The Assessor claims that the
Prossers lack standing to appeal the property’s March 1, 2010 assessment
because they did not own the property on that assessment date. Under the
Board’s regulations, a “[p]arty” includes the “(1) the owner of the subject
property[, or] (2) [t]he taxpayer responsible for the property taxes payable on
the subject property….” 52 IAC 2-2-13. Thus, the fact that the Prossers did not
own the subject property on March 1, 2010, does not automatically deprive them
of standing to appeal from that year’s assessment. Indeed, the Prossers offered
a statement from their purchase of the subject property showing that they were
responsible for taxes that were based on the March 1, 2010 assessment, although
they received a credit from the seller for a portion of those taxes. See
Pet’rs Ex. 3. The Prossers therefore had standing to appeal from the
property’s March 1, 2010 assessment.
...
The
Prossers rely solely on the fact that they bought the subject property for
$175,000. A property’s sale price can be the best evidence of its value. See
Hubler Realty Co. v. Hendricks County Assessor, 938 N.E.2d 311, 315 (Ind.
Tax Ct. 2010) (finding that the Board’s determination assigning greater weight
to the property’s purchase price than its appraised value was proper and
supported by the evidence). But that presumes that the sale is an arm’s-length
transaction and that other indicia of a market-value sale were present. Those
indicia are found in the Manual’s definition of market value:
The most
probable price (in terms of money) which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the
buyer and seller each acting prudently and knowledgably, and assuming the price
is not affected by undue stimulus. Implicit in this definition is the
consummation of a sale as of a specified date and the passing of title from
seller to buyer under conditions whereby:
o The buyer and seller are typically motivated;
o Both parties are well informed or advised and act in
what they consider their best interests; o A reasonable time is allowed for exposure in the open market;
o Payment is made in terms of cash or in terms of financial arrangements comparable thereto;
o The price is unaffected by special financing or concessions.
MANUAL at 10.
Here, the
Assessor claimed that two different indicia of a market value sale were
missing: (1) the sale was not at arm’s length because the sellers were
neighbors of the Prossers and therefore presumably were not typically
motivated, and (2) the property was not exposed to the market. The Prossers
allayed concerns about the parties’ motivation by offering a signed statement
from the sellers indicating that they were not under any duress or coercion and
that they wanted to get a fair price for the property.
But the
Prossers offered nothing to address the property’s lack of exposure to the
market. The Assessor testified, albeit in a summary fashion, that the seller
did not market the property. And the Prossers did not offer any evidence to
dispute that fact. Thus, there is no evidence in the record to show that the
sellers marketed the property or that they otherwise attempted to solicit
offers from anyone but the Prossers. The lack of evidence regarding market
exposure is a significant problem, particularly where the property at issue is
of the type that normally would be actively marketed, whether through a realtor
or through other means.
That does
not mean that the subject property’s sale price is irrelevant. To the contrary,
had the Prossers offered some evidence to show that, consistent with generally
accepted appraisal principles, the sale price could be adjusted to account for
the lack of market exposure, or that other evidence supports using the
unadjusted price as a valid indicator of the property’s market value-in-use
despite the lack of exposure, the Board might reach a different conclusion.
Under these circumstances, however, the sale price does not show the subject
property’s market value-in-use or even a likely range of values.
