State Tax Commission of Missouri
SHAWN & CYNTHIA WILLIAMSON,)
)
Complainants,)
)
v.) Appeal Number 09-20005
)
ED BUSHMEYER, ASSESSOR,)
ST. LOUIS CITY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the St. Louis City 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 $124,000, residential assessed value of $23,560.Complainant, Shawn Williamson, appeared pro se.Respondent appeared by Associate City Counselor, Carl W. Yates III.
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 City 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
1.Jurisdiction.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.Evidentiary hearing was held on February 10, 2010, in the Assessor’s Conference Room, City Hall, St. Louis, Missouri.
2.Assessment.The Assessor appraised the property at $151,790, residential assessment of $28,840.The Board of Equalization reduced the value to $149,105, assessed value of $28,330.
3.Subject Property.The subject property is located at 2927 Park Ave., St. Louis, Missouri.The property is identified by map parcel number 1266-00-0025-0.The property consists of a lot improved by a two story brick veneer and frame single-family residence containing approximately 1,484 square feet of living area, build in 1997.There is a partial basement with approximately 371 square feet of area, the remaining 371 square feet of basement contains garage space.There is some storm damage to the roof.The home is rated in average condition.No recent updates have been made to the property.[1]
4.Complainant’s Evidence.Mr. Williamson testified in his own behalf.He stated his opinion of the fair market value of his property as of January 1, 2009, to be $100,000 based upon CMA reports.Complainant offered into evidence two exhibits.Exhibit A consisted of bids for repairs and renovations to the subject home.Exhibit B consisted of two CMA reports. Counsel for Respondent objected to both exhibits.Objection was overruled as to Exhibit A and sustained as to Exhibit B.See, Ruling on Objections, infra.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 $100,000, as proposed.There was no evidence of new construction and improvement from January 1, 2009, to December 31, 2009.Therefore, the assessed value for 2009 will remain the assessed value for 2010.[2]
5.Respondent’s Evidence.The properties relied upon by Respondent’s appraiser, in developing his sales comparison approach, were comparable to the subject property for the purpose of making a determination of value. The sale properties were located within three blocks 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 $124,000.
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.[3]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[4] 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.[5]Complainant failed to present substantial and persuasive evidence to rebut the presumption of correct assessment.Evidence presented by Respondent was sufficient to rebut the presumption and establish the true value in money as of January 1, 2009 for the subject property.
Ruling on Objections
Exhibit A – Bids for Repairs and Renovations
Counsel for Respondent objected to Exhibit A – copies of bids for repairs and renovations – on the grounds of hearsay, lack of foundation and lack of relevance.Objection was overruled.Notwithstanding the hearsay nature of repair bid documents, it is the practice of the Commission to receive the same into evidence, if the bid is timely to the valuation date and on a letterhead or other appropriate form to establish a bid from a company and not just handwritten or typed notes of the taxpayer.
It is not practical to have contractors to appear to testify as to the basis for the bid they have provided and lay the foundation for admission of the bid document.The testimony of the homeowner is sufficient to establish the foundation that they received the bid from the contractor.The exact dollar amount for a given repair does not necessarily equate to what the market will recognize for the condition that needs to be corrected in the property under appeal.A given bid may include costs that are not in the nature of repair, but renovation, which may have been the case in this instance.All of these factors can be weighed by the Hearing Officer.Repair bids are relevant to the issue of the condition of the home and the items of deferred maintenance being claimed by the taxpayer and serve to support any testimony or photographs concerning same by the homeowner.They are received for this purpose.
Exhibit B – CMA Reports
Counsel for Respondent objected to the CMA reports on the grounds of hearsay and lack of foundation.Objection was sustained and the exhibit was excluded from evidence.Exhibit B is maintained in the case file, but is not part of the evidentiary record.
Taxpayers often wish to use CMA or MultiList documents to prove value.These documents suffer from the problem of hearsay.This hearsay issue, unlike the matter of repair bids, is not such that such sales data is deemed admissible before the Commission.
There is the further problem that raw sales or listing data does not possess a sufficient foundation to provide relevant information to value any given property, other than possibly the properties listed in such reports.Even if a homeowner selects properties from such data that he or she believes are comparable to the subject, this does not establish comparability.
The information given in a CMA Report provides address, bedrooms, baths, square footage of living area, lot size, age, sale date, days on market, list price and sale price.All of this information, in the hands of a qualified appraiser, can be useful for performing an appraisal.However, when presented to the Hearing Officer as nothing but raw sales data it has no relevance to establish value for the property under appeal.Without identifying specific properties and establishing that they are in fact comparable for purposes of doing an appraisal, insuring that the transaction was an arm’s-length, open market transaction, and making appropriate adjustments to account for differences between the subject and each comparable, a CMA Report is irrelevant.
The Hearing Officer has no basis to take any of the data and attempt to appraise the subject property.That is not the role of the Hearing Officer.Unless a homeowner establishes appraisal expertise by education, training and experience, any conclusions drawn from such sales data by the owner has no probative weight.Accordingly, such documents as Exhibit B are not received into evidence.
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.[6]It is the fair market value of the subject property on the valuation date.[7]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.[8]
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.[9]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.[10]Complainant’s evidence failed to present an opinion of value derived from a recognized approach to the valuation of real property for ad valorem tax purposes.Respondent’s presented a conclusion of value derived from the sales comparison approach to value.
Complainants Failed To Meet 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.[11]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.”[12]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[13]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.[14]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[15]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[16]Mr. Williamson concluded an opinion of value of $100,000.He based this upon information he observed in Exhibit B, offers he had heard of on other properties and his purchase in 1998 at $89,000.None of these provide a proper foundation for the owner’s opinion.In short, there is no evidence on the record to establish that the true value in money of Complainants’ property as of January 1, 2009, was $100,000.The methodology use to arrive at the opinion of value is not an accepted means to determine fair market value.Accordingly, no probative weight can be given to the opinion of value.Complainants failed to meet the required 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.[17]Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $124,000 for the residential portion of 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 Mr. Rowland 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.Based upon Exhibit 1 and the testimony of Mr. Rowland, the Hearing Officer finds the fair market value of the property under appeal as of January 1, 2009, to be $124,000, residential assessed value of $23,560.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis City for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2009 and 2010 is set at $23,560.
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 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.
Failure to state specific facts or law upon which the appeal is based will result in summary denial. [18]
Disputed Taxes
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 February 26, 2010.
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 26thday of February, 2010, to:Shawn Williamson, 2927 Park Avenue, St. Louis, MO 63104, 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.
___________________________
Barbara Heller
Legal Coordinator
[4] 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).
[5] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[6] 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).
[8] 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.
[9] 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).
[10] 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).
[12] 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).