The Rubys first contend their property’s assessment is excessive based on the fact that part of the property is swampy and unusable. Further, the Rubys contend their assessment is excessive because their house is older and smaller than others in their neighborhood. The Rubys however, did not present probative evidence to quantify the effect of those factors, nor otherwise explain how those factors led to a particular value. Thus, this part of the Rubys argument does little to help their case.
Nonetheless, the Rubys did offer Ms. Benson-Lochner’s appraisal report, in which she estimated the subject property’s market value-in-use at $260,000. Ms. Benson-Lochner certified that she performed her appraisal in conformity with USPAP, and she used two generally accepted appraisal approaches —the sales comparison approach and the cost approach —to arrive at her valuation opinion. Thus, Ms. Benson-Lochner’s valuation opinion is probative of the subject property’s market value-in-use as of her report’s effective date —April 16, 2009. But that effective date is more than 15 months after the January 1, 2008, valuation date for the March 1, 2009, assessment.
Because Ms. Benson-Lochner relied solely on sales from 2008 and did not adjust those sale prices to reflect time-related differences between the sales dates and her April 16, 2009, appraisal date; her valuation opinion bears at least some relationship to the subject property’s value as of January 1, 2008. Granted that relationship is not precise; however, the Department of Local Government Finance’s rules for annual adjustments that were in effect at the time relevant to this appeal instructed assessors to use sales from 2007 and 2008 in performing ratio studies for the March 1, 2009, assessment date. 50 IAC 21-3-3-(a)(2009) (“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.”) Further, because all of Ms. Benson-Lochner’s comparable sales were listed for sale on the open market for as few as 143 days to as many as 386 days before selling, they represent market activity around the subject property’s January 1, 2008, valuation date. Thus, Ms. Benson-Lochner’s valuation opinion bears enough of a relationship to the subject property’s value as of January 1, 2008, to make a prima facie case for reducing the property’s March 1, 2009, assessment.
Once the Petitioner establishes a prima facie case, 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 Court 2005).
In an attempt to impeach Ms. Benson-Lochner’s appraisal, the Respondent’s representative points to four things that she believes makes the appraisal unreliable: (1) only one of the comparables Ms. Benson-Lochner used was located on Lake Jimmerson; (2) the appraisal was prepared for the purpose of refinancing; (3) Ms. Benson-Lochner used only one sale to determine the site value in her cost approach; and (4) Ms. Benson-Lochner’s second comparable was neither an arm’s-length transaction nor was it an on-water tract.
As to the first point, the Respondent claimed that Ms. Benson-Lochner’s appraisal lacks credibility because only one of three comparables used in her sales comparison analysis is located on Jimmerson Lake. Furthermore, the Respondent argued that Ms. Benson-Lochner overlooked two sales on Jimmerson Lake. However, the Respondent failed to establish why the “overlooked” properties were more comparable to the subject property than the sales that Ms. Benson-Lochner—a certified appraiser who researched several sales before deciding which sales best compared to the subject parcel—used in her appraisal. While location is important, it is far from the only factor that affects a property’s market value-in-use. For example, both of the Respondent’s sales comparables included homes that were at least 34 years newer and more than 680 square feet larger, than the subject property. Finally, the Respondent failed to point to any USPAP requirement that Ms. Benson-Lochner only use comparables from the subject property’s neighborhood.
The Respondent likewise did not offer anything to support her second argument—that a USPAP appraisal performed for refinancing purposes is less credible than an appraisal prepared for other purposes, because it generally produces a lower value. The Respondent, in fact, failed to offer any evidence whatsoever to substantiate that claim.
Similarly, the Respondent failed to offer anything to support her argument that Ms. Benson-Lochner’s cost approach was less reliable because she used just a single land sale from Big Turkey Lake in determining the subject property’s site value. The Respondent did not offer competing calculation to either impeach Ms. Benson-Lochner’s conclusion, or support a different value. Regardless, Ms. Benson-Lochner stated in her appraisal that she relied little on the cost approach to value the subject property.
As to the Respondent’s fourth and final contention, the Respondent did not offer any evidence, or even any explanation, as to why she concluded that Ms. Benson-Lochner’s second comparable sale was not an arm’s-length transaction. Similarly, the Respondent did not offer an explanation or evidence showing how the selection of an off-water tract affected Ms. Benson-Lochner’s value conclusion. Further, in Ms. Benson-Lochner’s appraisal, she specifically listed the second comparable as having 81 feet of lake frontage and stated that it had been listed on the market for 341 days. Petitioner Exhibits 8-26. The Respondent did not offer any documentary evidence to disprove either of these statements.
The Respondent also attempted to rebut Ms. Benson-Lochner’s appraisal with a competing sales comparison analysis. More specifically, the Respondent’s representative purported to abstract the land value from two other sales, and then computed a base rate for the subject’s land by using the average of the two sales. However, she did little to explain how the properties involved in those two sales compared to the subject property, and nothing to explain how any differences may have affected the properties’ relative values. Thus, Mr. Olinger’s analysis was too superficial to be probative of the subject property’s market value-in-use. See Long v. Wayne Twp. Assessor, 821 N.E.2d 466, 471-72. (Ind. Tax Ct. 2005) (holding that sales data lacked probative value where taxpayers failed to explain how the characteristics of their property compared to the characteristics of purportedly comparable properties or how any differences between the properties affected their relative market values-in-use). That shortcoming becomes much more glaring here, where according to Respondent’s spreadsheet, one comparable sold for a 53% higher front-foot value than the other, even though they are nearly identical in size. Respondent Exhibit 2.
Even if the Respondent’s representative had computed a front-foot rate according to generally accepted appraisal principles, it would have meant little by itself in proving the value of the entire property. Ms. Olinger completely ignored any comparison, or even acknowledgment, of the improvements in her sales comparison approach. As such, her analysis is insufficient to rebut the valuation estimate of a certified appraiser.
