The GRM is the preferred method
for valuing rental properties with fewer than four units. Ind. Code §
6-1.1-1-4-39(b). The Petitioner contends the properties’ values should be lowered
based on their current rental rates. The Petitioner wants the GRM for the appropriate
areas to be applied to the actual rents.
44. The Petitioner presented the
leases for the properties under appeal, but did not provide any calculation or
analysis showing the market values of the properties based on GRM. Further, the
Petitioner used actual rents, but failed to show those rents are consistent
with similar properties. Indiana MCH, LLC v. Scott County Assessor, 987
N.E.2d 1182, 1185-6 (Ind. Tax Ct. 2013). It is necessary to consider data from
other comparable properties in order to protect against distortions and
inaccurate value estimates that might be caused by extraneous factors (such as
bad management or poor business decisions) that have nothing to do with the
inherent value of a property. Id. at 1184.
45. The Petitioner questioned the
Respondent’s choice of comparable properties and the adjustments she made in
her sales comparison analyses. But, the Petitioner failed to offer alternate
analyses or submit calculations of their own to establish values. In fact,
other than criticize the Respondent’s sales comparison analyses, the Petitioner
offered no probative evidence suggesting what the correct assessment should be.
A petitioner seeking review of a determination of an assessing official has the
burden to establish a prima facie case proving that the current assessment is
incorrect, and specifically what the correct assessment would be. See
Meridian Towers East & West v. Washington Township Assessor, 805 N.E.2d
475, 478 (Ind. Tax Ct. 2003); see also, Clark v. State Board of Tax
Commissioners, 694 N.E.2d 1230 (Ind. Tax Ct. 1998).
46. Based on the lack of
probative evidence, the Petitioner failed to establish a prima facie case for a
reduction in the assessed values for 1323 Shining Armor Lane, 1418 Shining Armor
Lane, 3878 Chenango Place, and 3914 Chenango Place. Therefore, the Respondent’s
duty to support these assessments with substantial evidence was not triggered. Lacy
Diversified Indus. LTD v. Dep’t of Local Gov’t Fin., 799 N.E.2d 1215, 1221-1222
(Ind. Tax Ct. 2001). The Respondent, however, assumed the burden of proof for
the remaining two properties, 3901 Chenango Place and 3922 Chenango Place.
3901 CHENANGO (PARCEL
79-06-02-228-004.000-023)
47. The Respondent had the burden
of proof to prove that the assessment for 3901 Place was correct, and failed to
meet this burden with probative evidence. The Respondent developed a value based
on the income approach using the GRM. Indiana Code section 6-1.1-4-30(b) states
“[t]he gross rent multiplier is the preferred method of valuing: (1) real
property that has at least one (1) and not more than four (4) rental units; and
(2) mobile homes assessed under IC 6-1.1-7.”
48. The Respondent presented a
list of properties used to establish the GRM for 2009 and testified that there
was no change to the GRM in the area for 2010. Respondent Exhibit C-1.
The Respondent also prepared a spreadsheet of rental properties in the subject
area showing the 2010 median market rent at $900. Respondent Exhibit C-3.
Applying the GRM of 9.63 to the annual market rent of $10,800, the Assessor
arrived at an assessed value of $104,000. Respondent Exhibit 3. However,
with no explanation, the PTABOA made a determination of $98,100 based on market
rent and a GRM of 8.93. Phillips’ testimony.
49. The Assessor relied on the
spreadsheet she created of rental properties in the subject area to show the
2010 median market rent at $900. Respondent Exhibit C-3. However, there is
no evidence that simply finding a median rent complies with generally accepted accounting
principles for determining what market rent is for purposes of determining GRM.
To draw any valid conclusions from the spreadsheet of rental properties in Respondent
Exhibit C-3, the Assessor needs to have provided a more detailed analysis of the
properties.
50. Based on the evidence
presented by the Respondent, the Board finds that the Assessor did not met her
burden for 3901 Chenango.
51. The Board finds for 2010, the
property should be assessed at the original 2009 assessed value of $94,700.
3922 CHENANGO (PARCEL
79-06-02-227-023.000-023)
52. The Respondent had the burden
of proof to prove that the assessment for 3922 Chenango Place was correct, but failed to
meet this burden with probative evidence. The Respondent presented a sales
comparison analysis based on four sales in the same area attempting to show the
assessed value for the subject property. Respondent Exhibit 2.
The Respondent purportedly
compared the properties by explaining the similarities and the differences.
Based on that analysis, the Respondent calculated a median adjusted sale price
of $119,250 and noted the subject property is assessed at $119,000. While the attempt
to compare the properties was a step in the right direction, it was not
sufficiently detailed or complete to form any legitimate conclusions about the
relative values of the properties. Furthermore, the Respondent failed to
establish that drawing any conclusion about the subject property based on the
median values of the purported comparables actually satisfies generally
accepted appraisal principles. Therefore, this part of the Respondent’s case is
not sufficient to support the existing assessed value of this property.
53. The Respondent also presented
a calculation using the GRM. Applying a GRM of 9.63 to the annual market rent
of $10,800 resulted in a value of $104,000. Respondent Exhibit 3. The
Respondent testified that the PTABOA used a market rent of $1,025 and a GRM of 8.93,
resulting in a value of $119,000. The record, however, does not support the conclusion
that market rent for this property is $1,025. And it remains unclear whether a correct
GRM factor is 9.63 or 8.93. Therefore, the Respondent failed to support the existing
assessed value for this property using GRM calculations.
54. The Petitioner’s duty to
rebut the evidence was not triggered. The 2010 assessed value must be reduced
to the previous year’s assessed value of $109,800. That conclusion, however,
does not end the Board’s inquiry. The Petitioner requested an assessment of $96,444
on the Form 131. It has the burden of proving it is entitled to that additional
reduction.
55. The Petitioner did not prove
a lower value for 3922 Chenango Place. The Board finds for 2010, the property
should be assessed at $109,800.
http://www.in.gov/ibtr/files/Lafayette_Rentals_Inc_79-023-10-1-5-00001_etc.pdf
