Robert & Margaret Young v. Wagner (Ste. Genevieve)

ROBERT A. & MARGARET A. YOUNG,)

)

Complainants,)

)

v.) Appeal Number 09-84501

)

LINDA WAGNER, ASSESSOR,)

STE. GENEVIEVE COUNTY,MISSOURI,)

)

Respondent.)

DECISION AND ORDER

HOLDING

Decision of the Ste. Genevieve County Board of Equalization sustaining 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 $274,400, residential assessed value of $52,140.Complainant, Robert A Young, appeared pro se.Respondent appeared pro se.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, 2009.

SUMMARY

Complainants appeal, on the ground of overvaluation, the decision of the Ste. Genevieve County Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $301,970, assessed value of $57,370, as residential property.The Board reduced the value to $295,460, assessed value of $56,140.Complainants proposed a value of $274,000, assessed value of $52,060.A hearing was conducted on

October 6, 2009, at the Ste. Genevieve County Courthouse, Ste. Genevieve,Missouri.

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.Complainant timely appealed to the State Tax Commission from the decision of the Ste. Genevieve County Board of Equalization.

2.Complainants’ Evidence:Mr. Young testified in his own behalf.The owner’s opinion of value as of January 1, 2009, was $274,000 as shown by Exhibit A.Michael R. Meyer, State Certified Residential Real Estate Appraiser testified on behalf of Complainants with regard to his appraisal of the Complainants’ property.Complainant offered the following Exhibits into evidence.

3.Respondent’s Evidence:Respondent testified in her own behalf.Respondent offered the following Exhibits into evidence.

Complainant objected to Exhibit 1 on the ground of hearsay and the appraiser not being present to be cross-examined.Objection sustained.Exhibit maintained in the appeal file, but not part of the evidentiary record for purposes of rendering a decision.

4.Subject Property.The subject property is located at 3169 Brook Stone Road, Festus, Missouri.The property is identified by parcel number 3-8-28-1.20.The property consists of 8.84 acres improved by a one-story part stone – part stucco, ranch, single-family structure.The house was built in 2001 and appears to be in good condition.The residence has a total of eight rooms, which includes three bedrooms, two baths, and contains 23,65 square feet of living area, above grade.There is a full basement which is 50% finished with a family and recreation room, a bed and bath room. The house has an attached two-car garage.[1]

5.No New Construction/Improvement.There was no evidence of new construction and improvement from January 1, 2009 to the date of hearing and the owner has no plans for any new construction and new improvement prior to the end of 2009.

6.Substantial and Persuasive Evidence.Complainant’s evidence was 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 $274,000.See, Complainants’ Burden of Proof, infra.

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]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[3]The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board is accepted as true only until and so long as there is no substantial evidence to the contrary.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]

Complainants’ evidence as analyzed under Complainants’ Burden of Proof, infra, constituted substantial and persuasive evidence to rebut the presumption of correct assessment and establish the fair market value of the subject property to be $274,000.

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]

Weight to be Given Evidence

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.[8]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 he 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.[9]The Hearing Officer, after a complete review and analysis of the appraisal report received on behalf of Complainants, is persuaded the appraisal report of Mr. Meyer presents credible, substantial and persuasive evidence upon which a finding of true value can and should be based.

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.[10]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.[11] The owner’s opinion of value is grounded upon an appraisal report concluding value under the sales comparison approach to value.This approach is generally recognized to be the strongest approach to value when valuing single family residences, when sufficient sales data is available.There was sufficient sales data of sales at a time relevant to the valuation date of January 1, 2009.

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.[12]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.”[13]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[14]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.[15]

The owner of property is generally held competent to testify to its reasonable market value.[16]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[17]In this instance, the obvious problem with the opinion of value of $274,000 testified to by Mr. Young is that the opinion is based upon an appraisal report with a valuation date of May 28, 2009 instead of January 1, 2009.Mr. Meyer was not prepared at hearing to testify that his opinion of $274,000 as of May 28, 2009 would also be his opinion of value as of January 1, 2009.

Consideration of May 28, 2009, Appraisal

It has generally been the practice of the Commission to sustain relevancy objections concerning any appraisal that does not have the valuation date of January 1 of the tax year under appeal.However, if through investigation[18] and consideration of the underlying sales data the hearing officer determines that the appraisal will provide evidence of value, irrespective of whether the appraiser is prepared to state an adjusted or amended opinion of value, it may be used to determine value.The evidence clearly established the fair market value of the Young’s property as of May 28, 2009, was $274,000.

That conclusion of value was based upon five sales of comparable property and a current listing.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 properly adjusted for those factors which he deemed required adjustment to arrive at an adjusted sales price.The net adjustments ranged from -2% to 13.1% and the gross adjustments ranged from 9.8% to 19%.Both are within a generally accepted range for an appraisal of this nature.

The unadjusted sales prices were: $265,000, $239,000, $230,000, $250,000 and $305,000.The per square foot sales prices calculated to the following amounts: $131.38, $133.82, $124.39, $125.00 and $125.36.

Each sale property sold at a time relevant to the tax date of January 1, 2009.The respective sales dates were: 3/25/09, 4/20/09, 2/25/09, 2/15/08 and 11/3/08.This range of dates from ten and a half months prior to tax date to only 110 days after tax date clearly falls within an acceptable range for a valuation of the property on January 1, 2009.The February 2008, November 2008, and February 2009 sales have a range of per square foot sale values of $124.39 to $125.35, with a median of $125.00 and a mean of $124.91.Based upon these three sales a rather stable market is established for the valuation date of January 1, 2009.The March and April 2009 sales showed higher per square foot sale prices of $131.38 and $133.82 showing an upward move in the market.

No Time Adjustment Warranted

The appraiser deemed it unnecessary to make any time adjustments for any of the sales.Specifically, as to Comparable 4 which occurred over a year prior to Mr. Meyer’s valuation date and Comparable 5 which occurred over 6 months prior to the May 28, 2009 valuation date, the appraiser concluded that “No time adjustment was found to be reliable or necessary.”[19]Indeed, there is no evidence on the record that warrants or will justify a time adjustment for any of the sales forward to or back to the January 1, 2009, valuation date.

None of the other adjustments made by Mr. Meyer are tied to the time of sale versus the time of valuation.The adjustment for difference in living area, type of construction, basement finish, or differences in amenities such as decks, fireplaces, garage, etc., would be the same if the comparables were being used to value the property on May 28, 2009, or January 1, 2009.Therefore, the indicated value concluded as of May 28, 2009, in the absence of evidence to support a time adjustment for a January 1, 2009, valuation data, does constitute substantial and persuasive evidence to rebut the presumption of correct assessment and to establish a value of $274,000.In this particular instance the evidence establishing a value for May 28, 2009, also establishes the value for January 1, 2009.

The evidence clearly demonstrates as to Comparables 3, 4 and 5 no time adjustment for a January 1, 2009 valuation date is warranted, since these three sales demonstrate that sales of comparable properties to the subject were selling for approximately $125.00 per square foot in the time period from February 2008 to February 2009.Based upon these sales, any time adjustment to Comparables 1 and 2 would have to be a minus adjustment to bring them more in line with a value of $125.00 per square foot, instead of the approximately $132.00 per square foot value for these March and April, 2009 sales.

The five sales established the range of values, for sales occurring over a 15 month period,[20] after adjustments to be from $253,700 to $298,900, with a median of $274,400, and an average of $274,380.The Hearing Officer is persuaded that the sales evidence supports a valuation of $274,400.Since no evidence was presented upon which any time adjustment can be made to the underlying sales data, a rejection of the conclusion of value on this basis would be an arbitrary and capricious determination of value.

Consideration of Sales After Valuation Date – Hindsight

It is permissible in hearings before the Commission for the Hearing Officer to exercise “hindsight” in arriving at the valuation of the property under appeal.[21]In this particular instance, the hindsight of considering the February, March and April 2009 sales for the January 1, 2009, valuation date is most appropriate due to their close proximity to that date.

The line for admissibility for post tax day sales evidence will vary from appeal to appeal based upon various factors.It cannot be static for all appeals.Sales, as well as, appraisals dated after January 1^st of a given assessment year are to be weighed by the Hearing Officer in light of all evidence properly received into the record.Reasonable minds can surely differ as to the weight that may be given to any sale or appraisal that is dated prior to or after valuation date.However, the issue of relevance of sales data, and therefore admissibility, must be decided from case to case by the Hearing Officer as the evidence is offered into the record.

Complainants met their burden of proof irrespective of the May 28^th valuation date of the Meyer’s appraisal, since none of the sale comparables required a time of sale adjustment.The underlying sales data establishes the true value in money of the property under appeal as of January 1, 2009 to be $274,400.

ORDER

The assessed valuation for the subject property as determined by the Board of Equalization for Ste. Genevieve County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax years 2009 and 2010 is set at $52,140.

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 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. [22]

The Collector of Ste. Genevieve 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 November 19, 2009.

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 19^thday of November, 2009, to:Robert Young, 3169 Brook Stone Road, Festus, MO 63028, Complainant; Timothy Inman, Prosecuting Attorney, 55 South Third Street, Room 22, Ste. Genevieve, MO 63670, Attorney for Respondent; Linda Wagner, Assessor, 55 S. Third, P.O. Box 26, Ste. Genevieve, MO 63670; Kay Basler, Clerk, 55 S. Third, Ste. Genevieve, MO 63670; Phyllis Vessell, Collector, 55 S. Third, Ste. Genevieve, MO 63670.

___________________________

Barbara Heller

Legal Coordinator