ORDERS:
FINAL ORDER AND DECISION
STATEMENT
OF THE CASE
The
Petitioner exhausted all administrative remedies with the Assessor and the Charleston
County Board of Assessment Appeals (“Board”). After all parties were given
notice, a hearing was held on June 3, 2008, at the Administrative Law Court in
Columbia, South Carolina.
ISSUE
What is the
appropriate market value for the tax year 2006 for the parcel of real property
located in Charleston County, South Carolina?
FINDINGS
OF FACT
Having
observed the witnesses and exhibits presented at the hearing and closely passed
upon their credibility, taking into consideration the burden of persuasion by
the parties, I make the following Findings of Fact by a preponderance of
evidence:
1. Notice
of the time, date, place, and nature of the hearing was timely given to all
parties.
2. The
Petitioner owns unit 4-D, a tenant occupied condominium in the upper peninsula
of the City of Charleston, on the Ashley River in the Sans Souci Community. The
Sans Souci Community has six buildings. Originally, the community was
comprised of 25 condominiums built in 1964; it now only has 23 units because
units 4-A and 4-C were combined into one unit, 4-AC. All similar units are 980
square feet condos with 2 baths, with the exception of 4-AC which is now 1,774
square feet. Therefore, variations in sales prices within the community are
based on the interior condition of each unit and its view.
3.
4-D, which is the subject of this action, is located on the second floor of
building four within the community. 4-D is a 980 square foot unit which has
two bedrooms and two baths. The unit is rented for $775 a month. The unit is
in average condition, but has an excellent view of the Ashley River. The unit
has not been renovated.
4.
Petitioner owns three other units in the Sans Souci Community. They were
assessed at $116,000 pursuant to Judge Geathers’ Order 2006 WL 3385897
06-ALJ-17-0240-CC (October 19, 2006).
5. Petitioner
contests the Assessor’s valuation of unit 4-D for the 2006 tax year. The
assessor originally assessed the unit at $133,800, based on CAMA (Computer
Assisted Mass Appraisal). That appraisal stated that the land was valued at $25,800;
and the building, at $108,000.
6. Petitioner
appealed this value for his ex-wife, Joyce Miller, estimating a value of $121,000.
The value was lowered to $128,800 by an appraiser who no longer works at the
Charleston County Assessor’s office. The property was conveyed to Petitioner through
a Deed of Distribution dated June 26, 2006 upon Joyce Miller’s passing.
7. Petitioner
appealed the value of unit 4-D again on October 12, 2006. A conference was
held November 8, 2006. After this conference, Mr. Miller indicated that a value
of $109,995.00 was appropriate for the unit. The grounds for Appeal stated
that the unit below, unit 4-C, sold after renovations at $164 per square foot,
and the unit next to 4-D sold for $112 per square foot after $60,000 in
renovations.
8. An
interior inspection of 4-D was performed on January 30, 2007. The Petitioner
was present. The unit was found to be in average condition. Accordingly, a
letter was sent to Petitioner stating that there was no change in the Assessor’s
previous value. Petitioner appealed this decision to the Board of Assessment
Appeals on March 27, 2007, which heard his case on June 13, 2007. The Board of
Assessment Appeals affirmed the Charleston County Assessor’s value of $128,300 by utilizing a sales comparison approach. Dissatisfied with this assessment, Petitioner
appealed to the ALC on the basis that the property should be valued at $109,995.
However, he submitted to the court that he would be willing to accept a value
of $117,500, which adds to the $116,000 value of the three other units that he
owns $1,500 for unit 4-D’s superior view of the Ashley River.
9.
The Charleston County Assessor’s Motion for Directed Verdict on the issue of
whether Petitioner was subjected to intentional and systematic undervaluation
was granted. Therefore, the only remaining issue is the actual value of unit
4-D for the year 2006.
10. Lawanna
Kirkman Schulze was the appraiser for unit 4-D. She is a Certified Residential
Appraiser. She used the sales comparison approach and income approach when
appraising the property. She did not use the cost approach because of the
unit’s age. She is employed by the Charleston County Assessor’s Office, but has
experience in extracting the value of views from her work at the Assessor’s
office in North Carolina. She performed a land appraisal report, which looked at
market sales comparison of the Petitioner’s property, in order to ascertain its
value as part of this case. In utilizing the market sales comparison approach,
the appraiser looked at five comparable sales of similar properties to obtain
an accurate appraisal of the worth of Petitioner’s property. The following
chart summarizes the findings of the appraiser:
Property |
Subject Property |
Comp. #1 |
Comp. #2 |
Comp. #3 |
Comp. #4 |
Comp. #5 |
Location |
204
Sans Souci St.
unit 4-D |
204
Sans Souci St.
unit 4-B |
204
Sans Souci St.
unit 1-C |
204
Sans Souci
St.
unit 6-D |
204
Sans Souci St.
unit1-C |
204
Sans Souci St.
unit 4 A-C |
Condition |
Average |
Average |
Good
-$15,000 |
Good
-$15,000 |
Average |
Very good
-$30,000 |
Date of Sell |
__________ |
1/5/2004 |
8/19/2004
-$6,000 |
7/1/2004 |
5/15/2003
+$3,000 |
5/30/2003
+$7,000 |
Sales Price |
__________ |
$161,000 |
$146,000 |
$160,500 |
$95,000 |
$220,000 |
Floor Location |
2nd floor |
1st floor |
2nd floor |
2nd floor |
2nd floor |
2 story |
Number of Rooms |
Total 4
Bdrms. 2
Baths 1 |
Total 4
Bdrms. 2
Baths 1 |
Total 4
Bdrms. 2
Baths 1 |
Total 5
Bdrms. 3
Baths 2
-$2500 |
Total 4
Bdrms. 2
Baths 1 |
Total 5
Bdrms. 3
Baths 2
-$2500 |
View |
Ashley River |
Ashley River |
Pool
+$30,000 |
Pool
+$30,000 |
Pool
+$30,000 |
Ashley River |
Size |
980 sq. feet |
980 sq. feet |
980 sq. feet |
1260 sq. feet
-$16,800 |
980 sq. feet |
1774 sq. feet
-$4,760 |
Adj. Sales Price of
Comparables |
__________ |
$161,000 |
$155,000 |
$150,200 |
$128,000 |
$146,860 |
All
comparables are located within the Sans Souci complex. Comparables #2, #3, #4,
and #5 required time adjustments at one and one half percent per month. Comparables
#2, #3, and #4 required a positive adjustment for the inferior pool view. Comparable
#2 required a negative adjustment of superior condition due to updated tile kitchen
floor and counters, interior paint, light fixtures and door handles. This is
the same property as Comparable #4, which was purchased prior to the updates.
Comparable #3 required a negative adjustment for superior condition due to
glass front kitchen cabinet doors, laminate counters and new HVAC. However, the
kitchen update was not a professional job. Comparable #5 required a negative
adjustment of superior condition due to the complete renovation and combination
of two units in 1990-1991. The unit was very nicely renovated; very modern;
reflecting New York style, and in mint condition. However, it was a 12-13 year
old renovation. Comparable #1 had not been renovated at time of sale,
according to the buyer, listing and selling agents. The buyer stated that the view
of the Ashley River was its main selling point. Comparable #1 because is virtually
identical to unit 4-D, due to its condition and view of the Ashley River.
The
value of unit 4-D based on a Sales Comparison approach is $150,000. Therefore,
I find that the Board of Assessment Appeal’s valuation of $128,300 is accurate in
light of the Assessor’s valuation.
11. The
Petitioner did not offer any contradictory market sales analysis as to the
specific value of the unit. He presented one witness who testified to the
condition of several of the units; he also entered as exhibits several
documents, such as a flyer for the sale of unit 4 A-C, to argue that his
property was overvalued. He did not submit any appraisals or specific facts to
support his valuations. His main argument for overvaluation of his property is
that his other three units are appraised at $116,000. He believes that 4-D
should be appraised for only $1,500 more than his other units to account for
the view of the Ashley River.
I
find that the Assessor’s valuation of the property is accurate and supported by
a preponderance of the evidence in the entire record. Therefore, I affirm the
Board’s decision.
CONCLUSIONS
OF LAW
Based
upon the above findings of fact, I conclude the following as a matter of law:
1. S.C.
Code Ann. § 12-60-2540 (2005) authorizes the ALC to hear this contested case
pursuant to Chapter 23 of Title I of the 1976 Code of Laws, as amended. The
taxable status of real property for a given year is to be determined as of
December 31 of the preceding tax year. S.C. Code Ann. § 12-37-900 (2003); Atkinson
Dredging Company v. Thomas, 266 S.C. 361, 223 S.E. 2d 592 (1976).
2. In
S.C. Code Ann. § 12-37-930 (Supp. 2005) the Legislature set forth how real
property must be valued:
All property must be
valued for taxation at its true value in money which in all cases is the price
which the property would bring following reasonable exposure to the market,
where both the seller and the buyer are willing, are not acting under
compulsion, and are reasonably well informed of the uses and purposes for which
it is adapted and for which it is capable of being used.
Therefore, fair
market value is the measure of true value for taxation purposes. Lindsay v.
S.C. Tax Comm’n, 302 S.C. 504, 397 S.E. 2d 95 (1990). There is no valid
distinction between market value for sales purposes and market value for
taxation purposes under S.C. Code Ann. § 12-37-930. S.C. Tax Comm’n v. S.C.
Tax Board of Review, 287 S.C. 415, 339 S.E. 2d 131 (Ct. App. 1985).
3. An
Assessor’s valuation is presumed correct and the property owner bears the
burden of proving the Assessor’s determination is not correct. 84 C.J.S. Taxation § 410 (1954). Ordinarily, this is done by proving the actual value of the
property. The taxpayer may, however, show by other evidence that the assessing
authority’s valuation is incorrect. If he does so, the presumption of
correctness is removed and the taxpayer is entitled to appropriate relief. Cloyd
v. Mabry, 295 S.C. 86, 367 S.E. 2d 171 (Ct. App. 1988).
4. In
estimating the value of property, all of the factors which affect market value
or would influence the mind of a purchaser should be considered, such as
location, quality, condition and use. See 84 C.J.S. Taxation §
410 at 784; § 411 at 794 (1954). Cost
minus depreciation can be an acceptable method to determine fair market value.
84 C.J.S. Taxation § 410 (1954). Evidence of the purchase price of
assessed property, while not conclusive, is to be accorded substantial weight
on the issue of fair market value. Belk Dep't Stores v. Taylor, 259 S.C.
174, 191 S.E.2d 144 (1972).
5.
The Constitutional and statutory authority which is applicable to this case is
S.C. Cons. art. X, §1, which provides that “fair market value” is the standard
for property taxation in this State. S.C. Code Ann. Section 12-37-930 (Supp
2005) provides that all property is to be valued “at its true value in money
which is the price which the property would bring following reasonable exposure
to the market, where both seller and buyer are willing, are not under
compulsion, and are reasonably well informed of the uses and purposes for which
it is adapted and for which it is capable of being used.” In short, the fair
market value of property is the measure of its true value for taxation purposes. See Lindsey v. S.C. Carolina Tax Comm’n, 302 S.C. 504, 397 S.E.2d
95 (1990).
6.
The date for valuation for property for tax purposes is “the thirty-first day
of December next preceding” the tax year under consideration. S.C. Code Ann. §
12-37-900 (Supp. 2007). In the case at hand, the tax year is 2006. However,
the valuation date is December 31, 2003 in this instance due to the fact that
2003 should be the proper lien date.
7.
To determine a fair market price for the Property, comparison of the
sale price of other properties of the same character may be utilized. Cloyd, supra; 84 C.J.S. Taxation §§ 410-411 at 785, 797 (1954).
8.
In estimating the value of land, all of its elements or incidents which
affect market value or would influence the mind of a purchaser should be
considered, such as location, quality, condition, and use. 1969-70, Op. S.C.
Atty. Gen., No. 3045 at 337; See also 84 C.J.S. Taxation § 410 at
784; § 411 at 794 (1954).
9.
“Appraisal is, of course, not an exact science and the precise weight
to be given to any factor is necessarily a matter of judgment, for the court,
in the light of the circumstances reflected by the evidence in the individual
case.” Santee Oil Co., Inc., v. Cox, 265 S.C. 270, 217 S.E.2d 789 (1975).
While it is impossible to predict with certainty what a particular property
will sell for, utilizing comparable sales is a good indicator of what a
potential purchaser will likely pay. That is, utilizing comparables present probative evidence of the
market value of the subject property if the comparables
are similar in character, location, and physical characteristics. See 84
C.J.S. Taxation § 411 (1954).
10.
The assessment of all property shall be equal and
uniform. S.C. Const. art. X, § 1. However, complete equity and uniformity are
not practically attainable when valuing property. Wasson v Mayes, 252
S.C. 497, 502, 167 S.E.2d 304, 306-307 (1967).
11.
The intentional and systematic undervaluation of certain properties,
while other properties in the same class are valued at fair market value, is
constitutionally proscribed. See Sunday Lake Iron Co. v. Wakefield
Township, 247 U.S. 350 (1918); Owen Steel Co., Inc. v. S.C. Tax Comm’n,
287 S.C. 274, 337 S.E.2d 880 (1985). The burden of proving an intentional and
systematic undervaluation rests with the complaining party. Sunday Lake Iron
Co., 247 U.S. at 353. This burden is not met by a showing that some
properties are undervalued in relation to the taxpayer’s property. See Sunday
Lake Iron Co., 247 U.S. at 350; Owen Steel Co., Inc., 287 S.C. 274,
337 S.E.2d 880 (1985). The taxpayer failed to establish either that the Assessor
intentionally or systematically undervalued property in Charleston County, or
that his property was not equitably valued. Therefore, a directed verdict was
granted on this issue.
12.
Initially, the Assessor used the mass appraisal method to value the
Property. Subsequently, it conducted a more in-depth and personal valuation of
the Property which consisted of a field review. It utilized both the comparable
sales method and the cost approach method in arriving at a fair market value of
$150,000. The Board upheld the Assessor’s initial valuation of $128,300.
The
Petitioner did not use a particular method in valuing his property; rather, he
argued that value was too high because his other three units are assessed at $116,000
each.
13.
The Court finds that the methods used by the Assessor are correct and
accurate in valuing the Property. The Assessor correctly used the methodology
outlined for valuing property using the sales comparison approach contained in
Chapters 17-19 of The Appraisal of Real Estate, 12th Ed.,
2001. The evidence supports the finding of the Assessor and the Board that the
value of $128,300 is the amount a willing buyer would pay to a willing seller
for the property. The five comparables utilized by the
Assessor are reliable indicators of value.
14.
Based on the evidence presented before me, I find and conclude that the market
value of the Properties as of December 31, 2003 is $128,300.
ORDER
Based upon the
above Findings of Fact and Conclusions of Law:
IT IS HEREBY
ORDERED that the Assessor’s valuation of the Petitioner’ property for the
tax year 2006 at $128,300 is affirmed.
AND IT IS SO
ORDERED. ___________________________________
CAROLYN C. MATTHEWS
July 1, 2008 Administrative
Law Judge
Columbia, South Carolina
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