IN THE STATE TAX COMMISSION OF MISSOURI
|TUBA IMRE & JENMEI ZHAO||)|
|v.||)||Appeal No. 14-10848|
|JAKE ZIMMERMAN, ASSESSOR||)|
|ST. LOUIS COUNTY, MISSOURI||)|
DECISION AND ORDER
Decision of the Assessor of St. Louis County is SET ASIDE. No Board of Equalization Hearing occurred. Complainants submitted substantial and persuasive evidence to establish the fair market value of the property. Although Respondent also submitted evidence that was somewhat persuasive, such was not as persuasive as Complainants’ evidence.
True value in money for the subject property for tax year 2014 is set at $170,000, residential assessed value of $32,300.
Complainant appeared by counsel Jack Fishman
Respondent appeared by counsel Steve Robson.
Case heard and decided by Senior Hearing Officer John Treu.
Complainant appeals, on the ground of overvaluation, the assessment by the St. Louis County Assessor. The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2013. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction and improvement to the property. Section 137.115.1 RSMo
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission.
- Evidentiary Hearing. The Evidentiary Hearing was held on 6/17/2015 at the St. Louis County Administration Building, Clayton, Missouri.
- Identification of Subject Property. The subject property is identified by map parcel number or locator number 16Q210451. It is further identified as 80 Spring Valley Drive, St. Louis County, Missouri. (Exs. A, B, I and 1)
- Description of Subject Property. The subject property consists of a 13,542 square foot tract of land improved by a single family, residential ranch style home of economy quality, with 2,037 square feet of living area. Amenities include 4 bedrooms, 2 bathrooms, a two car attached garage a fireplace, a deck and an enclosed porch. The subject property is listed as having 1,000 square feet of finished basement. (Ex. C, D & 1)
- Sale of Subject. The subject property was purchased by Complainant on 7/17/2014 for $170,000. The property was listed for $169,000. Cash was paid for the property, with no mortgage being taken out. A trust was the seller. No one was living in the house at the time of sale. The subject property was on the market for 20 days. There were 15-16 offers made on the property. (Ex. A & Evidentiary Hearing Testimony). See, Methods of Valuation, infra.
- Assessment. The Assessor valued the property at $254,300. (Complaint for Review of Assessment and Ex. 1)
- Complainant’s Evidence. Complainant offered into evidence Exhibits A through J. Exhibit A consisted of a HUD settlement statement. Exhibit B consisted of the MLS listing of the subject property. Exhibit C consisted of a general inspection report regarding the subject property. Exhibit D consisted of pictures of the subject property taken in April of 2015. Exhibit E consisted of 6 purported comparables. Exhibit F consisted of an MLS listing of 159 Ridgecrest, Chesterfield, MO. Exhibit G consisted of a comparison of the Exhibit F property before and after renovation. Exhibit H consisted of the STC property tax booklet. Exhibit I consisted of the tax bills for 2014 which complainants received. Exhibit J consisted of a chronological record regarding the subject property. Exhibits A, B and D were received into evidence without objection. Exhibits C, F, G, H, I and J were objected to, J was withdrawn by Complainants’ counsel, objections were overruled and the exhibits were received into the evidentiary record. Exhibit C was received for the limited purpose of the pictures and the state of mind of complainants regarding the report. Exhibit E was objected to, objection was sustained and the exhibit was excluded from the evidentiary record.
- Even Year Appeal. The assessed value for 2014 is only being appealed. Therefore, only the assessed value for 2014 is determined herein.
- Respondent’s Evidence. Respondent offered into evidence Exhibit 1 – Appraisal Report dated April 1, 2015 with an Effective Date of January 1, 2013 by Sharon Kuelker. Respondent also offered into evidence Exhibit 2- a comparative market analysis. Exhibits 1 and 2 were objected to, objections were overruled and the exhibits were received into the evidentiary record. Respondent advocated a value of $198,000. (Ex. 1)
- Assessment Value Established. The evidence presented by Complainants was substantial and persuasive to establish the fair market value of the subject property to be $170,000, assessed residential value of $32,300. See, Complainants Prove Value, infra.
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. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
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. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property are assessed at set percentages of true value in money. Section 137.115.5, RSMo – residential property at 19% of true value in money; commercial property at 32% of true value in money and agricultural property at 12% of true value in money.
Presumption In Appeal
As there was no Board of Equalization decision in the present appeal, this appeal is decided free of any presumption.
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, 2013. Hermel, supra. 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.” 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). 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.
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. 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). True value in money is defined in terms of value in exchange and not value in use. Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).
It is the fair market value of the subject property on the valuation date. Hermel, supra.
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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- 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. 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.
Investigation by Hearing Officer
In order to investigate appeals filed with the Commission, the Hearing Officer may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification or assessment of the property. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Section 138.430.2, RSMo. The Hearing Officer during the evidentiary hearing made inquiry of Complainant and Respondent’s appraiser.
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. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
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. St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
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. 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). 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. 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).
The Supreme Court of Missouri has also held that 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. St. Joe Minerals Corp., supra
Opinion Testimony by Experts
An expert’s opinion must be founded upon substantial information, not mere conjecture or speculation, and there must be a rational basis for the opinion. Missouri Pipeline Co. v. Wilmes, 898 S.W. 2d 682, 687 (Mo. App. E.D. 1995). The State Tax Commission cannot ignore a lack of support in the evidence for adjustments made by the expert witnesses in the application of a particular valuation approach. Drey v. State Tax Commission, 345 S.W. 2d 228, 234-236 (Mo. 1961), Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W. 3d, 341, 348 (Mo. 2005).
The testimony of an expert is to be considered like any other testimony, is to be tried by the same test, and receives just so much weight and credit as the trier of fact may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer, as the trier of fact, has the authority to weigh the evidence and 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 may accept it in part or reject it in part. Beardsley v. Beardsley, 819 S.W. 2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W. 2d 605, 607 (Mo. 1981); Scanlon v. Kansas City, 28 S.W. 2d 84, 95 (Mo. 1930). 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.
Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. SC. 2004); Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).
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. The actual sales price, between a willing seller, who is not obligated to sell and a willing buyer who is not compelled to buy, establishes an outer limit on the value of real property. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526 (App. E.D. 1993).
Complainant Proves Value
Complainant presented substantial and persuasive evidence to establish a fair market value as of January 1, 2013, to be $170,000 for the subject property. The Hearing Officer is persuaded that the purchase by Complainants of the subject property on 7/17/2014 was an open market, arms-length sale. Although the Hearing officer does believe that the seller may have been somewhat more motivated than other sellers, many open market, arms-length sales involve an owner who has moved out of town.
Both buyer and seller had brokers. The property was listed on MLS. Multiple offers were made on the property. Unlike an auction, the prospective buyers did not know what other buyers were offering for the property.
Additionally, the subject property suffers from many maintenance issues, some of which would appear to be subject to homeowner repair or replacement, with others which would seem to require professional repair or replacement. Such include, brick damage, fascia board damage, roof damage, flashing damage around skylights and plumbing vent, chimney damage, garage door damage, several studs in garage partially pushed off bottom plate, outdated linoleum, outdated carpet, outdated kitchen design, outdated kitchen appliances, outdated bathrooms, broken master bedroom window latch, windows appearing to be in need of replacement, dining room bay window horizontal wood appears to need replacement, patio sliding door locking mechanism needs replacement, water damage on ceilings and floors, bath ceramic tile coming off wall, faucets corroding, home foundation cracked, burned out outlet, sliding doors missing from one closet. Peeling wallpaper, deck in poor repair and a porch light in need of repair or replacement
Although Respondent’s appraiser made condition adjustments between the subject and the 3 comparables utilized, based upon MLS listings regarding the 3 comparables, such MLS sheets were not included in the appraisal report and therefore the Hearing Officer was unable to look at such. Respondent’s appraiser did not do actual viewings of the interiors of the comparables utilized. Regarding comparable #2, a downward condition adjustment of $30,000 was made, compared to $10,000 adjustments to comparables #1 and #3. Additionally, although the subject property is listed as having 1,000 square feet of finished basement, the condition of such makes it questionable whether such adds any market value to the property.
The assessed valuation for the subject property as determined by the Assessor for St. Louis County, for the subject tax day, is SET ASIDE.
The assessed value for the subject property for tax years 2014 is set at $32,300.
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 facts or law as 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, MO 65102-0146, 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 application for review is based will result in summary denial. Section 138.432, RSMo
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 the possible 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 July 2nd, 2015
STATE TAX COMMISSION OF MISSOURI
Senior Hearing Officer
Delivery or Notice was made via mail, email, fax, or personally on July 2nd, 2015 to the following Individuals of this Decision, Order &/or Holding
Jack Fishman, Attorney for Complainants, Fishmanlawfirm@aol.com
Steve Robson, Assistant County Counsel, Attorney for Respondent, SRobson@stlouisco.com
Jake Zimmerman, Assessor, email@example.com
Mark Devore, Collector, MDevore@stlouisco.com
Genevieve Frank, Clerk, firstname.lastname@example.org
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146