ORDERS:
FINAL ORDER AND DECISION
This contested case is an appeal from the Charleston County Board of Assessment Appeal decision to uphold Respondent’s assessment of two of Petitioner’s rental properties in Charleston County. After notice of the date, time, place and nature of the hearing was given to all parties, the matter came before the Court on December 19, 2006. Present at the hearing were Petitioner, Michael J. O’Shea, Pro Se, Deborah L. O’Shea, Stephen J. Everman, Appraiser for the Charleston County Assessor, and Bernard E. Ferrara, Jr., Esquire, Attorney for Respondent.
PROCEDURAL HISTORY
As part of the quadrennial county-wide reassessment, on June 14, 2005, Respondent initially assigned a fair market value of$196,500 to Petitioner’s rental property at 442 Race Street in Charleston for tax year 2005 and $107,900 to Petitioner’s rental property at 473 Race Street in Charleston for tax year 2005. Petitioner requested and was granted a review conference held on October 31, 2005 following which Respondent lowered its estimate of fair market value at $115,000 for 442 Race Street and affirmed its estimate of fair market value at $107,900 by notices sent to Petitioner on November 18, 2005.
An Appraisal of Real Property for each property was prepared by one, David W. McComish, dated April 26, 2006, which were presented to the Charleston County Board of Assessment Appeals. At its hearing on May 24, 2006, the Charleston County Board of Assessment Appeals upheld Respondent’s valuation of $115,000 and $107,900 respectively, as fair and equitable values. This appeal followed.
McComish left the employ of the Charleston County Assessor’s office before the hearing of the matter before the Administrative Law Court. Thus, a second Appraisal of Real Property of each property was prepared by one, Stephen J. Everman, dated September 22, 2006. Both appraisers used one of the same comparables. Everman presented testimony regarding his appraisals and presented testimony regarding his research into the comparable sales in both his appraisals and McComish’s appraisals. Furthermore, Everman’s appraisals of the fair market values and equity values of the properties confirm and are consistent with those values on appeal.
ISSUE
What is the appropriate market value of Petitioner’s real properties located in Charleston County, South Carolina, and are those values equitable as compared with like surrounding properties?
FINDINGS OF FACT
Based on the parties’ Preliminary tax Appeal Statements, testimony and evidence offered at the hearing, and taking into consideration the burden of persuasion and the credibility of the witnesses, I make the following findings of fact by a preponderance of evidence:
(1) Petitioner owns a parcel of real property at 442 Race Street, Charleston, South Carolina. The eighty-five (85) year old bungalow styled home on the property has approximately 882 square feet heated living space. The wood siding home has two bedrooms, two baths, and a finished open side porch. It has off street parking. It was totally renovated after Petitioner purchased it in 2002.
(2) Petitioner owns a parcel of real property at 473 Race Street, Charleston, South Carolina. The seventy-five (75) year old bungalow styled home on the property has approximately 784 square feet heated living space. The wood siding home has two bedrooms, one bath, and a finished open front porch. It has no off street parking. It was totally renovated after Petitioner purchased it in 2001. Petitioner listed it for sale September 12, 2005 for $189,000 and removed from the listing on December 12, 2005.
(3) Respondent offered testimony and a copy of its written Appraisals of Real Property of Petitioner’s properties that included data from the direct sales appraisal method and equity comparisons to arrive at the final valuations of $115,000 and $107,900 respectively. The best approach to determining the fair market value of the property in this case is the market or direct sales comparison approach. Comparisons of equity are helpful in confirming the valuation derived from market or direct sales.
(4) To determine the market value of the property, Respondent relied upon a sale comparison approach to valuation using information from actual sales of comparable properties to arrive at the market value for the subject property. Respondent chose comparable properties based on their similarities in size, design, age, and location to the subject property. The direct sales comparison sets forth three (3) sales contemporaneous with reasonably proximate to the appraisal date of the subject properties to provide a meaningful comparison of similar properties. The comparables used by Respondent for each of the subject properties are the same.
A. McComish Appraisals of Real Property
Comparable Sale One is located at 426 Sumter Street in the same neighborhood and .14 miles southwest from 442 Race Street and.07 miles southwest of 473 Race Street. It is bungalow styled home and has 870 square feet of living area, off street parking, built seventy (70) years ago. The October 1, 2004 sale price was $160,000, or $183.91 per square feet.
Comparable Sale Two is located at 2 Larnes Street in the same neighborhood and .16 miles southeast from 442 Race Street and .18 miles southeast of473 Race Street. It is a bungalow styled home and has 590 square feet of living area, a finished side porch, off street parking, built approximately seventy-one (71) to seventy-five (75) years ago. The January 30, 2004 sales price was $129,000, or $218.64 per square feet. It was purchased in fair/poor condition in 2003 and was renovated and resold in 2004 and again in 2006 for $197,000.
Comparable Sale Three is located at 13 Carondolet Street in the same neighborhood and .14 miles northeast of 442 Race Street and.21 miles northeast of 473 Race Street. It is a bungalow styled home and has 824 square feet of living area, a finished side porch, off street parking, built seventy-five (75) years ago. The December 15, 2004 sales price was $118,000, or $143.20 per square feet.
B. Everman Appraisals of Real Property
Comparable Sale One is located at 437 Race Street in the same neighborhood and on the same street .01 miles southwest from 442 Race Street and.06 miles northeast of 473 Race Street. It is bungalow styled home and has 1,340 square feet of living area, finished front porch, off street parking, built sixty-eight (68) years ago. The October 27, 2003 sale price was $162,000, or $129.90 per square feet. It was purchased in fair/poor condition in 2001 and was partially renovated when it sold in 2003. The 2003 owner rebuilt the garage and renovated the house and listed it for sale September 9, 2006 for $389,000.
Comparable Sale Two is located at 2 Larnes Street and discussed above.
Comparable Sale Three is located at 23 Larnes Street in the same neighborhood and .14 miles southeast from 442 Race Street and.16 miles southeast of 473 Race Street. It is bungalow styled home and has 876 square feet of living area, finished front porch, off street parking, built seventy-three (73) years ago. The April 12, 2001 sale price was $110,000, or $125.57 per square feet.
Petitioner’s property at 442 Race Street valued at $130.09 per square foot and Petitioner’s property at 473 Race Street valued at $137.63 per square foot both have lower per square foot values than all of the homes contained in the direct sales comparison portion of the Respondent’s first set of Appraisals of Real Property; and have lower than or consistent per square foot values with the homes contained in the direct sales comparison portion of the Respondent’s second set of Appraisals of Real Property.
(5) The residential area peninsula portion of Charleston above the cross-town which includes the neighborhood where the subject property and comparables are located, demonstrates that the subject property was equitably appraised for tax year 2005. For tax year 2001, the average list price was $159,655; average sold was $148,568; median sold was $141,500; and average dollars per square foot was $94. For tax year 2002, the average list price was $175,847; average sold was $164,284; median sold was $164,000; and average dollars per square foot was $101. For tax year 2003, the average list price was $211,589; average sold was $195,615; median sold was $154,500; and average dollars per square foot was $112.
(6) Further, based on the Charleston County CAMA (Computer Assisted Mass Appraisal) Parcel Listing for the subject properties, it set forth five comparable properties to the subject property to demonstrate that the subject properties were equitably appraised. For a sale date of July 12, 2004, six months after the date of value of Petitioner’s property, Comparable One shows an adjusted sales price at $117,000; Comparable Two at $121,400; Comparable Three at $137,400; Comparable Four at $141,300; and Comparable Five at $129,400. All five comparables show higher sales prices based on information with similarities in size, design, age, and location to the subject properties.
(7) Petitioner did not present any evidence that the properties were inequitably appraised by Respondent.
CONCLUSIONS OF LAW
Based upon the Findings of Fact, I conclude the following as a matter of law:
(1) This matter is properly before the Court pursuant to S.C. Code of Laws Ann. §§ 12-60-2510 et seq., “Appeals, Protests and Refunds for Property Valued by County Assessors.” A taxpayer may appeal a property tax assessment determination of a county board of assessment appeals by requesting a contested hearing before the Administrative Law Court, S.C. Code Ann. § 12-60-2540(A) (Supp. 2005). The party contesting the assessing authority’s valuation bears the burden of proving the actual value of the property at issue. Reliance Ins. Co. v. Smith, 327 S.C. 528, 534-535, 489 S.E.2d 674, 677-678 (Ct.App. 1997).
(2) A presumption exists that an Assessor’s valuation is correct. See S.C. Tax Comm’n v. S.C. Tax Bd. of Review, 278 S.C. 556, 562, 299 S.E.2d 489, 492-93 (1983).
(3) S.C. Code Ann. § 12-37-930 (Supp. 2005) provides that:
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…
Similarly, S.C. Const. Art. III § 29 provides that “All taxes upon property, real and personal, shall be laid upon the actual value of the property taxed, as the same shall be ascertained by an assessment made for the purpose of laying such tax.”
Therefore, fair market value is the measure of true value for taxation purposes. Lindsey v. S.C. Tax Comm’n, 302 S.C. 504, 507, 397 S.E.2d 95, 97 (1990). Market value applies equally for sales purposes and 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, 418, 339 S.E.2d 131, 133 (Ct.App. 1985). The Court in Santee Oil Co. v. Cox, 265 S.C. 270, 277, 217 S.E.2d 789, 793 (1975) noted that, “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.” Id.
Standards within the appraisal industry generally support comparisons of sale price of other similar properties in determining fair market price. See Appraisal Institute, The Appraisal of Real Estate, 367 (10th ed. 1992). See also Long Cove Home Owners’ Ass’n, Inc. v. Beaufort County Tax Equalization Bd., 327 S.C. 135, 142, 488 S.E.2d 857, 861 (1997) (“The ‘willing buyer/willing seller’ standard in [Section 12-37-930] is hypothetical in nature and may be assumed when no actual market exists for a particular parcel of land.”). I find and conclude that the evidence supports market sales comparison as the best approach to determining the fair market value of Petitioner’s real properties. See Smith v. Newberry County Assessor, 350 S.C. 572, 567 S.E.2d 501 (Ct. App. 2002).
(4) I find and conclude that Petitioner’s real properties were fairly assessed and the true values properly derived pursuant to S.C. Code Ann. § 12-37-930.
(5) While it may not be possible to attain complete equity and uniformity when valuing property [see, e.g., Wasson v. Mayes, 252 S.C. 497, 167 S.E.2d 304 (1969)], I find and conclude that as an alternate and confirmatory check on valuation, the comparables in this case were reasonably chosen to provide an equity comparison such that Petitioner’s real properties were fairly and equitably assessed pursuant to S.C. Code Ann. § 12-43-220.
ORDER
Based upon the above Findings of fact and Conclusions of Law:
IT IS HEREBY ORDERED that the decision of the Charleston County Board of Assessment Appeals upholding the fair market value of $115,000 for 442 Race Street, Charleston, SC and $107,900 for 473 Race Street, Charleston, SC, and the assessments corresponding thereto, are affirmed.
AND IT IS SO ORDERED.
_______________________________________
JOHN D. MCLEOD
Administrative Law Judge
January 17, 2007
Columbia, South Carolina |
