Wednesday, September 11, 2013

Board Finds Assessor with Burden Failed to Support Assessed Value of Property


The Assessor assessed the subject property for $83,900 in 2009. For 2010, the PTABOA determined the property’s assessment at $95,600—an increase of more than 5%. The Assessor therefore has the burden of proving that the 2010, assessment was correct. To the extent that the Speakmans seek an assessment below the previous year’s level, however, they bear the burden of proving that lower value.

The Assessor relied on Mr. Wallenfang’s analysis of five sales from the Speakmans’ neighborhood. The sales-comparison approach is a generally accepted appraisal method that “estimates the total value of [a given] property directly by comparing it to similar, or comparable, properties that have sold in the market.” MANUAL at 3. In order to use a sales-comparison analysis as evidence in an assessment appeal, however, one must show that the properties on which that analysis is based are truly comparable to the property under appeal. Conclusory statements that a property is “similar” or “comparable” to another property do not suffice. Long v. Wayne Township Assessor, 821 N.E.2d 466, 471 (Ind. Tax Ct. 2005). Instead, one must identify the appealed property’s characteristics and explain how those characteristics compare to the characteristics of the sold properties. Id. at 471. Similarly, one must explain how any relevant differences affect the properties’ relative market values-in-use. Id.

Although Mr. Wallenfang compared the five sold properties to the subject property along several lines, he did not address how relevant differences affected the relative values. For example, he neither quantitatively adjusted, nor qualitatively analyzed, the comparable properties’ sale prices to account for those differences. At most, Mr. Wallenfang simply pointed out that the subject property was assessed for less than the other properties’ median sale price per square foot of living area. Without some explanation showing that such an analysis complies with generally accepted appraisal principles, the Board will not assume that it does.

Because the Assessor failed to meet her burden of proof, the 2010 assessment must be reduced to the previous year’s level of $83,900. That, however, does not end the Board’s inquiry. The Speakmans asked for an assessment of $78,000. And they have the burden of proving that they are entitled to that additional reduction. The Board therefore turns to the Speakmans’ evidence.

Pearl Speakman testified that two banks believed the subject property was worth no more than $78,000. But he offered nothing to show how either bank arrived at that number. Those valuation opinions are therefore entirely conclusory and carry no probative weight.

The Speakmans attached to their Form 131 petition copies of what appear to be portions of three pages from a six-page appraisal report estimating the subject property’s value at $78,000. See Bd. Ex. A. But the Speakmans did not offer those documents, or even refer to them, at the Board’s hearing. Even if those documents were in evidence, the Board would give little or no weight to an appraisal report that is missing key parts. In any case, the appraisal report estimated the subject property’s value as of December 27, 2011—more than 21 months after the relevant valuation date of March 1, 2010. And the Speakmans did not explain how the report related to the subject property’s value as of that relevant valuation date. See Long, 821 N.E.2d at 471 (finding that taxpayers’ evidence lacked probative value where they did not explain how it related to their property’s market value-in-use as of the relevant valuation date).

Mr. Speakman also pointed to various problems with the neighborhood. While some of those problems might have affected the market for their property, the Speakmans offered no probative evidence from which to quantify that effect or to otherwise show a value, or even a likely range of values, for it. Mr. Speakman did at least point to the sale of a nearby income-producing duplex. But he did even less to compare that property to the subject property than Mr. Wallenfang did for the five purportedly comparable properties in his sales-comparison analysis. The duplex’s sale price therefore lacks probative value.

Finally, the Speakmans contend that they should receive a credit for the previous 15 years in which their home was incorrectly assessed as having a full basement. Those previous years’ assessments, however, are not before the Board in this appeal.