The Assessor relied on her analysis of four of the six sales
from Mr. Middaugh’s appraisal. She
adopted large portions of Mr. Middaugh’s analysis, including almost all of his
adjustments, but substituted her own methodology in other respects. The Assessor’s reliance on Mr. Middaugh’s
appraisal is surprising, given the various problems she identified with
it. Indeed, as the Assessor herself
pointed out, Mr. Middaugh estimated the value that the subject property would
bring in a sale where the seller is under duress and does not reasonably expose
the property to the market. That differs starkly from the market value-in-use
standard that real property assessments are based on, which presupposes
reasonable exposure in a competitive market with neither party to the sale
acting under duress. See 2011 Real
Property Assessment Manual 6 (defining “market value”); 2002 Real Property Assessment Manual 10. That departure – which appears to have been
at the request of Mr. Mills – is so fundamental that it deprives Mr. Middaugh’s
appraisal of any probative value.
Without further explanation from Mr. Middaugh, the Board cannot divorce
any of the other judgments contained in his appraisal from that flawed
valuation premise.
The Assessor’s analysis therefore rests on a weak
foundation. In addition, a valuation
opinion is not merely a mathematical calculation; it includes the exercise of
significant judgment. One cannot simply
plug new data into an expert’s analysis without the risk of seriously
distorting that analysis. And the
Assessor offered nothing to show that she took steps to avoid that risk. In any case, the Assessor offered little
support for the data that she used in making her independent condition
adjustments. For example, she simply
took her exterior condition adjustment from a report generated by www.costvsvalue.com without
explaining how the website compiled its information or whether assessors or
appraisers normally use it as a reliable data source. And she did not explain how she quantified
her adjustment for the interior condition of the upper floors. Thus, taken as a whole, the Assessor’s
valuation opinion lacks probative weight.
Because the Assessor failed to meet her burden of proof, the
subject property’s 2011 assessment must be reduced to the previous year’s level
of $209,100. But that does not end the
Board’s inquiry – the Millses asked for an assessment of $134,000, and they
have the burden of proving that they are entitled to that additional
reduction. The Board therefore turns to
the Millses’ evidence.
…
The Millses identified significant problems with their home,
most of which stem from deferred maintenance.
By itself, that deterioration does little to show the property’s market
value-in-use, or even a range of values.
The Millses therefore relied on Mr. Middaugh’s appraisal to supply that
evidence.
As explained above, however, Mr. Middaugh did not appraise
the property’s market value-in-use, or even its fair market value, but rather
its value if sold under duress without being reasonably exposed to the market. The appraisal therefore lacks probative value
and the Millses failed to prove that they are entitled to any further reduction
in the property’s assessment.
