Here, the Petitioner contends
its property was over-valued for the 2007 assessment year based on the property’s
appraised value. In support of that contention, the Petitioner’s representative
presented a valuation opinion stating that the subject property’s market value
was $17,000 as of January 1, 2007. Ms. LeVeque is an Indiana Certified
Appraiser who certified that she prepared her appraisal in accordance with
USPAP. She considered all three approaches to value and developed an estimate
under one of them—the sales-comparison approach. Thus, her appraisal is
generally probative of the subject property’s value as of the January 1,
2007—the date as of which she valued the property.
Although Ms. LeVeque’s
valuation was as of January 1, 2007, all of the sales that she used in her
sales-comparison approach occurred in 2006. And because she did not adjust those
sales for the time-related difference between the sale dates and appraisal
date, they bear some relationship to the property’s value as of its January 1,
2006, valuation date. Granted that relationship is not exact. But the
Department of Local Government Finance’s rules for annual adjustments that were
in effect at the time of this appeal instructed assessors to use sales from
2005 and 2006 in performing ratio studies for the March 1, 2007, assessment
date. 50 IAC 21-3-3-(a) (“For assessment years occurring March 1, 2007, and
thereafter, the local assessing official shall use sales of properties
occurring the two (2) calendar years preceding the relevant assessment date.”).
Thus, Ms. LeVeque’s valuation opinion bears enough of a relationship to the
January 1, 2006, valuation date to make a prima facie case.
Once the Petitioner raises a
prima facie case that its property was over-valued, the burden shifts to the
assessing official to rebut the Petitioner’s evidence. See American United
Life Insurance Co. v. Maley, 803 N.E.2d 276 (Ind. Tax Ct. 2004). To rebut
or impeach the Petitioner’s case, the Respondent has the same burden to present
probative evidence that
the Petitioner faced to raise its prima facie case. Fidelity Federal Savings
& Loan v. Jennings County Assessor, 836 N.E.2d 1075, 1082 (Ind. Tax Ct.
2005).
The Assessor’s
representative, Mr. Agostino, noted what he considered several inadequacies in
the appraisal report, and specifically the sales that Ms. LeVeque used as
comparables. He argued that Ms. LeVeque used comparable properties that were up
to eleven years older than the subject property without any adjustment and he
questioned her reasons for not considering the first three comparable sales
that she listed. He argued that those three sales were the only verified
rentals, and therefore likely the most comparable. And two of those sales, with
adjusted sale prices of $30,600 and $25,500, supported the subject property’s
current assessment. But the Respondent presented no evidence to show that the
two properties Ms. LeVeque excluded were somehow more comparable than the six
properties she chose to use in her appraisal, except to argue that the excluded
properties were the only “confirmed” rental properties in the appraisal.
Because it is well within an appraiser’s expertise to choose the sales he or
she deems most comparable to the subject property and apply adjustments to
those comparable properties to account for the differences between them,
without probative evidence to the contrary, the Board finds Ms. LeVeque’s
comparable properties and the adjustments she made to those properties to be
reasonable.
Further, Mr.
Agostino noted that many of Ms. LeVeque’s 136 sales were foreclosures and
sheriff sales. However, Mr. Agostino failed to present evidence that any of the
sales that Ms. LeVeque relied upon in her appraisal were sheriff sales or sales
that did not reflect the properties’ market values.
Ms. LeVeque’s
decision not to use the income approach to value the property even though she
determined the property’s highest and best use was as an income-producing
property raises questions about the reliability of her valuation. And her
choice to represent the Petitioner as a certified tax representative after
preparing a valuation opinion for the property raises concerns about her
credibility. But these are not the arguments that the Respondent’s counsel
raised in his case. In the end, while Mr. Agostino’s criticisms detract from
the credibility of the Petitioner’s appraiser’s valuation, he gave the Board
insufficient evidence to reject Ms. LeVeque’s value based on any assumptions
she made in reaching that value.
To the extent
that the Respondent argues that the Petitioner’s property was properly assessed
for 2007 based on the gross rent multiplier method of valuation, the Assessor
presented no evidence to support her use of a four-times multiplier or a $600
per month “market rent.” Statements that are unsupported by probative evidence
are conclusory and of little value to the Board in making its determination. Whitley
Products, Inc. v. State Board of Tax Commissioners, 704 N.E.2d 1113, 1119
(Ind. Tax Ct. 1998); and Herb v. State Board of Tax Commissioners, 656
N.E.2d 890, 893 (Ind. Tax Ct. 1995).
Similarly,
while the Respondent contends that the property was sold on contract in 2010
for a price that supports the property’s 2007 assessed value, the Respondent
failed to present any evidence of that sale. And, in fact, the Petitioner’s
representative testified that the sale was a private contract sale between the
Petitioner and the property’s tenant. Absent evidence that the sale price
represented the property’s market value-in-use, a non-arms’-length transaction,
such as the contract sale here, has little probative value. Moreover, the
property’s April 1, 2010, contract date is too far removed from the January 1,
2006, valuation date to be probative of the property’s value without more
evidence than Mr. Agostino’s argument that, because the assessed value of the
property did not change between 2007 and 2009, the Board should accept a 2010
sale as evidence of the property’s value in 2007.
