State Tax Commission of Missouri
PAUL AND BEVERLY REICHERT,)
v.)Appeal Number 07-33036
RICK KESSINGER, ASSESSOR,)
DECISION AND ORDER
Decision of the Greene County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Hearing Officer finds presumptions of correct assessment not rebutted.
The issue in this appeal is the true market value of residential property on January 1, 2007.
The subject property is a residence on 22,250 square foot lot which was valued by the Assessor at $392,100 residential (assessed value $74,500).Upon appeal, the Board of Equalization sustained the valuation by the Assessor.Complainant appealed proposing a value of $353,900 residential (assessed value $67,241).
The evidentiary hearing was held on March 18, 2008, in the Historic Greene County Courthouse,Springfield,Missouri. Paul Reichert appeared in person.Assessor Rick Kessinger appeared in person and by counsel Nichole Lindsey. Evidence was heard and the case was taken under advisement. Complainant was allowed to file additional exhibits until 5:00 p.m. on
March 18, 2008.
Complainant offered the following exhibits:
Exhibit A:List of Repairs for Home
Exhibit B:MLS listing
Exhibit C:Proposal for Roof, Gutter and water damage repair
Respondent offered the following exhibits:
Exhibit 1:Narrative Appraisal for Subject Property.
Exhibit 2:Property Record Card for Subject Property.
Exhibit 3:Arial map of subject property.
Respondent moved the exhibits be admitted. Complainant objected to Exhibit 1 stating that the Respondent failed to provide him with a copy of the appraisal prior to the hearing.Complainant, a licensed attorney, did not file any discovery motions or requests.Objection was overruled and Complainant was provided with time to review the appraisal.All exhibits were admitted into evidence.
FINDINGS OF FACT
1.Jurisdiction is proper.Complainants timely filed their appeal from the decision of the Greene County Board of Equalization.
2.The subject property is 22,250 square foot lot improved with a two-story, three bedroom, three full bath, two half bath residence containing 4,114 square feet of gross living area, with a 1449 square foot unfinished basement.The home is 81 years old and appears to be in average to good condition. A 906 square foot one story and a 234 two-story addition were constructed in 1987.The home has a 988 square foot three-car attached garage, an enclosed porch, and a small patio added in 1990.The home has two fireplaces and an in-ground pool.The property is identified as parcel number 12 30 107 007, more commonly known as 1146 S Pickwick,Springfield,Missouri.
3.Complainant asserted that the correct value of his home is $353,900.He stated that $353,900 was the value placed on the home during the 2005-2006 assessment cycle.It was his opinion that his property has not increased in value since January 1, 2005.
4.Complainant presented a list of repairs needed for the home.He stated that he needed to repair his roof and guttering.Complainant estimated the repairs at $15,000.Complainant submitted Exhibit C after the hearing which is a proposal for repairs to the roof and guttering totaling $9,775. Complainant also testified that he needed to insulate his attic and walls and estimated the cost at $12,000.He stated that he needed plumbing work repairs which he estimated at $15,000 and presented a bid for $13,278.Complainant estimated electric wiring update at $15,000, new windows at $8,500 and refinishing of the hardwood floors at $6,500.
5.Complainant presented no market data in support of his opinion of value.
6.Complainant presented no evidence as to the market conditions from January 1, 2005, to January 1, 2007.
7.Complainant presented no evidence as to the effect of the repairs or failure to cure on the market value of the property.
8.Suzan Tanzer, a certified residential appraiser with eleven years of experience, testified on behalf of Respondent.
9.The appraiser developed two approaches to value: the cost approach and the market approach.
10.Under the cost approach, the Respondent determined a depreciated value for the improvement of $464,289, “as is” value of site improvements of $50,000 and a site value of $125,000 for a total value of $639,289.Appraiser stated that this value is being used to support the Board of Equalization’s value of $392,100.
11.Respondent’s appraiser found sales of five homes which sold between $425,000 to $799,900 from May 2004 to a current listing.Respondent’s appraiser adjusted for date of sale, site size, quality of construction, age/updating, square footage, garages, and patio/porches.After adjustments, these properties indicated a range of value for the subject property between $526,450 and $719,150.Based upon these sales, Respondent’s appraiser determined a market value for the subject property of $595,000 on January 1, 2007.Appraiser stated that this value is being used to support the Board of Equalization’s value of $392,100.
12.Comparables 1 and 5 were considered most similar in quality to the subject property.Comparable 5 sold in May, 2007 for $425,000.The home is undergoing extensive renovations and is currently listed for $750,000.Comparable 3 was given the most weight due to its similar size and finished living area.
13.Comparable 1 is a 93 year old home located 1.5 blocks from the subject property and sold in October 2005 for $719,150.The adjustments included a -$50,000 adjustment for a 2003 remodel, a -$1500 for an additional fireplace, and a -$37,250 for finished attic space. A total of 12% gross adjustments were made for an adjusted value of $719,150.
14.Comparable 3 is an 80 year old home located 1 block from the subject property and sold in November, 2004 for $460,000.The adjustments included an approximate $21,000 downward adjustment for a larger site and additional finished space and approximately $140,000 in upward adjustments for its inferior condition, lack of recent renovations, fewer amenities and time of sale.Gross adjustments totaled 35% for an adjusted value of $578,500.Complainant testified and questioned the appraiser on the renovations to the home since its sale in 2004.The residence is undergoing $1,000,000 of renovations.
15.Comparable 5 is a 77 year old home located 2.5 blocks from the subject property and sold in May 2007 for $425,000.Extensive remodeling is underway including a 2559 square foot addition.It is currently for sale and listed for $750,000.The comparable property was adjusted downward for its larger site size, the remodeling and addition, and finished attic space.The comparable was adjusted upward for its smaller square footage and garage.The gross adjustments totaled 15% for an adjusted value of $717,600.
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lang=EN-CA style=’mso-ansi-language:EN-CA’>CONCLUSIONS OF LAW
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo.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.Section 138.431.4, RSMo.
Taxpayer has Burden of Proof
In Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003), the court of appeals stated:
There is no longer an automatic presumption regarding the correctness of an assessor’s valuation. Section 138.431.3. This statutory change from the previous situation in which the assessor’s valuation was presumed to be correct does not mean that there is now a presumption in favor of taxpayer. The taxpayer in a Commission tax appeal still bears the burden of proof. Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991).
In Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003), the court of appeals described the taxpayer’s burden as follows:
Taxpayers were the moving parties seeking affirmative relief, and as such, they bore the burden of proving the vital elements of their case, i.e., the assessments were “unlawful, unfair, improper, arbitrary or capricious.” Cupples-Hesse Corp. v. State Tax Comm’n, 329 S.W.2d 696, 702 (Mo.1959); Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. 2003); 84 C.J.S. Taxation §§710, 726. This is true regardless of the existence or non-existence of the challenged presumption. As the Supreme Court of Missouri explained, “even were we to hold that it [the presumption] has been overcome, the burden of proof on the facts and inferences would still remain on petitioner, for it is the moving party seeking affirmative relief.”Cupples, 329 S.W.2d at 702. See also 84 C.J.S. Taxation §710, which states: “Even where there is no presumption in favor of the assessor’s ruling, if no evidence is offered in support of the complaint, the reviewing board is justified in fixing the valuation complained of in the amount assessed by the assessor.”
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.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897.Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).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.Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).See also, 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).
True Value in Money
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 purchased by one who is desiring to purchase but who is not compelled to do so.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).It is the fair market value of the subject property on the valuation date.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).
To prevail, Taxpayers had to “present an opinion of market value and then … present substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on tax day.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. 2002).
The owner of property is generally held competent to testify to its reasonable market value. Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970).The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).
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.Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data is available to make a comparative analysis.Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d. 341, 347-348 (Mo. 2005). (citations omitted).
The Complainant failed to present any evidence as to the price the property would bring when offered for sale by one willing or desirous to sell and purchased by one who is desiring to purchase but who is not compelled to do so.Complainant failed to present substantial and persuasive evidence tending to demonstrate that the subject property would sell for no more than $353,900 on January 1, 2007.Complainant testified that $353,900 was the value placed on the property by the Assessor during the 2005-2006 assessment cycle and it was his opinion that the value of the property had not increased on January 1, 2007.Complainant offered no evidence demonstrating the value of the property in 2005 was $353,900 or that the market values of residential properties from decreased or remained the same from January 1, 2005 to January 1, 2007.An owner’s opinion, unsupported by market data is not based upon proper elements or a proper foundation.Therefore, no probative weight could be given to the opinion of value presented by Complainant.Accordingly, the valuation set by the Board of Equalization must be affirmed.
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.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). The presumption is accepted as true only until and so long as there is no substantial evidence to the contrary.Although there was no substantial and persuasive evidence to the contrary and therefore no need to review the evidence presented by the Assessor to support the Board’s valuation, review of the evidence affirms the decision by the Board.
The appraiser provided sales of homes within eight blocks of the subject property, most within two blocks, and the homes were of comparable age.Out of the homes that were smaller and inferior to the subject property, the lowest sale price was $425,000; $71,100 more than the value proposed by the Complainant and $32,900 more than the value of the Board.
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The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forGreeneCountyfor the subject tax day is AFFIRMED. The assessed value for the subject property for tax year 2007-2008 is set at $74,500.
A party may file with the Commission an application for review of a hearing officer decision within thirty (30) days of the mailing of such decision.The application shall contain specific detailed grounds upon which it is claimed the decision is erroneous.Failure to state specific facts or law upon which the appeal is based will result in summary denial.
If an application for review of a hearing officer decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission.If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of Greene 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.If any protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
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 March 27, 2008.
STATE TAX COMMISSION OFMISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid this 27th day of March, 2008, to:Paul Reichert, P.O. Box 50482, Springfield, MO 65805, Complainant; Theodore Johnson, Greene County Counselor, 901 St. Louis Street, 20th Floor, Springfield, MO 65806, Attorney for Respondent; Rick Kessinger, Assessor; Richard Struckhoff, Clerk; Scott Payne, Collector, Greene County Courthouse, 940 Boonville, Springfield, MO 65806.