State Tax Commission of Missouri
v.) Appeal No.08-20003
ED BUSHMEYER, ASSESSOR,)
ST. LOUIS CITY, MISSOURI,)
DECISION AND ORDER
Decision of the St. Louis City Board of Equalization reducing the assessment made by the Assessor is AFFIRMED.True value in money for the subject property for tax year 2008 is set at $303,500, residential assessed value of $57,670.Complainant appeared pro se. Respondent appeared by Associate City Counselor. Carl W. Yates, III.Case heard and decided by Senior Hearing Officer W. B. Tichenor.
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.
Complainant appeals, on the ground of overvaluation, the decision of the St. Louis City Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $317,210, assessed value of $60,270, as residential property.The Board reduced the value to $303,530, assessed value of $57,670.Complainant proposed no value on the Complainant for Review of Assessment.A hearing was conducted on November 18, 2008, at the St. Louis City Hall, St. Louis, Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant testified in her own behalf.She gave her opinion of the fair market value as of January 1, 2007, to be between $250,000 and $260,000.Ms. Harker testified the subject property had been listed for sale in the spring of 2005 for $275,000.The following exhibits were offered into evidence.
Sales information and Multi-List Listing Sheets on 8 properties
Information on Hampton House of Liquor
Appraisal Report, dated 12/23/02 on the subject property.
Counsel for Respondent objected to each exhibits on the grounds of Hearsay, Lack of Foundation, Lack of Verification and Relevance.The objections were sustained.The Exhibits are maintained in the Appeal file, but are not part of the record.
Respondent placed into evidence the testimony of Mr. Walter Carter, St. Louis City Appraiser.The appraiser testified as to his appraisal of the subject property.The Appraisal Report, Exhibit 1, of Mr. Carter was received into evidence.Mr. Carter arrived at an opinion of value for the subject property of $303,500 based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of three properties deemed comparable to the subject property.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the St. Louis City Board of Equalization.
2.The subject property is located at 5811 Itaska, St. Louis, Missouri.The property is identified by parcel number 5751-00-02300.The property consists of 4,375 square foot lot improved by a two-story brick, single-family structure of average quality construction.The house was built in 1939 and appears to be in good condition.The residence has a total of seven rooms, which includes three bedrooms, two baths, and contains 1,732 square feet of living area.There is a full basement and a detached two-car garage.
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4.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, 2007, to be $250,000 to $260,000, as proposed.
5.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 located on the same block as the subject.Each sale property sold at a time relevant to the tax date of January 1, 2007.The sale properties were similar to the subject in style (Brick- 2 Story), quality of construction (Average), age (75-76 years), condition (Good), room (7-8), bedroom (3) and bathroom (1.5-2.5) count, living area (1,770 – 1,969 sq. ft.), location (same block), site size (4,375 sq. ft.) and other amenities of comparability.
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
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.Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board.In the absence of such evidence, the Board’s value stands.
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.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:
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.
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. Complainant did not present evidence of value based upon any methodology recognized by the Commission or the Courts of this state.
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, 2007.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.As addressed below, the mandated evidentiary standard was not met by Complainant.
Owner’s Opinion of Value
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 appeal, Ms. Harker gave her opinion of value based upon information contained in three exhibits.Those exhibits were excluded from evidence.There is no substantiation for the opinion of value.The opinion does not rest upon proper elements or a proper foundation.It can be given no probative weight in the appeal.The opinion of value was not derived from any appraisal methodology accepted by the Commission for valuation of real estate for ad valorem tax purposes.
Exclusion of Exhibits
Complainant’s exhibits were excluded upon proper objection by Respondent’s Counsel.The basis for the ruling excluding the exhibits is herein provided.
Exhibit A – Sales and MLS Listing Information
Taxpayers often feel that simply by providing a list of recent sales and a few MLS listing or sale data sheets that they can support their opinion of value.This is a seriously mistaken view.The list of sales submitted in this case is quite long.It covers a single letter size page front and back.Beyond the fact that the document is rank hearsay, the list of sales are all from 2008.The only information provided is the address, number of bedrooms, number of baths, selling dates and selling prices.Such information is insufficient for even an appraiser to conclude value for the subject property.
Lists such as this provide no relevant evidence from which the Hearing Officer can conclude any value for a property under appeal.Such a list would only be a starting place for an appraiser to appraise a given property.However, given that the valuation date for this appeal is January 1, 2007, sales occurring a year or more after that date may not be reflective of the January 2007 market.
The bottom line on the evidentiary value of realtor’s lists of property is there is no probative value, without the information being properly analyzed and utilized in an appraisal.The Hearing Officer has no established methodology for taking such data and converting it into an indicated value for a given property.
Exhibit B – Hampton House of Liquors Information
The documents contained in this exhibit consist of a September 22, 2008 letter from the President of the St. Louis Hills Neighborhood Association to neighbors and a summary of Citation and Violations for Hampton House of Liquor.The Exhibit B documents are hearsay.The subject of the letter is a petition to deny the continuance of a liquor license for the Hampton House of Liquor.The Hampton House of Liquor is located at 5013 – 5025 Hampton.This is just one door from the subject at the corner of Itaska and Hampton.
No foundation was laid as to what extent the location of the liquor store might devalue Ms. Harker’s property.A factor such as this is a matter of a great degree of speculation in appraising an impacted property.Without a paired sales analysis, any adjustment for this factor is based on an appraiser’s subjective opinion instead of an objective basis.In other words, the documents provide no dollar basis to assist in the valuation of Complainant’s property.The history of citations and violations for the liquor store does nothing to inform the Hearing Officer as to the impact on fair market value of the property under appeal.
Mr. Carter did not make a specific adjustment to his comparable properties for the subject’s close proximity to the liquor store.The sale comparables are located from three-fourths to a block from Hampton House of Liquors.The Hearing Officer is of the opinion that a location adjustment was warranted.
However, the Hearing Officer also notes that the indicated values of the sale comparables are $321,300, $347,400 and $389,000.The range, median and mean of these values supports a value in excess of the $303,500 settled on by the Appraiser.Even allowing for an adjustment of $15,000 or more for the subject’s proximity to the liquor store, would still support a value of $303,500.In other words, the Carter appraisal made a de facto adjustment by concluding on the $303,500 value in the face of market evidence of a value closer to $340,000 to $350,000.The Hearing Officer is persuaded that the indicated value of $303,530 set by the Board accounts for any negative influence on the subject from the liquor store.
Exhibit C – 2002 Appraisal Report
The final exhibit offered by Ms. Harker was the December, 2002 Appraisal Report.This report concluded on a value as of 12/23/02 of $183,000.The exhibit was excluded as hearsay.It was also not relevant as to the appraisal date.Without the appraiser being present to testify no foundation was laid for its admission into the record.
Appraisal reports with a valuation date relevant to the valuation date in an appeal generally constitute substantial and persuasive evidence.However, if the appraiser is not present at the evidentiary hearing to lay the foundation for admission of the appraisal, it is excluded, as was done in this instance.
Furthermore, Exhibit C provided no basis for Complainant’s opinion of fair market value.It is obvious Ms. Harker believed her home to be worth far more in January of 2007 than the value concluded in the appraisal report.Consequently, it was of no probative benefit in the appeal.
Summary and Conclusion
Complainant failed to rebut the presumption of correct assessment by the Board.Complainant’s opinion can be given no probative weight.Complainant’s opinion of value was rebutted by Respondent’s evidence.The presumption of correct assessment by the Board stands.
The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis City for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax year 2008 is set at $57,670.
Complainant 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 for this Decision.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.
The Collector of St. Louis City, 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 December 23, 2008.
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 23rdday of December, 2008, to:Ruth Harker, 5811 Itaska, St. Louis, MO 63109, Complainant; Carl W. Yates III, Associate City Counselor, 314 City Hall, St. Louis, MO 63103, Attorney for Respondent; Ed Bushmeyer, Assessor, 120 City Hall, St. Louis, MO 63103; Gregory Daly, Collector, 110 City Hall, St. Louis, MO 63103.
 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).
 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.
 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).
 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).
 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).