According to the Petitioners, they are in a “cookie cutter
subdivision” where all the homes have comparable ranch style floor plans. Sales
information from the builder, however, shows there are five floor plans for two
bedroom homes and four floor plans for three bedroom homes in the subdivision.
Multiple options were available. Seven homes, including that of the
Petitioners, in the 51-home subdivision have the walk-out basement option—only
those lots have the required topography. The lots also have various shapes and
sizes. The 2005-2007 sales information shows purchase prices in the
neighborhood ranged from $111,500 to $201,056 (ignoring the condominiums),
suggesting significant variations in those homes. On Jared Street purchase
prices varied from $143,128 to $201,056 (the Petitioners paid the top price).
Conclusory statements that properties are ―similar‖ or ―comparable‖ do not
constitute probative evidence of actual comparability. See Long, 821
N.E.2d at 470. In relying on a comparison approach to prove a value one must
explain the characteristics of the subject property and how they compare to the
purportedly comparable properties. One must also explain how any differences
between the properties affect their relative market value-in-use. See Id.
at 470-471. In this case, the Petitioners failed to provide the kind of facts
or analysis that would be required for any meaningful, relevant conclusions
based on other sales in Fruitridge Park. While paying much more than the
average price1 for a home in this neighborhood might not have been the best
investment, that point does not prove a more accurate market value-in-use.
The Petitioners focused on the property at 2071 Jared Street,
describing that comparable as “the cornerstone of our appeal.” The Petitioners
paid $201,057 for their property and the purchase price for 2071 Jared was
$184,243. They also compared the builder’s list price for their house
($180,700) to the builder’s list price for 2071 Jared ($163,900). The price
difference stems from different base models as well as the Petitioners’ extra
options. A letter from the Harrison Township Assessor describes 2071 Jared as "virtually the same" as the Petitioners’ home after adjustments for square
footage, the sun room, and the finished basement. The Petitioners attempted to
diminish those differences by speculating the owners of 2071 Jared finished the
basement after buying the property, but they did not prove it. The record does
not support any kind of adjustment based on the purportedly finished basement
at 2071 Jared. Nevertheless, both the house prices and purchase prices show the
overall difference between those properties is approximately $16,800.
Adding the $16,800 difference ($184,200 + $16,800 = $201,000)
to the purchase price for 2071 Jared gives an amount that is very close to the
disputed assessment. Perhaps it might roughly support the assessment. Our
determination, however, does not rest on that point because nobody really
established how the value on February 25, 2008, relates to the required
valuation date, January 1, 2007. See Long, 821 N.E.2d at 471. (According
to some of the evidence the Petitioners presented, sale prices were declining
during this time.)
The Petitioners presented evidence relating to one other sale
in the Fruitridge Park subdivision. It was the property at 1974 Jasper Street.
They offered evidence that 1974 Jasper sold for $165,194 in October 2006 and
sold again in November 2008 for only $137,500. The Petitioners made no
substantial attempt to demonstrate comparability of the subject property and
1974 Jasper. They relied on the 1974 Jasper sales to prove ―collapsing‖ home
prices in Fruitridge Park. According to the Petitioners this property suffered
a 16.76% loss in value in approximately two years. No evidence of the
circumstances related to the second 1974 Jasper sale was presented.3 Therefore,
it is impossible to draw any legitimate conclusion about the cause for that big
loss. This bare-bones evidence does not prove all the properties in Fruitridge
Park suffered that same loss from 2006 to 2008. To a limited extent, this
evidence might help show some sort of decline in value over that period.
The Petitioners did not prove a more accurate market
value-in-use for the subject property based on their purchase price or any
comparable sale, but that point is not what this case is all about. Their case
really rests on a claim for uniformity and equality, which they allege to be
lacking.
According to the Tax Court, “when a taxpayer challenges the
uniformity and equality of his or her assessment one approach that he or
she may adopt involves the presentation of assessment ratio studies, which
compare the assessed values of properties within an assessing jurisdiction with
objectively verifiable data, such as sales prices or market value-in-use
appraisals.” Westfield Golf Practice Center v. Washington Twp. Assessor,
859 N.E.2d 396, 399 n.3 (Ind. Tax Ct. 2007). Such studies, however, must be
prepared according to professionally acceptable standards. See Kemp v. State
Bd. of Tax Comm’rs, 726 N.E.2d 395, 404 (Ind. Tax Ct. 2000). Such studies
must be based on a statistically reliable sample of properties that actually
sold. See Bishop v. State Bd. of Tax Comm’rs, 743 N.E.2d 810, 813 (Ind.
Tax Ct. 2001) (citing Southern Bell Tel. and Tel. Co. v. Markham, 632
So.2d 272, 276 (Fla. Dist. Co. App. 1994).
The Petitioners’ case does not meet that standard. The Petitioners
did not present such a study or similar evidence. They simply argued that their
property is over-assessed based on the assessed value of 2071 Jared. More
specifically, they argued that because the value of the subject property is
only $16,800 more than 2071 Jared, then their assessment should only be $16,800
more than the assessment for 2071 Jared. Their proposed figure is $178,700. Their
approach assumes the 2071 Jared assessment to be a valid starting point, but
the Petitioners failed to prove it is. From the record in this case it would be
just as possible to conclude the assessment for 2071 Jared should be raised so
it is only $16,800 less than the Petitioners’ current assessment. That dilema
is the reason a statistically reliable sample of data is important, but it was
not presented in this case. Therefore, even though the Petitioners presented
evidence and calculations that come up with a much lower assessment for their
property, they failed to establish that their proposed number would actually
lead to better uniformity and equality for anything except (perhaps) 1959 and
2071 Jared. That reason does not support the Petitioners’ claim.
The Petitioners also argued that in upper scale neighborhoods
the asking price is almost always higher than the assessed value, while
property in middle class neighborhoods almost always has an asking price lower
than the assessed value. The Petitioners presented no probative evidence in
support of this contention. They merely relied on a single property in Idle
Creek, 4477 Cart Path, to show how upper scale neighborhoods are assessed.
Drawing any kind of conclusion based on a sample of one, however, is extremely
unreliable. See Kemp, 726 N.E.2d at 404; Bishop, 743 N.E.2d at
813. Their analysis, however, suffers from additional serious problems. The
evidence only establishes an asking price for 4477 Cart Path, not a
selling price. Furthermore, identifying the time that property was offered
as ―a few years back‖ is insufficient. Accordingly, the conclusory statements
that were offered do not constitute probative evidence of any kind of
unacceptable distinction between neighborhoods. Whitley, 704 N.E.2d at
1119.
The price-related differential (PRD) is a statistical measure
that determines whether there is an assessment bias between higher and lower
priced properties, as the Petitioners claimed. To conform to generally accepted
standards, the PRD must be between 0.98 and 1.03. 50 IAC 27-4-5(d). The
Respondent introduced evidence, supported by thirty pages of sales data for
more than 1,300 sold properties, that the PRD in Harrison Township was 1.02.
This number is within the statistically acceptable range, and to the extent it
might have been necessary to do so, it serves to rebut the Petitioners’ claim
about more expensive properties getting favorable assessments in comparison to
less expensive properties.
The Petitioners failed to make a case. Therefore, the
Respondent’s duty to support the assessment with substantial evidence was not
triggered. Lacy Diversified Indus. v. Dep’t of Local Gov’t Fin., 799
N.E.2d 1215, 1221-1222 (Ind. Tax Ct. 2003).
