37. In this case, the Petitioner submitted an appraisal. An
appraisal completed in conformance with USPAP is often the most effective
method to rebut the presumption that an assessment is correct. O’Donnell v.
Dep’t of Local Gov’t Fin., 854 N.E.2d 90, 94 (Ind. Tax Ct. 2006); Kooshtard
Property VI, LLC v. White River Township Assessor, 836 N.E.2d 501, 506 n. 6
(Ind. Tax Ct. 2005). The appraisal was prepared by a licensed appraiser, who
concluded that as of March 1, 2011, and March 1, 2012, the market value of the
subject property was $650,000. Ms. Coers’ appraisal of the subject property is substantial,
probative evidence that supports the Petitioner’s claim for an assessment of $650,000
for both assessment years.
38. Ms. Coers presented and explained the appraisal she
performed for the Petitioner. She concluded that the income approach to value
is the best method to determine the market value for the subject property. The
participants in the subject’s market would focus on income stream and return on
investment.
39. Ms. Coers indentified two issues with the property being
appraised. One was the lower than market rents and the other being the higher
than market vacancy rate. Her analysis of the local market, local demographics
and trends, and the supply and demand factors faced by the subject property
sufficiently explain the property’s inability to obtain higher rents or achieve
a better occupancy rate.
40. Ms. Coers prepared an income analysis using the
property’s actual income, expenses and vacancy rate, which she compared to
other properties to determine whether they were reasonable in terms of market
value. Ms. Coers developed her capitalization rate based on sales of other
mobile home parks and also on capitalization rates for mobile home parks
published in a national market publication.
41. The Respondent attempted to impeach the Petitioner’s
appraisal. The Respondent argued that the appraisal based the subject
property’s value on a fee simple interest and not on a leased fee interest. Ms.
Coers explained in the case of the subject property the opinion of value would
be the same regardless of which property rights were considered because the interest
transferred is not relevant. The leases are short-term leases.
42. The Respondent took issue with the fact the appraisal
states the total acreage of the subject property is 24.65928 at one place and
23.8628 at another place. Respondent Ex. 3, the property record card, also
shows both measurements for the subject property. The Respondent failed to
demonstrate how, or if, this issue would affect the final opinion of value.
43. The Respondent attempted to impeach the appraisal for
several other reasons: because the comparables used to check for the
reasonableness of the expenses were confidential; because the Petitioner’s
appraiser failed to develop typical vacancy rates for properties in the
subject’s market; and because capitalization rates from national surveys are
not relevant. But the Respondent failed to develop these points in a meaningful
way. And consequently, they have little or no impact on the Board’s final
determination—these purported weaknesses did not entirely destroy the
credibility of the appraisal.
44. The Respondent presented a sales disclosure showing the
Petitioner purchased the subject property for $1,750,000 in 2006. Respondent
asserts that the sales disclosure demonstrates the property was sold under
normal market circumstances. Respondent made no attempt to relate this 2006
sale to the valuation dates currently under appeal. The sale does not indicate
the subject property’s market value as of March 1, 2011, or March 1, 2012, and
is not probative evidence for this case.
45. The Respondent attempted to support the assessments
under appeal by using a portion of the sales data presented in the Petitioner’s
appraisal. The Respondent’s analysis used the median sale price of the five
comparable properties found in Ms. Coers’ appraisal at page 52. According to
Mr. Davis, he used the median because it minimizes the effects of outliers.
Respondent asserts that the cost of $15,416 per pad results in a value of $2,019,496
for the 131 pads of the subject property. This value times the 60% occupancy rate
equals $1,211,698. Respondent contends this calculation supports the
assessments for both 2011 and 2012, but the Respondent failed to prove that
this methodology conforms to generally accepted appraisal principles.
…
47. In this case, substantially more weight is given to the
Petitioner’s appraisal than to the Respondent’s approach of selecting one sale
from the appraisal and selecting the median sale price to support the
assessment of the subject property. Petitioner made a case for a reduction in
value for 2011 to $650,000.
48. The Respondent had the burden of proof for 2012 because
the assessment increased from $650,000 in 2011 to $1,209,900 in 2012. The
increase is more than five percent (5%). IC § 6-1.1-15-17.2.
49. The Respondent failed to provide the Board with a
detailed explanation or analysis as to how her purportedly comparable
properties specifically compare to the subject property pursuant to accepted
appraisal practices. The Respondent failed to make a prima facie case proving
the 2012 assessment is correct. Thus, the assessment of the subject property for
2012 must be reduced to the previous year’s amount.
