State Tax Commission of Missouri
WILLIAM & KAREN SIEBERT,)
)
Complainants,)
)
v.) Appeal No.07-13072
)
PHILIP MUEHLHEAUSLER, ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.Hearing Officer finds Complainants did not rebut the presumption of correct assessment by the Board.Respondent presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board.True value in money for the subject property for tax years 2007 and 2008 is set at $850,000, residential assessed value of $161,500.
Complainant, William Siebert, appeared pro se.
Respondent appeared by Counsel, Paula J. Lemerman, Associate County Counselor.
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, 2007.
SUMMARY
Complainants appeal, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $851,700, assessed value of $161,820, as residential property.Complainants proposed a value of $646,852, assessed value of $122,900.A hearing was conducted on August 14, 2008, at theSt. LouisCountyGovernmentCenter,Clayton,Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainants’ Evidence
Mr. Siebert testified for the Complainants.He offered his opinion of value as of
January 1, 2007, to be $646,852.This opinion of value was based on sales in the subdivision where the property under appeal is located.Mr. Siebert also testified as to his belief that the value of his property had been diminished by a lawsuit which had been filed in September 2006 relative to the water system which services the eighteen homes in the subdivision being insufficient.
Three exhibits were offered into evidence by Mr. Siebert.Counsel for Respondent objected on the grounds of relevance, hearsay and lack of foundation.The objections were sustained and the exhibits were excluded from evidence.They are maintained in the file for the appeal, but are not part of the evidentiary record in this appeal.
|
Exhibit |
Description |
|
A |
8/10/08 Listing Sheet on property at 305 Barn Side Lane |
|
B |
Page from the Property Record Card – 28T130111 |
|
C |
BOE Decision Letter, dtd 8/21/07 – Locator # 28T420016 |
Respondent’s Evidence
Respondent placed into evidence the testimony of Ms. Sarah Curran, Missouri State Certified Residential Real Estate Appraiser for St. LouisCounty.The appraiser testified as to her appraisal of the subject property.The Appraisal Report (Exhibit 1) of Ms. Curran was received into evidence.Ms. Curran arrived at an opinion of value for the subject property of $850,000 based upon a sales comparison approach to value.In performing her sales comparison analysis, the appraiser relied upon the sales of sic properties deemed comparable to the subject property.A cost approach was also developed which produced an indicated value of $855,300.Exhibit 2, the certificate of value on the transfer of the subject property in December, 2005, was received into evidence.
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 County Board of Equalization.
2.The subject property is located at 321 Barn Side Lane, St. Louis County, Missouri.The property is identified by parcel number28T430181.The property consists of a 1.07 acre golf course lot improved by a one and a half-story brick and frame, single-family structure of very good quality construction.The house was built in 2004 and appears to be in very good condition.The residence has a total of ten rooms, which includes four bedrooms, three full and one half baths, and contains 4,662 square feet of living area.There is a full unfinished basement and an attached three-car garage.[1] The property was purchased in December 2004 by the Sieberts for $846,837.[2]
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4.Complainants’ 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 $646,852, as proposed.
5.The properties relied upon by Respondent’s appraiser were comparable to the subject property. The six properties were located within less than a half mile of the subject.Each sale property sold at a time relevant to the tax date of January 1, 2007.The range of sales was from August, 2004 to April, 2007The 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.
6.The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem. The net adjustments ranged from -6.6% to 7.4% to of the sales price.
7.The adjusted sales prices for the comparables calculated to $844,000, $808,400, $878,200, $838,152, $838,495 and $887,200, respectively.The appraiser concluded on a $850,000 value which calculated to a value per square foot of $182.33 compared with the sales prices per square foot of living area for the comparables of $192.37, $170.44, $172.29, $190.19, $163.94 and $206.88. The comparison of the value per square foot provides a validation check for the appraisal, to demonstrate that the indicated value is consistent with the market for properties such as the subject.
8.Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and to establish the value of the subject, as of January 1, 2007, to be $850,000.
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]
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[4]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]The taxpayer failed to present substantial and persuasive evidence of the market value of the subject property as of January 1, 2007.Respondent’s evidence met the required standard. Ms. Curran 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. In addition, the cost approach added support to the appraiser’s conclusion of 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.[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] Mr. Siebert failed to present an opinion of value supported by an of the recognized methodologies for determining value in an appeal before the Commission.Ms. Curran developed two of the accepted approaches to arrive at fair market value in an appeal before the Commission.
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, 2007.[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]
The evidence presented by Mr. Siebert did not constitute substantial and persuasive evidence of value as of January 1, 2007.Notwithstanding the evidentiary problems of lack of foundation, relevance and hearsay, the offered documents did not properly address market value as of the valuation date.
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. Siebert’s opinion was based in general on sales in the neighborhood.However, the only two sales prices tendered were for 2008 sales.There never was a showing as to how the sales established the owner’s opinion of $646,852.Raw listing data and unadjusted sale prices culled from the Assessor’s records do not provide a proper foundation for an opinion of value.They do not constitute the proper elements for appraising property.Therefore, the opinion presented by Mr. Siebert can be given no probative weight.
A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.”[17]Mr. Siebert’s claim as to a negative effect on the value of his home due to the lawsuit over the adequacy of the subdivision’s water system was not established by competent evidence. What if any effect the pending suit would have on the value of the Siebert property on January 1, 2007 is nothing but a matter of speculation based upon the record in this appeal.
Sale of Subject
Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time.The actual sale price is a method that may be considered for estimating true value.[18]The December 2004 sale of the subject was at a time relevant for the 2007 valuation.Therefore, it was admissible on the issue of value.It provided support for the appraiser’s conclusion of value.It rebutted the claim of Mr. Siebert that the property under appeal was only worth $646,852 on January 1, 2007.There was a total absence of any market data to establish that the market for the subject home had declined by nearly 24% in only 24 months.
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.[19]Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2007, to be $850,000 for the subject.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization forSt. LouisCountyfor the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2007 and 2008 is set at $161,500.
A party may file with the Commission an application for review of this decision within thirty days of the mailing of such 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. [20]
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 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 August 22, 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 22ndday of August, 2008, to:William Siebert, 321 Barn Side Lane, Eureka, MO 63025, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Philip A. Muehlheausler, 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
[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; Exhibit 1.
[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).
[15] 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).
[16] 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).