State Tax Commission of Missouri
VAN LAM,)
)
Complainant,)
)
v.) Appeal Number 09-10641
)
MICHAEL BROOKS, ACTING 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 SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $300,000, residential assessed value of $57,000.Complainant appeared pro se.Respondent appeared by Associate County Counselor, Paula J. Lemerman.
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 County Board of Equalization, which sustained 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 County Board of Equalization.A hearing was conducted on October 5, 2010, at the St. LouisCountyGovernmentCenter,Clayton,Missouri.
2.Assessment.The Assessor appraised the property at $406,800, a residential assessed value of $77,290.The Board sustained the assessment.[1]
3.Subject Property.The subject property is located at 2205 Babler Valley Lane, Wildwood, Missouri.The property is identified by locator number 23X410113.The property consists of 3.08 acre lot improved by a one-story vinyl and brick sided frame constructed house with full basement, three-car attached frame garage, covered front porch, wood deck, two patios, paved walkway and a paved driveway leading to the side entry garage.The improvements are considered to be good quality construction.The home was built in 1990 and the improvements are in fair physical condition due to deferred maintenance involved with repairs and replacement items.The roof and exterior trim paint show age and wear, several small damaged areas in the exterior vinyl siding, the blacktop driveway shows age and lack of preservation sealant.There is overgrown landscaping, shrubs and weeds.There is aged interior paint and carpeting.The residence has a total of six rooms above grade that includes two bedrooms, two full and a half bath.It contains 2,404 square feet of living area.The full basement is approximately 2,366 square feet and has approximately 1,500 square feet of finished area with a full bath.
4.Complainant’s Evidence.Complainant testified in her own behalf and gave her opinion of the fair market value as of January 1, 2009, to be $300,000 based upon her purchase on June 1, 2009, from the Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac).Sepid M. Salem, a cousin of Complainant also testified relative to the Complainant’s purchase of the property.Exhibit A – Settlement Statement on Complainant’s purchase and Exhibit B – Unexecuted Residential Sales Contract[2] were received into evidence.There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010.[3]
Complainant’s evidence was 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 $300,000.[4]
5.Listing, Transfer and Sale History of Subject.[5]The subject property was listed in June of 2007 for $499,000.In April 2008, the asking price was reduced to $479,000 and later that year reduced to $449,900.In September 2008, the listing price was reduced to $399,999.In January 2009, the property was transferred as a result of foreclosure for $296,526.The FHLMC listed the property in February 2009 for $318,900.On February 20, 2009, a sale contract was presented to FHLMC for a purchase price of $290,000.The offer was not accepted.In June 2009, Complainant purchased the property from FHLMC for $300,000.The foregoing rebuts evidence presented by Respondent that on January 1, 2009, the property under appeal would have sold for $370,000.
6.Respondent’s Evidence.Respondent presented the appraisal report[6] and testimony of Arthur Froeckmann, State Certified Residential Real Estate Appraiser.Mr. Froeckmann arrived at a conclusion of fair market value of $370,000 relying on a sales comparison approach to value.The four properties relied upon by Respondent’s appraiser were comparable to the subject property for the purpose of making a determination of value of the subject property. The properties were located within less than three-quarters of a mile from 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. Exhibit 1 was received into evidence.
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.Absent the evidence on the prior attempts to sell the subject property and on its own, Respondent’s evidence would have 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 $370,000.
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.[7]
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.[8]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value
in money.[9]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[10]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.The presumption of correct assessment is rebutted when the taxpayer or the Respondent, when advocating a value different than the Board’s value 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.[11]When some substantial evidence is produced by the Complainant or Respondent, “however slight”, the presumption disappears and the Hearing Officer, as trier of facts, receives the issue free of the presumption.[12]Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board.The case is decided free of the presumption.
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.[13]True value in money is defined in terms of value in exchange and not value in use.[14]It is the fair market value of the subject property on the valuation date.[15]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.[16]
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.[17]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.[18] 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.[19]Complainant presented evidence of her voluntary purchase of the property at a time relevant to the valuation date of January 1, 2009.
Complainant Proved Value of $300,000
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, 2009.[20]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.”[21]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[22]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.[23]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[24] The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[25]In this case, the owner’s opinion of the fair market value of $300,000 is based upon her purchase of the property on
June 1, 2009, from the Federal Home Loan Mortgage Corporation.This opinion of value is not based upon either improper elements or an improper foundation.The owner’s opinion and supporting evidence provides sufficient probative value to meet the required standard for substantial and persuasive evidence.
Sale After Foreclosure
The fact that Complainant purchased the property under appeal some six months after it was taken back in foreclosure, does not nullify the purchase as meeting the Standard for Valuation.A foreclosure sale may in fact be valid evidence of the market value of a given
property.[26]The purchase in June 2009 was not a foreclosure sale.It was a sale after foreclosure had occurred, with the property continuing to be on the open market.
The Standard for Valuation requires a willing buyer and seller.That exists under the facts in this case.Simply because the seller was Freddie Mac does not render this sale defective.In point of fact the listing history on this property clearly and irrefutably establishes that as late as three months prior to the 2009 valuation date that the property was listed at $399,999, but received no offers at that asking price.By February, after foreclosure, the asking price had been reduced to $318,900 and there were no purchaser’s at that price.The only offer presented in this record was for $290,000 which was rejected by the seller.Four months later, the property sold for $300,000, supported by an appraisal.[27] The foregoing casts aside what would have otherwise been sufficient evidence to prove value, i.e. the Froeckmann appraisal.
A price agreed to between a willing buyer and seller creates a presumption that the transaction was a market transaction.[28]The law presumes that a sales price has been freely fixed and not under compulsion.The burden then is placed on the party opposing the sale evidence to produce evidence that the sale was not voluntary.[29]Therefore, in this instance the Complainant has the benefit of the presumption that her purchase of the property under appeal in June 2009 was a market transaction.Implicit in that is that the transaction satisfies the criteria of the Standard for Valuation.
Complainant is not required to prove anything other than her purchase.If Respondent wishes to challenge the June 2009 purchase as being outside the boundary of a market sale, he bears the burden of presenting evidence that would establish factors to render the sale invalid as a sale between a willing buyer and willing seller.Simply asserting that the June 2009 purchase was “a foreclosure sale” does not suffice.[30]The record is void of any evidence upon which the Hearing Officer can conclude that the June 2009 purchase does not qualify as a market transaction under the Standard for Valuation.
Conclusion
The actual sale of the subject within six months of the valuation date is substantial and persuasive evidence to establish that the most probably fair market value of the property on January 1, 2009, was $300,000.The presumption of correct assessment by the Board was rebutted and true value in money was established by Complainant.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2009 and 2010 is set at $57,000.
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, 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 application for review is based will result in summary denial. [31]
Disputed Taxes
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 December 8, 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 8thday of December, 2010, to:Van Lam, 3235 Ridgetop View Drive, St. Louis, MO 63129,Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Michael Brooks, ActingAssessor, 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
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
573-751-2414
573-751-1341 Fax
[10] 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)
[11] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[12] United Missouri Bank of Kansas City v. March, 650 S.W.2d 678, 680-81 (Mo. App. 1983), citing to State ex rel. Christian v. Lawry, 405 S.W.2d 729, 730 (Mo. App. 1966) and cases therein cited.
[13] 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).
[14] 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).
[16] 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.
[17] 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).
[18] 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).
[21] 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).
[24] 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).
[25] 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).
[27] Exhibit A, p. 2, Line 803 – Appraisal fee to: Thomas Tempel.Complainant was not provided a copy of the appraisal and was not aware of what the appraised value was.
[30] Exhibit 1, page 1 of 2 – Sales History.Mr. Froeckmann identifies the June 2009 transaction as “a foreclosure sale.”He then identifies the transfer in January 2009 as a foreclosure transfer.This is inconsistent.The property was either sold at foreclosure or transferred in lieu of foreclosure in January 2009.However, the June 2009 sale was a sale after foreclosure had occurred.