Here, the Respondent’s
representative contends that the subject property was properly valued for 2007
based on the sales of comparable properties. Respondent Exhibits A and B.
In making this argument, Mr. Metz 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,
821 N.E.2d at 470. 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 his contention, Mr.
Metz submitted “iDox sales information” for properties in Griffith,
Merrillville and Gary that sold in 2005. Mr. Metz also presented MLS sales information
for sales in Gary and Griffith that occurred in 2005 and 2006. Mr. Metz testified
that the subject property was valued in the range of these sales. Mr. Metz, however,
made no attempt to show how the properties were similar or how the properties differed;
he only showed that they were all vacant land sales. 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 sales presented by the
Respondent’s representative ranged from $100 to $155,000 – which suggests that
the properties differed substantially. The Board, therefore, finds that the Respondent
failed to raise a prima facie case that the Petitioner’s property was correctly
valued for the 2007 assessment year.
Because the Respondent failed to
raise a prima facie case, the property’s 2007 assessment must be reduced to the
previous year’s assessed value of $14,200 under Indiana Code § 6-1.1-15-17.2.
The Petitioner, however, requested an assessed value of $5,000 for the 2007
assessment year. As explained above, the Petitioner has the burden of proving
that he is entitled to any additional reduction. The Board therefore turns to
Mr. Sullivan’s evidence.
The Petitioner contends that the
subject property’s value for the 2007 assessment year should have been $5,000. Sullivan
testimony. In support of this contention, Mr. Sullivan submitted an
appraisal prepared by Thomas J. Serratore that estimated the value of the property
to be $5,000 as of May 4, 2011. Attachment to Board Exhibit A. The
appraiser attested that he prepared the appraisal in accordance with the
Uniform Standards of Professional Appraisal Practice (USPAP). Id. An
appraisal performed in conformance with generally recognized appraisal
principles is often enough to establish a prima facie case that a property’s
assessment is incorrect. See Meridian Towers, 805 N.E.2d at 479.
Here, however, the appraisal
valued the Petitioner’s property more than five years after the relevant
valuation date. Neither the appraiser, nor Mr. Sullivan, attempted to explain how
the appraisal related to the subject property’s market value-in-use as of
January 1, 2006. The appraisal therefore lacks probative value. See Long 821
N.E.2d at 471 (holding that an appraisal that estimated a property’s value for
December 10, 2003, lacked probative value in an appeal from a 2002 assessment).
Mr. Sullivan also contends that
several issues negatively affect his property’s value. According to Mr.
Sullivan, his property is smaller now than it had previously been because the
government took a portion of it in order to widen the road. Mr. Sullivan, however,
did not present any evidence indicating when the government took a portion of his
property; nor did he present any evidence that the taking affected the use of the
remainder of the property.
Mr. Sullivan also contends that
the construction of a church on an adjacent lot negatively affected his
property because his land is now lower than the church property and it would require
fill in order to build on it. Further, Mr. Sullivan contends the subject
property’s neighborhood is in decline. But while Mr. Sullivan testified these
conditions “negatively impacted” the market value of the property under appeal,
he presented little evidence of the property’s market value-in-use as of the
March 1, 2007, assessment date.
Finally, Mr. Sullivan presented a
settlement agreement with the Department of Local Government Finance for the
March 1, 2002, assessment date, valuing the subject property at $5,000.
However, that agreement is not probative evidence that future assessments should
be $5,000 for the property. First, each assessment and each tax year stand
alone. Fleet Supply, Inc. v. State Bd. of Tax Comm’rs, 747 N.E.2d 645,
650 (Ind. Tax Ct. 2001) (citing Glass Wholesalers, Inc. v. State Bd. of Tax
Comm’rs, 568 N.E.2d 1116, 1124 (Ind. Tax Ct. 1991)). Thus, evidence as to a
property’s assessment in one tax year is not probative of its true tax value in
a different tax year. See, Id. More importantly, the 2002 value was based
on an agreement reached with the Department of Local Government Finance
settling the Petitioner’s 2002 appeal. Indiana’s Supreme Court has held that “[t]he law encourages parties to engage in
settlement negotiations in several ways. It prohibits the use of settlement
terms or even settlement negotiations to prove liability for or invalidity of a
claim or its amount.” Dep’t of Local Gov’t Fin. v. Commonwealth Edison Co.,
820 N.E.2d 1222, 1227 (Ind. 2005). The strong policy justification for denying
settlements precedential effect in a property tax case is that allowing parties
to use the settlement would have a chilling effect on the incentive of the
parties to resolve cases outside of the courtroom. Id. at 1228. Thus,
the Petitioner failed to prove that his assessment for the March 1, 2007,
assessment year should based on its negotiated 2002 assessed value.
http://www.in.gov/ibtr/files/Sullivan_45-001-07-1-5-00012.pdf
