Rock Ridge Housing Partners I v Pennel (Taney)

 

ROCK RIDGE HOUSING PARTNERS I,	)
	)
Complainant,	)
	)
v.	)	Appeal No.11-89606
	)
CHUCK PENNEL, ASSESSOR,	)
TANEY COUNTY, MISSOURI,	)
	)
Respondent.	)

 

DECISIONAND ORDER

 HOLDING

 

Assessment by the Assessor is SET ASIDE.Complainant presented substantial and persuasive evidence to establish the true value in money for the property under appeal.

True value in money for the subject property for tax years 2011 and 2012 is set at $1,460,000, residential assessed value of $277,400.

Complainant represented by Counsel, Richard D. Dvorak, Tomes & Dvorak, Overland Park, Kansas.

Respondent represented Pro Se.

Case decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

Complainant appeals, on the ground of overvaluation, the assessment of the Taney County Assessor. The
assessment that is the subject of this appeal was made by the Respondent’s predecessor – Assessor James Strahan.In
the Decision any reference to the  Assessor is to former Assessor James Strahan and not the current Assessor Chuck Pennel.Assessor Pennel will be referred to as needed in the Decision as Respondent.

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2011.[1]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 assessment of the Taney County Assessor[2] which occurred after the deadline for filing an appeal to the Taney County Board of Equalization.

2.Submission Upon Complainant’s Exhibits and Written Direct Testimony.By Bench Order dated 2/25/14 (1:54 p.m.), Respondent was given until and including March 18, 2014, to advise the Hearing Officer, via email, copy to Counsel for Complainant if Respondent wishes to cross-examine Mr. Smith or if Respondents consents to the submission of the case for decision on Complainant’s evidence.Respondent was informed “Failure to respond will be deemed waiver of the right to cross-examine and consent to submission of the case on Complainant’s evidence.”No response by Respondent was made.Therefore, Respondent is deemed to have waived his right to cross-examine Complainant’s expert witness and consented to a decision being rendered based on Complainant’s evidence.

3.Identification of Subject Property.The subject property is identified by map parcel number 18-1.0-02-002-001-003.000.It is further identified as having the address of: 117 Colleen Street, Branson, Missouri.It is otherwise known as Rock Bridge Villas.[3]

4.Description of Subject Property.The subject property consists of a 6.60 acres tract of land improved by a multi-tenant apartment complex consisting of 38 housing units, clubhouse/office building and related supporting amenities.[4]A detailed description is provided in Exhibit A.

5.Assessment.The Assessor appraised the property at $2,665,580, an assessed residential value of $506,460 under a Notice of Change in Assessed Value dated 5/18/11.The Assessor made an amendment to the 2011 tax assessment on 6/15/11, setting a value of $1,751,841, assessed residential value of $332,850.The Assessor made a second amendment to the 2011 tax assessment prior to 10/20/11 setting value at $2,244,950, assessed residential value of $426,540.[5]The October valuation is void.See, No Presumption in Appeal, infra.

6.Appeal to Taney County Board of Equalization.Complainant filed an appeal to the Taney County Board of Equalization on June 15, 2011, based on the original May 18, 2011, change in assessment.A hearing before the Board of Equalization was scheduled for 7/26/11.In June Complainant was informed by the Assessor that Complainant’s property would be given an assessed value of $332,850 and the First Amended Assessment was
made.Complainant then cancelled the appeal to the BOE.In October, Complainant received the Second Amended Assessment increasing the assessed value from $332,850 to $426,540.The October Notice of Change in Assessment informed the taxpayer “IF YOU DO NOT AGREE THAT THE VALUE OF YOUR PROPERTY HAS INCREASED, YOU MUST CHALLENGE THE VALUE ON OR BEFORE JULY 26, 2011 BY CONTACTING YOUR COUNTY ASSESSOR.” See, No Presumption in Appeal, infra.

7.Complainant’s Evidence.Complainant offered into evidence Exhibit A – Appraisal Report of Troy W. Smith, Missouri State Licensed General Real Estate Appraiser and Exhibit B – Written Direct Testimony of Mr. Smith.No objection was made to Complainant’s exhibits and they are received into the record. The Hearing Officer takes official notice of the Complaint for Review of Assessment and the attachments thereto filed with the Commission on December 12, 2011.[6]The Hearing Officer takes official notice of correspondence to the Commission from Complainant’s attorney – Daniel L. Sailler dated 6/19/12.[7]

8.No Evidence of New Construction & Improvement.There was no evidence of new construction and improvement from January 1, 2011, to January 1, 2012, therefore the assessed value for 2011 remains the assessed value for 2012.[8]

9.Substantial and Persuasive Evidence.Complainant’s evidence was substantial and persuasive to establish the true value in money as of January 1, 2011, to be $1,460,000, as established by Exhibits A & B.See, Complainant Proves Value, infra.

10.Respondent’s Evidence.Respondent elected to file no evidence in the appeal.

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.[9]

Basis of Assessment

The Constitution mandates that real property and tangible personal property be assessed at its value or such
percentage of its value as may be fixed by law for each class and for each subclass.[10]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[11]

No Presumption In Appeal

In the present appeal, there does not exist any presumption that that Assessor’s values (appraised or assessed) are correct.[12]The presumption of validity, good faith and correctness of assessment by the County Board of Equalization[13] which usually exists in an appeal is not present in this appeal due to the Assessor’s second assessment of Complainant’s property in 2011 after the deadline for appeals to the Board of Equalization.

In this appeal, Assessor Strahan made a reduction on 6/15/11 that reduced the appraised value of Complainant’s property from $2,665,578 (assessed – $506,460) as set on 5/18/11, to $1,751,841 (assessed – $332,850).He was not required to send a notice of change in assessment.However, after the taxpayer had appealed the $2,665,578 valuation to the Board of Equalization, Mr. Strahan agreed to the valuation of $1,751,841 and Complainant relying on this abandoned any its appeal to the BOE. Since the Assessor had not turned over the assessor’s book he was free to make the change in valuation on 6/15/11.[14]Therefore, when the assessor’s book was
completed as of 7/1/11, the assessed value of $332,850 was set for 2011 and 2012 in the absence of new construction and improvement during 2011.

In October, 2011, the Assessor increased the assessed valuation from $332,850 to $426,540.The issuing a
notice of change for this was not authorized by statute in that notice of change in assessed values of real property have to be send by the assessor by June 15^th of each year.[15]Furthermore, the bold face all capitals NOTICE TO TAXPAYER that if it was desired to challenge the new assessed value the county assessor had to be contacted before July 26, 2011 was, of course, impossible to do.Assessor Strahan had closed the assessor book as of 1/1/11, it was no longer under the control of the assessor and as such he had no authority to increase the value of Complainant’s property from the $332,850 that had been set on or about 6/15/11.Therefore, the assessment of the subject property at $426,540 was void ab initio,[16] and the tax levied based on the assessment of $426,540 was an erroneously imposed tax due to the Assessor’s unauthorized increase in the assessed value in October, 2011.

The actual value challenged in this appeal is appraised value of $1,751,841 (assessed – $332,850), set
on 6/15/11.For which no presumption exists by operation of law (Section 138.431, RSMo) that such value is correct, and no evidence exists in the record to establish such a 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.[17]True value in money is defined in terms of value in exchange and not value in use.[18]It is the fair market value of the subject property on the valuation date.[19]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.[20]

 Complainant’s appraiser concluded value under this Standard.[21]

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.[22]

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.[23]The sole evidence on the issue of what a wiling buyer and seller would come to as an agreed purchase price for the property under appeal as of 1/1/11 consists of the appraisal report of Mr. Smith and his testimony.

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.[24]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.[25] Complainant’s appraiser concluded value by performing two of the accepted methodologies for the appraisal of real property, the cost and income approaches

Opinion Testimony by Experts

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.[26]

The facts and data relied upon by Mr. Smith are of the type generally and reasonably relied upon by real property appraisal experts in forming their opinions of value for property such as the subject.The data, having been employed by a state licensed real estate appraiser and being recognized by the Hearing Officer to  be the type of information that is routinely utilized by real estate appraisers, are deemed to be otherwise reliable.

Complainant Proves Value

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, 2011.[27]Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[28]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.[29]

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.”[30]A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.Complainant has met the required standard to establish the true value in money for the subject property.There is no evidence that rebuts or
challenged the Smith appraisal.There is no logical basis upon which the Hearing Officer can or should reject out of hand Complainant’s evidence.The Smith appraisal constitutes substantial and persuasive evidence to establish the
value of the subject property as of 1/1/11 to be $1,460,000. 

ORDER

The assessed valuation for the subject property as determined by the Assessor for Taney County for the subject tax day is SET ASIDE. 

The assessed value for the subject property for tax years 2011 and 2012 is set at $277,400.

SO ORDERED April 25, 2014.

STATE TAX COMMISSION OF MISSOURI

 W. B. Tichenor

Senior Hearing Officer