The most effective method to show
the correct value for a property is often through the presentation of a market
value-in-use appraisal, completed in conformance with the Uniform Standards of
Professional Appraisal Practice (USPAP). See O’Donnell, 854 N.E.2d at 94
n. 3; Kooshtard Property VI, LLC v. White River Twp. Assessor, 836
N.E.2d 501, 506 n. 6 (Ind. Tax Ct. 2005). In this particular case, the subject
property was appraised for $500,000 as of January 11, 2011. This appraised
value (based on the appraiser’s opinion that the house was 74% complete) is
very close to the disputed assessed value, which was $501,400. Neither party,
however, related that value to the required valuation dates. Therefore, this
appraisal does not prove a relevant value for the 2008 and 2009 assessments. Long,
821 N.E.2d at 471.
Nevertheless, the appraisal’s
description of the unfinished home as of January 2011 is relevant because we
conclude that the unfinished items in 2011 were also unfinished in 2008 and
2009. The Supplemental Addendum with the appraisal states:
The brick veneer is unfinished at
the front entrance to the home. The front soffit, facia and roof returns are
unfinished at the front of the home. There is no guttering on the home. There
are no porches or sidewalks around the home. The second floor exterior doors
are a safety hazard due to no porches or safety bars on these exits. The
exterior trim is unfinished around the overhead garage doors. The drywall is
unfinished in the ceilings of the bay windows in the living room and family
room. The stair casing in the foyer is unfinished with no railing or balusters
on the stairs or along the second floor hallway. This is also a safety hazard.
There are no light fixtures in most of the home. The utility room/mudroom and
main floor half bathroom features a tile floor that has not been grouted. There
are no interior doors in most of the home leaving unfinished casings.
There is no interior trim in most
of the home. The master bathroom has no door, no trim work, no cabinetry, door,
or finished plumbing—only rough plumbing. The hall bathroom on the second floor
has no trim work, cabinetry, door, or finished plumbing. The bonus room has
unfinished drywall and no finished floor covering. There is unfinished hardwood
flooring in the second floor hall and two bedrooms. There is no water heater in
the home. Based on the construction inspection within this report, it is
determined that the subject property is 74.5% complete as of the day of this
inspection.
It is possible that this list
might have been even longer in 2008 or 2009, but the Board will not speculate
on that point.
The evidence submitted by
both parties clearly indicates construction of the house was only partially
completed in 2008 and 2009 and at some point it stopped. Litigation between the
Petitioners and the contractor was mentioned, but no documentation and no details
about it were provided as evidence in this case. According to the Sims
statement, construction was 50% complete in July 2008. According to the
appraisal it was 74% complete in January 2011. Regardless of the exact
percentage of completion at that time, the notation on the property record card
that the dwelling was 100% complete effective March 1, 2007, is erroneous.
Furthermore, Assessor Gleeson’s testimony confirms that the home was assessed
as if it were 100% complete for both 2008 and 2009 because a homestead
exemption was filed for 2008 and subsequent years. But she provided no authority
to support that conclusion and the Board finds no substantial reason to link filing
a homestead exemption with the conclusion that construction was 100% complete. Nevertheless,
mistakenly identifying the house as 100% complete is only a tangential point.
To successfully make their
case, the Petitioners were required to offer substantial, probative evidence
regarding the actual market value-in-use of the subject property. O’Donnell,
854 N.E.2d at 95; Eckerling v. Wayne Twp. Assessor, 841 N. E. 2d764, 768
(Ind. Tax Ct.). See also Ind. Admin. Code tit. 50, r.2.3-1-1(d) (explaining
that failure to comply with the Guidelines does not in itself show that the
assessment is not a reasonable measure of true tax value).3 In other words, the
Petitioners needed to present market based evidence that the assessed value
does not accurately reflect the property’s market value-in-use. And here the
Petitioners presented no market evidence that the assessment is not a
reasonable measure of true tax value.
Although it was not
specifically stated, the underlying premise of the Petitioners’ case appears to
be that until construction of the house was completed it had no value. The Petitioners
provided no authority or meaningful argument in support of that position, which
is fundamentally flawed. While the incomplete aspects of the construction undoubtedly
have some effect on valuation, it is also clear that a significant amount of
the house had been built and had value—$500,000 as 74% complete in 2011. The Petitioners’
whole case is based on unsupported, conclusory statements that the partially completed
construction has no value or is “unmarketable” and those statements simply lack
credibility. Such conclusory statements do nothing to establish the property’s
actual market value-in-use and they are of no probative value. Whitley
Products, Inc. v. State Bd. of Tax Comm’rs, 704 N.E.2d 1113, 1119 (Ind. Tax
Ct. 1998).
The Petitioners failed to
make a prima facie case. Therefore, the Respondent’s duty to support the
assessment with substantial evidence was not triggered. Lacy Diversified Indus.
v. Dep’t of Local Gov’t Fin., 799 N.E.2d 1215, 1221-1222 (Ind. Tax Ct.
2003).
