complainant drew the Hearing Officer’s attention to sales 70, 72 and 76.Sale 76 was a foreclosure sale.Sales 70 and 72 were for $118.87 and $120.67 per square foot.The County’s appraiser’s valuation for the subject property was $121.38 per square foot.
None of the exhibits or the testimony of Mr. Bonifant provided a basis to establish the true value in money of the subject property as of January 1, 2009, based on any recognized method for the appraisal of real property for ad valorem tax purposes.Complainants’ 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, 2009, to be $178,000, as proposed.There was no evidence of new construction and improvement during 2009, therefore, the assessed value for 2009 remains the same for 2010.[10]
5.Respondent’s Evidence.Respondent presented the testimony and appraisal report of Viken Wellman, Missouri State Certified Residential Real Estate Appraiser.The properties relied upon by Respondent’s appraiser, in performing his appraisal, were comparable to the subject property for the purpose of making a determination of value of the subject property.The sale properties were located within .54 of a mile to 1.9 of a mile from the subject.The appraiser testified that he needed to exceed the preferred one mile distance since he could not find similar propertieswithin one mile of the disputed property.
Each sale property sold at a time relevant to the tax date of January 1, 2009.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.The appraiser made appropriate adjustments to account for the differences between the subject and each comparable.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, 2009, to be $193,000.
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.[11]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[12]The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof 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.[13]Complainants failed to rebut the presumption of correct assessment by the Board.Respondent presented substantial and persuasive evidence to rebut the presumption and establish the fair market value of the property as of January 1, 2009.
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.[14]It is the fair market value of the subject property on the valuation date.[15]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.[16]
Respondent’s appraiser concluded the fair market value of the subject relying on this Standard.[17]
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.[18]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.[19]Complainants did not present an opinion of value for their property based upon a recognized appraisal methodology.Respondent’s appraiser make a determination of the true value in money for the subject property based upon the comparable sales approach.
Complainants’ Burden of Proof
In order to prevail, Complainants 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, 2009.[20]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.”[21]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[22]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.[23]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[24]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[25]The Complainant’s valuation was based upon taking the 2007 valuation as determined by the Assessor and applying a reduction based upon an article regarding the reduction of home prices in metropolitan areas.
Information obtained from media articles may be interesting and probative as to general trends, but it is not probative as to what a single property would have sold for on the valuation date for an ad valorem tax appeal.The reasoning of the taxpayer is that based on national, state or regional trends that housing values have been in a decline.Therefore, the value of the taxpayer’s property must have declined from the 2007-08 assessment to the 2009 assessment.
The first defect in this reasoning is that it assumes a critical fact that has not been established, i.e. that the property under appeal was valued in the 2007-08 assessment cycle at fair market value as of January 1, 2007.All of the charts, graphs, studies and conclusions regarding the housing market from 2007 up to 2009 do not establish that the value place on the property as of January 1, 2007, by the Assessor was in fact its true value in money.
The second critical aspect of this faulty line of reasoning is to assume another critical, but unproven fact, i.e., that some percentage decline in the overall housing market is applicable to the property under appeal.In other words, what taxpayers seek to establish from general trends of decline in value is that such and such an average is applicable to their given property.The existence of an average percentage decline in home values does nothing to prove that the subject has declined by that percentage.
Respondent Proves 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.[26]Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $193,000 for the subject property.Respondent’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach.The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences.
The adjustments made the Mr. Wellman were consistent with generally accepted guidelines for the appraisal of property of the subject’s type.The adjustments properly accounted for the various differences between the subject and each comparable. The County’s appraiser’s valuation for the subject property resulted in a valuation of $121.38 per square foot. The appraiser’s comparables sales ranged from $88.84 to $165.64 per square foot.Sales 70 and 72 on Complainant’s Exhibit of comparable sales sold for $118.87 and $120.67 per square foot.
The appraisal by Mr. Wellman constituted substantial and persuasive evidence to rebut the presumption of correct assessment and establish the true value in money as of January 1, 2009, for the property under appeal to be $193,000.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization forSt. LouisCountyfor the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2009 and 2010 is set at $36,670.
Application for Review
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 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.
Failure to state specific facts or law upon which the appeal is based will result in summary denial. [27]
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 a 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 July 15, 2010.
STATE TAX COMMISSION OFMISSOURI
Maureen Monaghan
Hearing Officer
[1] St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
[2] St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
[3] Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com’n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).
[8] Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).
[12] 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).
[13] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[14] 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).
[16] 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.
[18] See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).
[19] 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).
[21] 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).
[24] 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).
[25] 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).