Here, the Petitioners’ representative argued that the Petitioners’ land was over-valued for 2010 and 2011 based on her comparable sales analysis. In making this argument, the Petitioners’ representative essentially relies on a sales comparison approach to establish the market value-in-use of the property. See MANUAL at 3 (stating that the sales comparison approach “estimates the total value of the property directly by comparing it to similar, or comparable, properties that have sold in the market.”) In order to effectively use the sales comparison approach as evidence in a property assessment appeal, however, the proponent must establish the comparability of the properties being examined. Conclusory statements that a property is “similar” or “comparable” to another property do not constitute probative evidence of the comparability of the two properties. Long v. Wayne Township Assessor, 821 N.E.2d 466, 470 (Ind. Tax Ct. 2005). Instead, the proponent must identify the characteristics of the subject property and explain how those characteristics compare to the characteristics of the purportedly comparable properties. Id. at 471. Similarly, the proponent must explain how any differences between the properties affect their relative market values-in-use. Id.
In
support of her argument, Ms. LeVeque submitted sales and cost information for
thirteen waterfront properties that sold between July 2002 and July 2012. For
the improved properties, Ms. LeVeque calculated the cost of the improvements
using the 2012 Craftsman cost estimator and abstracted the improvement value
from the sales price to arrive at the market value of the land for each
property, resulting in front foot values that ranged from $1 to $2,489. Based
on the sales, the Petitioners’ representative contends the subject property’s
land should be valued at $1,650 a front foot, resulting in an assessed value of
$99,800 for the land for 2010 and 2011.
The
Petitioners’ representative, however, made no attempt to show how the
properties were similar or how the properties differed. Ms. LeVeque only
testified that her sales were all lake-front properties. But whether properties
are similar enough to be considered “comparable” depends on a number of factors
including the size, shape, topography, accessibility and use of the properties.
See Beyer v. State, 280 N.E.2d 604, 607 (Ind. 1972) (“One need only
examine the multitudinous factors which make separate tracts of land similar or
dissimilar to realize that the variation in the character of land is limitless.
No two tracts of land are identical”). And in fact the Petitioners’
representative calculated front foot values ranging from $1 to $2,489 – which
suggests that the properties differed substantially. Nor did Ms. LeVeque offer
support for her conclusion that the subject property’s land should be valued at
$1,650 a front foot based on sales ranging from $1 to $2,489 per front foot.
Even
if Ms. LeVeque had sufficiently shown that her sales were comparable to the
subject property, the method she used to extract the land value from the sales
price is questionable. First, Ms. LeVeque applied 2012 cost tables to sales
that occurred up to ten years earlier – which over-stated the improvement
values and, in return, underestimated the land values on her comparable sales.
Moreover, the amount of depreciation Ms. LeVeque applied to the various sales
was inconsistent throughout her entire presentation. For example, the property
at 3608 West Shore Drive was 51 years old as of 2012, and Ms. LeVeque applied
59.5% depreciation; whereas the property at 4215 Lake Shore Drive, which was 62
years old and has the same grade and condition according to the property record
cards, was given a 50% depreciation.
In
addition, Ms. LeVeque’s analysis erred on several specific sales. For example,
the property located at 4016 Liberty Street sold on January 24, 2008, for
$230,000. According to the Petitioners’ representative, this sale involved
three parcels: Parcel No. 50-43-07-000-025.000-005, Parcel No.
50-43-07-000-026.000-005 and Parcel No. 50-43-07-000-027.000-005. But the sale
did not actually include 50-43-07-000-025.000-005. According to the sales
disclosure form, the three parcels sold were Parcel No.
50-43-07-000-026-000-005, Parcel No. 50-43-07-000-027.000-005 and Parcel No. 50-43-07-000-033.000-005.
Parcel No. 50-43-07-000-033.000-005 is only 20 feet by 23 feet, which is
significantly smaller than the 33 feet by 80 feet size of Parcel No.
50-43-07-000-025.000-005. Thus, Ms. LeVeque’s inclusion of Parcel No.
50-43-07-000-025.000-005 significantly over-estimated the size of the land,
which then underestimated the price per front foot or price per square foot
value of the property.
Similarly,
according to the Petitioners’ representative, the sale of 4215 Lake Shore Drive
was comprised of three parcels: Parcel No. 50-43-07-0000-201.000-005, Parcel
No. 50-43-07-000-202.000-005 and Parcel No. 50-43-07-000-251.000-005. Petitioner
Exhibits 12 and 15. However, the sales disclosure form shows that the sale
was only for two parcels as shown on the sales disclosure form submitted by the
Respondent. Respondent Exhibit 13 (2011). Parcel
50-43-07-000-251.000-005 was not part of that sale, but sold separately for
$20,900 on the same date, October 8, 2009. And when she abstracted the
improvements from the sale price, Ms. LeVeque calculated the depreciated cost
of improvements to be $78,088 on Exhibit 12, but used $87,000 on Exhibit 15.
Finally,
Ms. LeVeque used sales that were too remote in time to be probative. For
example, she presented four sales that occurred between 2002 and 2006: the
vacant land sale of 3253 Lake Shore Drive; two sales for 8881 Sycamore Drive;
and the vacant land sale of 8977 North Shore Drive. Because she made no attempt
to relate the various sale prices to the subject property’s market value-in-use
as of the relevant valuation dates, the sales have little probative value.
Here,
the Petitioners’ representative failed to discuss how the properties she
submitted as comparable sales were similar to the subject property or how they
differed. The Petitioners’ evidence did little to quantitatively or
qualitatively show how the differences between the properties affected their
relative values. Furthermore, the Petitioners’ evidence lacked credibility
based on the method Ms. LeVeque used to abstract the land value and the number
of errors in her data. The Board therefore finds that the Petitioners failed to
raise a prima facie case that their property was over-valued for the 2010 or
the 2011 assessment years.
