State Tax Commission of Missouri
REVETTA TREMAIN & )
SHANNON MAYLEE, )
- ) Appeal Number 09-52005
CHRISTOPHER ESTES, ASSESSOR, )
COLE COUNTY, MISSOURI, )
DECISION AND ORDER
Decision of the Cole County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED. True value in money for the subject property for tax years 2009 and 2010 is set at $89,200, residential assessed value of $16,950. Complainant, Revetta Tremain appeared pro se. Respondent appeared by County Counselor, Jill LaHue.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
Complainants appeal, on the ground of overvaluation, the decision of the Cole County Board of Equalization, which sustained 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.
A hearing was conducted on December 10, 2009, at the Cole County Courthouse Annex, Jefferson City, Missouri. The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainants timely appealed to the State Tax Commission from the decision of the Cole County Board of Equalization.
- Assessment. The Assessor determined an appraised value of $89,200, assessed value of $16,950 as residential property.
- Complainants’ Evidence. Ms. Tremain testified on behalf of Complainants. She offered the owner’s opinion of value of $56,000 based upon the purchase of the subject property from HUD. Housing and Urban Development (HUD). The following exhibits were offered into evidence on behalf of Complainants.
|A||Complainant’s Statement on valuation of the property||Received|
|B||Photographs showing condition problems with the structure/property||Received|
|C||Sales Documents on Subject Property||Received|
|D||Bids for construction to correct water drainage/seepage problem||Received|
|E||BidSelect Listing Sheet on Subject property||Objection|
- Respondent’s Evidence. Respondent presented the Appraisal Report and testimony of Thomas P. Butler, State Certified Residential Real Estate Appraiser. The Appraisal Report was received into evidence. The appraiser concluded a true value in money of the subject property as of January 1, 2009, of $105,000.
- Subject Property. The subject property is located at 11713 Old Route C, Russellville, Missouri. The property is identified by map parcel number 8-7-36-4-8. The property consists of a 1.22 acre lot improved by a 1+ story contemporary home constructed in 1999. The house is of frame construction with vinyl siding exterior with slab foundation. The house has a gross living area of 1,556 square feet which includes 1,292 square feet on the main level and an area of 264 square feet located on the upper level. The house has 3 bedrooms with 2 full baths. There is an attached two-car garage. The exterior appears to exhibit normal physical depreciation for a house of its age.
- Water Seepage Problem. Complainants’ home suffers from a water seepage problem. Water seeps through cracks in the slab foundation. At times of water seepage muddy water and earthworms will come up through carpet. This has resulted in interior water damage to various parts of the home. There are other water damage problems in the home.
- No New Construction and Improvements. There was no evidence of new construction and improvement from January 1, 2009, to the date of hearing. Complainants had no plans to do any new construction and improvement prior to January 1, 2010. Therefore the assessed value set for January 1, 2009, will remain the assessed value for the 2010 tax year.
- Ownership History. Subject property was purchased in October 2005 for $132,500. On May 12, 2008, the property was conveyed from South & Associates, P.C., Successor Trustee to Countrywide Home Loans, Inc (Countrywide). On June 9, 2008, the property was conveyed from Countrywide to the Secretary of Housing and Urban Development (HUD).
- Purchase of Property. Complainants purchased the property that is the subject of this appeal under a sales contract dated October 8, 2008, from HUD for $56,000. HUD accepted the contract offer on October 31, 2008. The property was listed by HUD on BidSelect, but was not listed on the local MultiList Service (MLS).
- Complainants’ Evidence Not Substantial and Persuasive. 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 $56,000.
- Respondent’s Evidence Not Substantial and Persuasive. Respondent’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, 2009, to be $105,000.
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
Board of Equalization Presumption
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. 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. Complainants failed to present substantial and persuasive evidence to rebut the presumption of correct assessment and establish 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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- 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.
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.
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. 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. In the present instance, the owners’ opinion is based only upon the October 2008 purchase of the subject property without additional supporting data to establish the purchase of the property from HUD constituted a market transaction. Complainants failed to prove that their opinion of value was based upon a proper foundation. Accordingly, no probative weight can be given the owner’s opinion.
Respondent’s appraiser valued Complainants’ property relying on the sales comparison methodology. Under this approach, three sale properties were analyzed and adjustments were made to arrive at a final indicated value of $105,000. A qualification on this value was made which essentially defaulted the value to replacement cost less depreciation under the Assessor’s mass appraisal system. The Hearing Officer addresses the qualification made to provide future guidance on this matter.
Qualification of Opinion of Value
Mr. Butler included a statement addressing the fact that his concluded value was greater than the value determined by the Assessor or the Board. Specifically, the appraiser qualified his conclusion of value as follows:
“Pursuant to Section 138.060, RSMo this appraiser as an employee of the Cole County Assessor will not advocate a value, which is higher than the highest of (1) the value originally determined by the Assessor, or (2) the value concluded by the Board of Equalization.
“However, with consideration of Section 339.535, RSMo which prohibits certified appraisers from not complying with the Uniform Standards of Professional Appraisal Practice (USPAP) developed by The Appraisal Foundation, USPAP does not allow an Appraiser to develop or report predetermined results. Thus, the opinion of value presented in this report is the result of my personal, impartial, and unbiased analysis. This analysis is presented for the purpose of sustaining the Assessor’s (or Board’s) valuation, and not for increasing the valuation of the property under appeal.” (emphasis in original)
The relevant provision of Section 138.060 reads as follows: “At any hearing before the state tax commission or a court of competent jurisdiction of an appeal of assessment from a first class charter county or a city not within a county, the assessor shall not advocate nor present evidence advocating a valuation higher than that value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period.” (emphasis added)
The restriction on the assessor in a hearing before the commission of not advocating a value higher than the assessor’s or board’s value, whichever is higher, only applies to first class
charter counties or the city of St. Louis. Cole County is a non-charter first class county. Therefore, the statutory restriction is not applicable to appeals from Cole County.
Correction of Defect
Mr. Butler had a sound basis for a condition adjustment to his three comparables for the existence of the water seepage problem which impacts the value of the subject. Based upon bids for construction to correct the problem and prevent future seepage into the home a condition adjustment of -$7,000 was made to each comparable since none of the comparables was known to be burdened by this negative influence. This is an appropriate manner to address known condition problems under the sales comparison approach. Any prospective purchaser would adjust the offer on the property to account for the cost that would be incurred to correct the condition which is causing the water seepage.
Adjustment for Damage
There is the further matter of the damage that had already occurred from this problem. Specifically, the damage included water and mud in the carpet and even earth worms making their way through the slab of the home into and on the carpet. The correction of the defect causing the seepage will not cover the damage that existed. Damage such as this presents a particularly challenging part of the appraisal problem. To ameliorate the damage could require the entire removal of the carpet and some type of patching and sealing to the concrete underlying the damaged carpet.
Neither of the bids for corrective work to prevent seepage covered such an expense. Accordingly, the adjustment made by Mr. Butler did not address this factor of the condition of the subject. The adjustment was proper as far as it went. An additional downward adjustment was warranted. Such an adjustment would require investigation on the part of the appraiser to obtain data as to the cost to correct the damage. Any prospective purchaser would most certainly take the cost to repair into account in the purchase of the subject.
Without addressing this condition problem, which is clearly a negative influence on the subject and adjusting each comparable to account for this factor, the concluded value of $105,000 overstates the fair market value of Complainants’ property as of January 1, 2009. Therefore, the conclusion of value of $105,000 is not substantial and persuasive evidence to rebut the presumption of correct assessment and establish the value tendered by Exhibit 1.
Evidence presented by Complainants and Respondent was insufficient to rebut the presumption of correct assessment by the Board. Accordingly, the value set by the Board must be affirmed.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Cole County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2009 and 2010 is set at $16,950.
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. 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, 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. 
The Collector of Cole 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 February 26, 2010.
STATE TAX COMMISSION OF MISSOURI
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 26th day of February, 2010, to: Revetta Tremain, 11713 Old Route C, Russellville, MO 65074, Complainant; Jill LaHue, County Counselor, 311 E. High Street, Jefferson City, MO 65101, Attorney for Respondent; Christopher Estes, Assessor, 210 Adams Street, Jefferson City, MO 65101; Marvin Register, Clerk, Cole County Courthouse Annex, Room 201, Jefferson City, MO 65101; Larry Vincent, Collector, Cole County Courthouse Annex, Jefferson City, MO 65101.
 Secretary of Housing and Urban Development
 Exhibit 1
 Exhibit 1, p. 7
 Exhibit 1, p. 7; Exhibit B; Testimony of Ms. Tremain
 Testimony of Ms. Tremain
 Section 137.115.1, RSMo
 Exhibit 1, p. 3
 Exhibit C, pp. 1, 3 & 4; Testimony of Ms. Tremain. The actual sale was not completed until December 2008, but is referred to as the October 2008 sale in the Decision.
 Testimony of Ms. Tremain
 Testimony of Mr. Thomas P. Butler, Appraiser for Respondent
 Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo
 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)
 Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
 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)
 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 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973)
 Hermel, supra.
 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.
 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).
 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).
 Hermel, supra
 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)
 See, Cupples-Hesse, supra.
 Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
 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).
 Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., 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).
 Exhibit 1, pp. 8 – 15
 Exhibit 1, p. 15
 Finding of Fact 7
 Exhibit D
 Testimony of Ms. Tremain
 Section 138.432, RSMo.