Here,
the Petitioners’ representative argued that the Petitioners’ land was
over-valued for 2010 and 2011 based on the sales of other properties on the
Lake of the Woods. In making this argument, the Petitioners’ representative
essentially relies on a sales comparison approach to establish the market
value-in-use of the property. See MANUAL at 3 (stating that the sales
comparison approach “estimates the total value of the property directly by
comparing it to similar, or comparable, properties that have sold in the
market.”) In order to effectively use the sales comparison approach as evidence
in a property assessment appeal, however, the proponent must establish the
comparability of the properties being examined. Conclusory statements that a
property is “similar” or “comparable” to another property do not constitute
probative evidence of the comparability of the two properties. Long v. Wayne
Township Assessor, 821 N.E.2d 466, 470 (Ind. Tax Ct. 2005). Instead, the
proponent must identify the characteristics of the subject property and explain
how those characteristics compare to the characteristics of the purportedly
comparable properties. Id. at 471. Similarly, the proponent must explain
how any differences between the properties affect their relative market
values-in-use. Id.
In
support of her argument, Ms. LeVeque submitted sales and cost information for
thirteen waterfront properties that sold between July 2002 and July 2012. For
the improved properties, Ms. LeVeque calculated the cost of the improvements
using the 2012 Craftsman cost estimator and abstracted the improvement value
from the sales price to arrive at the market value of the land for each
property, resulting in front foot values that ranged from $1 to $2,489. Based
on the sales, the Petitioners’ representative contends the subject property’s
land should be valued at $1,650 a front foot, resulting in an assessed value of
$135,300 for the land for 2010 and 2011.
The
Petitioners’ representative, however, made no attempt to show how the
properties were similar or how the properties differed. Ms. LeVeque only
testified that her sales were all lake-front properties. But whether properties
are similar enough to be considered “comparable” depends on a number of factors
including the size, shape, topography, accessibility and use of the properties.
See Beyer v. State, 280 N.E.2d 604, 607 (Ind. 1972) (“One need only
examine the multitudinous factors which make separate tracts of land similar or
dissimilar to realize that the variation in the character of land is limitless.
No two tracts of land are identical”). And in fact the Petitioners’
representative calculated front foot values ranging from $1 to $2,489 – which
suggests that the properties differed substantially. Nor did Ms. LeVeque offer
support for her conclusion that the subject property’s land should be valued at
$1,650 a front foot based on sales that ranged from $1 to $2,489 per front
foot.
Even
if Ms. LeVeque had sufficiently shown that her sales were comparable to the
subject property, the method she used to extract the land value from the sales
price had little credibility or reliability. First, Ms. LeVeque applied 2012
cost tables to sales that occurred up to ten years earlier – which over-stated
the improvement values and, in return, underestimated the land values on her
comparable sales. Moreover, the amount of depreciation Ms. LeVeque applied to
the various sales was inconsistent throughout her entire presentation. For
example, the property at 3608 West Shore Drive was 51 years old as of 2012, and
Ms. LeVeque applied 59.5% depreciation; whereas the property at 4215 Lake Shore
Drive, which was 62 years old and has the same grade and condition according to
the properties’ property record cards, was given a 50% depreciation.
In
addition, Ms. LeVeque’s analysis erred on several specific sales. For example,
the property located at 4016 Liberty Street sold on January 24, 2008, for
$230,000. According to the Petitioners’ representative, this sale involved
three parcels: Parcel No. 50-43-07-000-025.000-005, Parcel No.
50-43-07-000-026.000-005 and Parcel No. 50-43-07-000-027.000-005. But the sale
did not actually include 50-43-07-000-025.000-005. According to the sales
disclosure form, the three parcels sold were Parcel No.
50-43-07-000-026.000-005, Parcel No. 50-43-07-000-027.000-005 and Parcel No.
50-43-07-000-033.000-005. Parcel No. 50-43-07-000-033.000-005 is only 20 feet
by 23 feet, which is significantly smaller than the 33 feet by 80 feet size of
Parcel No. 50-43-07-000-025.000-005. Thus, Ms. LeVeque’s inclusion of Parcel
No. 50-43-07-000-025.000-005 significantly over-estimated the size of the land,
which then underestimated the price per front foot or price per square foot
value of the property.
Similarly,
according to the Petitioners’ representative, the sale of 4215 Lake Shore Drive
was comprised of three parcels: Parcel No. 50-43-07-000-201.000-005, Parcel No.
50-43-07-000-202.000-005 and Parcel No. 50-43-07-000-251.000-005. Petitioner
Exhibits 12 and 15. However, the sales disclosure form shows that the sale
was only for two parcels. Respondent Exhibit 12 (2010). Parcel
50-43-07-000-251.000-005 was not part of that sale, but sold separately for
$20,900 on the same date, October 8, 2009. And when she abstracted the
improvements from the sale price, Ms. LeVeque calculated the depreciated cost
of improvements to be $78,088 on Exhibit 12, but used $87,000 on Exhibit 15.
Finally,
Ms. LeVeque used sales that were too remote in time to be probative. For
example, she presented several sales that occurred between 2002 and 2006.
However, she failed to relate those sales to the relevant valuation dates for
the 2010 or 2011 assessment dates.
Here
the Petitioners’ representative failed to discuss how the properties she
submitted as comparable sales were similar to the subject property or how they
differed. The Petitioners’ evidence did little to quantitatively or
qualitatively show how the differences between the properties affected their
relative values. Furthermore, the Petitioners’ evidence lacked credibility
based on the method Ms. LeVeque used to abstract the land value and the number
of errors in her data. The Board therefore finds that the Petitioners failed to
raise a prima facie case that their property was over-valued for the 2010 or
the 2011 assessment years.
http://www.in.gov/ibtr/files/Harris_50-005-10-1-5-00017_and_11-00017A.pdf
