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.