From the Indiana Lawyer:
A low occupancy rate alone did not provide the owner of a mobile home community with the evidence it needed to get its property assessment reduced.
The Indiana Tax Court affirmed the final determination by the Indiana Board of Tax Review in Indiana MHC, LLC v. Scott County Assessor, 39T10-1009-TZ-52. The high court ruled because Indiana MHC’s income capitalization approach lacked probative value, the Indiana Board was correct in determining that the property owner failed to prove its 2007 real property assessment was incorrect.
Indiana MHC, owner of Amberly Pointe, a manufactured home community, was successful in getting the Scott County Property Tax Assessment Board of Appeals to lower the original assessment of $5.40 million. However, believing the reduced assessment of $3.38 million was still too high, the property owner appealed to the Indiana board.
At an administrative hearing, Indiana MHC asserted that because only 85 pads of Amberly Pointe’s 205 pads were rented and generating income between 2005 and 2008, only the rented pads had value for purpose of the 2007 assessment. In addition, the property owner also claimed that about 2.6 acres of the community’s 33 acres had no value because the land, as green space, could not generate any income.
Using the income capitalization approach, Indiana MHC contended its property had a value of $1,075,692.
The Indiana board concluded that because the property owner’s income capitalization approach failed to take into account any market data whatsoever, it lacked probative value.
In affirming the board’s determination, the Tax Court explained the requirements for applying the income capitalization approach. Namely, the property owner must not only examine the historical and current income, expenses, and occupancy rates for the subject property but the income, expenses and occupancy rates of comparable properties in the market as well.
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http://www.theindianalawyer.com/mobile-home-parks-occupancy-rate-not-enough-to-reduce-property-assessment/PARAMS/article/31396
