State Tax Commission of Missouri
ROBERTA DEUTSCH, TRUSTEE, )
)
Complainant, )
)
- ) Appeal Number 09-10037
)
MICHAEL BROOKS, )
ACTING ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
)
- )
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 $438,000, residential assessed value of $83,220. Complainant appeared pro se. Respondent appeared by Associate County Counselor Paula J. Lemerman.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, 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
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization. Evidentiary hearing was held on June 15, 2010, at the St. Louis County Government Center, Clayton, Missouri.
- Assessment. The Assessor appraised the property at $473,800, residential assessment of $90,020. The Board of Equalization reduced the value to $450,000, residential assessment of $85,500.[1]
- Subject Property. The subject property is located at 12522 Falling Leaves Court, Creve Coeur, Missouri. The property is identified by parcel number 18P640411. The property consists of 36,476 square foot lot improved by a one-story brick and stucco, ranch, single-family structure of average quality construction. The house was built in 1976 and appears to be in average condition for its age. The residence has a total of nine rooms, with four bedrooms, two full and two half baths, and contains 3,016 square feet of living area. There is a full basement with 2,200 square feet of finish and an attached two-car rear entry garage.[2]
- Complainant’s Evidence. Complainant’s husband appeared with Mrs. Deutsch and testified in her behalf. Exhibit A was received into evidence. Exhibit A consisted of the assessor’s website property record cards on the subject and properties at 12539 Falling Leaves Court, 12545 Ladue Lake Court, 12525 Falling Leaves Court and a plat map of the subject subdivision. The owner’s opinion of the true value in money of the property under appeal, as of January 1, 2009, was $350,000, based on an averaging of per square foot sales prices of the three properties noted above. 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, 2009, to be $350,000, as proposed. There was no evidence of new construction and improvement during 2009. Therefore, the value set for 2009 remains the value for 2010.[3]
- Respondent’s Evidence. Respondent presented the Appraisal Report[4] and testimony of Sharon Kuelker, St. Louis County Residential Appraiser Senior. Ms. Kuelker concluded a value of $438,000, as of January 1, 2009, based upon a sales comparison approach utilizing four sale comparables. The properties relied upon by Respondent’s appraiser were comparable to the subject property for the purpose of making a determination of value. The sale properties were all located within .55 of a mile of the subject. 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. 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 $438,000.
Exhibit 2 – BOE information on Ms. Kuelker’s fourth sale comparable was received into evidence.
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.[5]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[6] 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, 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.[7] Complainant’s evidence did not meet the required standard to rebut the presumption of correct assessment by the Board. Respondent did present substantial and persuasive evidence in the form of the appraisal developed by Ms. Kuelker to rebut the presumption and establish the true value in money for 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.[8] It is the fair market value of the subject property on the valuation date.[9] 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.[10]
Respondent’s appraiser utilized the Standard for Valuation in her appraisal.[11]
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.[12] 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.[13] The methodology utilized by Mr. Deutsch to arrive at the owner’s opinion of value has not been accepted by the Courts of Missouri or the Commission. Respondent’s appraiser concluded the fair market value of the property under appeal relying on a properly developed sales comparison approach.
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, 2009.[14] 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.”[15]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[16] 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.[17]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[18] The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[19] The owner’s opinion of value of $350,000 was derived from averaging the unadjusted per square foot sales prices of three neighboring properties. This average per square foot sales price was then multiplied times the subject living area. This is not an accepted methodology for the appraisal of real estate for ad valorem tax purposes in an appeal before the Commission. Therefore the owner’s opinion of value was based upon improper elements and an improper foundation. It can be given no probative weight on the issue of fair market value. Complainant failed to meet her burden of proof.
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.[20]
Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $438,000 for the subject. 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 Ms. Kuelker 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.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis 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 $83,220.
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. 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, 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. [21]
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 2, 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 2nd day of July, 2010, to: Roberta Deutsch, 12522 Falling Leaves Court, Creve Coeur, MO 63141, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Michael Brooks, Acting Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
___________________________
Barbara Heller
Legal Coordinator
[1] Complaint for Review of Assessment; BOE Decision Letter; Exhibit 1, page 1 of 5
[2] Exhibit 1, Sales Grid, page 1 & 2 of 5
[3] Section 137.115, RSMo
[4] Exhibit 1
[5] Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
[6] 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).
[7] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[8] 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).
[9] Hermel, supra.
[10] 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.
[11] Exhibit 1, Certification Page
[12] 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).
[13] 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).
[14] Hermel, supra.
[15] 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).
[16] See, Cupples-Hesse, supra.
[17] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
[18] 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).
[19] 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).
[20] Hermel, Cupples-Hesse, Brooks, supra.
[21] Section 138.432, RSMo.