Mr. Young relied primarily on an
appraisal report in which Mr. Tarter estimated the subject property’s value at
$50,000 as of December 2, 2010. Mr. Tarter certified that he prepared his appraisal
in conformance with USPAP, and he used a generally accepted appraisal
methodology—the sales-comparison approach—to arrive at his value estimate.
Thus, at first blush, Mr. Tartar’s appraisal report appears to raise a prima
facie case for changing the subject property’s assessment.
The Assessor, however, pointed to
serious problems with Mr. Tarter’s appraisal that ultimately deprive it of
probative value. First and foremost, Mr. Tarter’s opinion is almost entirely
conclusory. The sales-comparison approach contemplates that an appraiser will
compare the characteristics of the property being appraised to those of properties
that have sold in the market and account for any relevant ways in which the
properties differ. See Long v. Wayne Twp. Assessor, 821 N.E.2d 466, 471
(Ind. Tax Ct. 2005) (holding that taxpayers failed to make a prima facie case
where they did not explain how their property compared to their purportedly
comparable properties or how any relevant differences affect the properties’
relative values). An appraiser may account for those differences through
quantitative adjustments or qualitative analysis or a combination of the two,
but he must account for them.
Here, Mr. Tarter gave scant
information about his purportedly comparable properties beyond attaching some
photographs of the properties to his report and listing their sale prices. And
he did not explain whether he adjusted the sale prices to account for any
relevant differences between those purportedly comparable properties and the subject
property. Mr. Tarter instead simply asserted that based on those sales, he estimated
the subject property’s value at $50,000 as of December 2, 2010. Had Mr. Tarter
testified at the Board’s hearing, he might have shed further light on his sales
comparison analysis. As it is, however, the Board has only his conclusory
written report.
And Mr. Tarter did not check his
conclusions under the sales-comparison approach by applying either of the other
two generally accepted appraisal methodologies. While his explanation for
deciding not to apply the cost approach—that depreciation would be difficult to
estimate—makes sense, the same cannot be said for his decision to forego the
income approach. Mr. Tarter grounded that decision on his claim that the area
around the subject property consists mostly of owner-occupied homes, a claim
that is contradicted by Mr. Ward’s testimony and by the photographs that Mr. Young
offered. Indeed, the property is located amid mostly other commercial buildings
that, like the subject property, are used to generate income. And as Mr. Ward
persuasively explained, potential buyers would likely consider the subject property’s
ability to generate income in deciding how much to pay for the property.
Also, as Mr. Ward pointed out,
Mr. Tarter’s appraisal report has various factual inaccuracies, such as his
failure to include a significant portion of the subject building in his sketch,
and his inaccurate descriptions of the area surrounding the subject property.
Mr. Young attributed those errors to simple oversights or guesswork by Mr. Tarter
that did not significantly affect his valuation opinion. But the conclusory nature
of Mr. Tarter’s written valuation opinion makes it impossible for the Board to determine
what, if any, effect the errors had on that opinion. Given the combination of
the problems with Mr. Tarter’s written appraisal report, the valuation opinion expressed
in that report carries no probative weight.
Mr. Young also pointed to two
other properties that did not generate any offers when they were listed for
sale at $75,000 and $70,000, respectively. Aside from providing exterior
photographs of the two buildings, however, Mr. Tarter did not meaningfully compare
those properties to the subject property or explain how any relevant differences
affected their relative market values-in-use. That listing data therefore lacks
probative value. Mr. Young’s attempt to compare the subject property’s assessment
to the assessments of four nearby properties fails for the same reasons. Other
than offering exterior photographs and testifying that the properties are similarly
located, Mr. Young did little to compare those four properties to the subject property.
Finally, Mr. Young pointed to the
fact that the Assessor reduced the subject property’s total assessment for
March 1, 2011 after combining the two parcels. But each assessment and each tax
year stands alone. Fleet Supply, Inc. v. State Board of Tax Commissioners, 747
N.E.2d 645, 650 (Ind. Tax Ct. 2001) (citing Glass Wholesalers, Inc. v. State
Board of Tax Commissioners, 568 N.E.2d 1116, 1124 (Ind. Tax Ct. 1991)).
Thus, evidence about a property’s assessment in one tax year generally is not
probative of its true tax value in a different tax year. There are various
reasons why a property’s value might change from one year to the next, and Mr.
Young had the burden of proving that the assessment for the year under appeal was
wrong. As already explained, he failed to meet that burden.
