State Tax Commission of Missouri
JUDITH M. TRYNIECKI,)
)
Complainant,)
)
v.) Appeal Number 07-10562
)
PHILIP MUEHLHEAUSLER, ASSESSOR,)
ST. LOUIS COUNTY,MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Hearing Officer finds Complainant did not rebut the presumption of correct assessment by the Board. Respondent presented clear, cogent and convincing evidence to sustain the Assessor’s original value. True value in money for the subject property for tax years 2007 and 2008 is set at $25,600, residential assessed value of $4,860.
Complainant 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
Complainant appeals, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $25,600, assessed value of $4,860, as residential property.Complainant proposed a value of $10,000, assessed value of $1,900.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.
Complainant’s Evidence
Ms. Tryniecki testified in her own behalf.She stated her opinion of value to be $10,000, based upon the general condition of her home.Four exhibits were offered into evidence.Counsel for Respondent objected to Exhibits B and C on the grounds of lack of foundation, hearsay and relevance.The objections were sustained.Exhibits B and C are maintained in the Commission file for the appeal, but are not part of the evidentiary record in this case.
|
Exhibit |
Description |
Action |
|
A |
Photographs showing condition of subject home |
Received |
|
B |
Neighborhood Assessment Data |
Excluded |
|
C |
Repair bids and deferred maintenance items |
Received |
|
D |
Newspaper Articles |
Excluded |
Respondent’s Evidence
Respondent placed into evidence the testimony of Mr. Eric Hubbard, Missouri State Licensed Residential Real Estate Appraiser for St. LouisCounty.The appraiser testified as to his appraisal of the subject property.The Appraisal Report (Exhibit 1) of Mr. Hubbard was received into evidence.Mr. Hubbard arrived at an opinion of value for the subject property of $26,000 based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of five 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 County Board of Equalization.
2.The subject property is located at 7039 Beulah Ave., St. Louis, Missouri.The property is identified by parcel number 14G211284.The property consists of a 10,494 square foot lot improved by a frame bungalow, single-family structure of fair quality construction.The house was built in 1933 and appears to be in fair condition.The residence has a total of four rooms, which includes one bedroom, one bath, and contains 800 square feet of living area.There is a full unfinished basement.[1]
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 $10,000, as proposed.
5.The properties relied upon by Respondent’s appraiser were comparable to the subject property. The five 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, in a range from October, 2005 to May, 2006.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.
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.Each of the sale properties were judged to be in fair (as is) condition, like the subject. The net adjustments ranged from -3.2% to -25.4% of the sales price.
7.The adjusted sales prices for the comparables calculated to $27,650, $29,500, $24,000, $26,125 and $27,600, respectively.The appraiser concluded on a $26,000 value which calculated to a value per square foot of $32.50 compared with the sales prices per square foot of living area for the comparables of $30.25, $34.85, $31.57, $32.93 and $48.31. 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 appraisal was accepted only to sustain the original assessment made by the Assessor and sustained by the Board and not for the purpose of raising the assessment above that value.Respondent meet the standard of clear, convincing and cogent evidence in this appeal to sustain the original valuation of $25,600.
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.[2]
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[3]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.[4]Ms. Tryniecki provided no market data upon which a conclusion could be made that as of January 1, 2007, the subject property would have only had a fair market value of $10,000.Therefore, the presumption of correct assessment was not rebutted.
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.[5]It is the fair market value of the subject property on the valuation date.[6]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.[7]
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.[8]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.[9]The opinion of value given by Ms. Tryniecki was not supported by any relevant data or methodology for the valuation of real property accepted in appeals before the Commission.
Complainant Failed To Meet 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.[10]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.”[11]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[12]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.[13]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[14]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[15]The testimony of Ms. Tryniecki was not supported by market data to support her assertion that her property had a value of only $10,000, or $12.50 per square foot of living area on January 1, 2007.There was no supporting documentation for the owner’s opinion of value.The owner’s opinion of value when unsupported by market data amounts to nothing more than speculation and conjecture.Ms. Tryniecki’s opinion was not shown to be ground in proper elements or a proper foundation.Therefore, it had no probative value.
Exhibits A & C
The photographs showing the condition and the items of deferred maintenance are helpful for an understanding of this factor.However, photographs do not establish fair market value.It is impossible to look at a photograph or any series of photographs and arrive at a monetary value for any given piece of real property.
The repair bids, in like manner fail to establish fair market value.Repair bids are helpful to the extent that they provide some indicate of the cost for repairs.However, cost of repairs do not equate to what the market would discount for the property in its existing condition.Cost of repairs is simply a tool which an appraiser can utilize in making an adjustment for a property’s condition.However, as in this instance when the appraiser is relying on sales of properties in an “as is” condition, like the Tryniecki property, repair bids are not generally needed, as no condition adjustment is warranted.
Assessment Data – Exhibit B
The information provided by Ms. Tryniecki in excluded Exhibit B appeared to be an attempt to establish discrimination or some inequality in the assessment process. Notwithstanding the lack of foundation and hearsay problems with the document, it failed to meet the required case law standard to establish inequality in assessment of the subject property.
In order to obtain a reduction in assessed value based upon an alleged inequality of assessment, Ms. Tryniecki must prove that the valuation of her property resulted in the assessment at a greater percentage of value than other residential property, generally, within St. LouisCounty.[16]Evidence of value and assessments of a selected group of properties does not prove discrimination.Substantial evidence must show that all other residential property is generally undervalued.[17]The difference in the assessment ratio of the subject property and the average residential assessment ratio in St. Louis County, taken from a sufficient representative sample, must be shown to be grossly excessive.[18]No other methodology is sufficient to establish discrimination.[19]
The information provided in Exhibit B failed to meet this test.Ms. Tryniecki’s property was assessed at nineteen percent of its fair market value as is required by law.[20]Exhibit B failed to establish that the average residential assessment inSt. LouisCounty was not at the level of nineteen percent of true value in money.Therefore, the information did not prove that the property under appeal was being assessed at a higher percentage of its market value than other residential property in general inSt. LouisCounty.
Exhibit D – Newspaper Articles
Newspaper articles are hearsay.They are generally irrelevant.No matter what the proffered newspaper articles report relative to market trends, sale prices and assessment, they contained no relevant information upon which a valuation of the Tryniecki property could be made.
Respondent’s Burden of Proof
The Respondent has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program.There is a presumption in this appeal that the original valuation, which was sustained by the Board of Equalization, was made by a computer, computer-assisted method or a computer program.There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $25,600, appraised value, Respondent’s evidence must come within the guidelines established by the legislature and must clearly and convincingly persuade the Hearing Officer as to the value sought to be sustained.
The statutory guidelines for evidence to meet the standard of clear, convincing and cogent include the following:
(1)The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and
(2) The purchase prices from sales of at least three comparable properties and the address or location thereof.As used in this paragraph, the word comparable means that:
(a)Such sale was closed at a date relevant to the property valuation; and
(b) Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used.Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics.[21]
Clear, cogent and convincing evidence is that evidence which clearly convinces the trier of fact of the affirmative proposition to be proved.It does not mean that there may not be contrary evidence.[22]The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt.[23]“For evidence to be clear and convincing, it must instantly tilt the scales in the affirmative when weighed against the evidence in opposition and the fact finder’s mind is left with an abiding conviction that the evidence is true.”[24]
Mr. Hubbard’s appraisal constituted clear, cogent and convincing evidence to affirm the Assessor’s original value of $25,600.He drew his group of comparables from sales that like the subject were in only fair condition.The comparables had sold in “as is” condition.This was appropriate for this appraisal problem to account for the condition and deferred maintenance issues from which Ms. Tryniecki’s property suffers.
In any case in St. Louis County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.[25]Therefore, the Hubbard appraisal was received only for the purpose of sustaining the value of $25,600 and not for increasing the value to $26,000.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forSt. LouisCountyfor the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2007 and 2008 is set at $4,860.
Complainant may file with the Commission an application for review of this decision within thirty days of the mailing of the 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. [26]
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:Judith Tryniecki, 7039 Beulah Avenue, St. Louis, MO 63136-1001, 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
[3] 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).
[4] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[5] 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).
[7] 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.
[8] 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).
[9] St. Joe Minerals Corp., supra; 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).
[11] 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).
[14] 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).
[15] 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).