SC Administrative Law Court Decisions

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 (Petitioner) owns the property located at 4518 Sylvan Drive, Columbia, South Carolina, identified as Tax Map No. R16804-08-04.

3. Richland County conducted a county wide reassessment for the tax year 2005, based upon a mass appraisal. The value at that time was determined to be $128,200.00. The Petitioner challenged this value, arguing that her property is not worth the price the Assessor assigned to it.

4. The Petitioner requested review of the appraisal. As a result of this appeal, the Assessor performed an onsite inspection on the subject property on March 31, 2006. During that inspection, the Assessor determined that the subject appeared to be in average condition for a home built in 1955. The Assessor did note a small section of the roof that was slightly sagging and that the kitchen and bath appeared to be in original condition. The hardwood floors were in excellent condition. Although claims of termites were mentioned, neither the Assessor, nor this court were shown any written estimates or statements by contractors or pest control companies addressing the problems. Upon re-inspection, the Assessor lowered the appraisal of the property from $128,200.00 to $120,900.00. The reduction was approximately 5.6% or $7,251 for the sagging roof and the fact that the property is a duplex in a single family residence neighborhood.

5.      Upon appeal to the Richland County Board of Assessment Appeals, the Board

further lowered the value of this property to $112,200.00. The Petitioner was still not satisfied with this valuation and timely appealed this decision to the ALC.

6. Petitioner believes that the value of the property should be further lowered because her home is in disrepair. Specifically, she argues that the roof of her house is sagging; the house has termite damage; the sinks in the bathroom are broken; the kitchen cabinets are in poor shape; the windows, wiring, and bathrooms are old; and the refrigerator is in poor condition. Petitioner believes a more just figure would be $85,000. Although Petitioner estimated what she believed it would cost to make the necessary repairs, those estimates were supported only her own estimates; for example, she estimated that the kitchen would cost $20,000-$30,000, which is her estimate of a total renovation, not of only necessary repairs. Her total estimate of all needed repairs was $55,000- $90,000, which is again unsupported by any evidence other than her own estimates and based solely on conjecture. She failed to introduce any bids by licensed contractors for the repairs or termite inspection reports documenting her termite infestation.

7. The Assessor performed a land appraisal report which looked at a market sales

comparison of the Petitioner’ property to ascertain its value as part of this case. In utilizing the market sales comparison approach, the appraiser looked at three comparable sales of similar properties to obtain an accurate appraisal of the worth of the Petitioner’ property. The following chart summarizes the findings of the appraiser.

Each of these comparables are constructed in the traditional multifamily duplex style with the living area divided equally, while the subject’s total living area of 1,967 square feet is comprised of 1,351(69%) square feet of owner occupied space and 616 square feet (31%) is rented. The owner operated and rented area is separated by a 285 square feet space of finished storage. The comparables are all brick while the subject is vinyl sided. Comparable #2 has a double garage, unlike the subject.

8. Because there are no duplexes in the subject’s immediate neighborhood, the direct sales comparison approach is the best method for estimating the value of a subject property given the fact that sufficient sales exist for the value estimate. The subject’s value estimate of $57.04 per square foot or $112,200 is far below the value range of $80.46-$90.57 per square foot for the comparable properties, as indicated by the three sales listed on the sales comparison chart.

9. Petitioner argues that her property was not fairly assessed because the 2005 reassessment of her property in the amount of $128,143 was an increase of 34%, while the neighbors on either side of her received increases of 26.8% and 26.9% respectively. The reason for this discrepancy was explained by the Assessor. A condition adjustment of 5% was given the subject property per the Petitioner’s 1999 appeal. This adjustment was removed for the 2005 reassessment. Therefore, she received a larger percentage value increase relative to the properties on either side of hers. The subject is currently assessed at $57.04 per square foot, whereas the properties on either side are assessed at $74.92, $76.98, and $75.98 per square feet.

11. Petitioner is a credible witness who aggressively advocated her position on appeal to the Board resulting in a $16,000 reduction of her property’s initial assessment. Petitioner did not offer any contradictory market sales analysis as to the specific value of the subject property to warrant a further reduction. Therefore, I find that the assessed value by the Board of Assessment Appeals of $112,200.00 is valid.

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 (2003) 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. 2007) 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. While not conclusive, market sales of comparable properties present probative evidence of fair market value of similar property. 84 C.J.S. Taxation § 411 (1954). Furthermore, 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).

5. South Carolina courts, as well as other jurisdictions, have relied on the Appraisal Institute’s standards for valuation as published and updated in several editions of The Appraisal of Real Estate. See, e.g., South Carolina Tax Comm’n v. South Carolina Tax Board of Review, 287 S.C. 415, 339 S.E. 2d 131 (Ct. App. 1985); Badische Corporation (BASF) v. Town of Kearny, 288 N.J. Super. 171, 672 A.2d 186 (1996).

6. To determine a fair market price for the Taxpayers’ property, comparisons of the sale price of other properties of the same character may be utilized. See Appraisal Institute, The Appraisal of Real Estate 367 (10th ed. 1992); Cloyd v. Mabry, 295 S.C. 86, 367 S.E. 2d 172 (Ct. App. 1988); 84 C.J.S. Taxation §§ 410-411 at 785, 797 (1954). 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 and it provides 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).

7. In the instant case, the Taxpayer failed to meet her burden of proof of showing the Board of Assessment Appeal’s valuation is incorrect. I conclude that the sales comparison approach employed by the Assessor’s appraiser in arriving at the value of the subject property correctly established its value.

ORDER

Based upon the above Findings of Fact and Conclusions of Law:

IT IS HEREBY ORDERED that the Assessor value the Petitioner’s property for the tax year 2005 at $112,200.00.

AND IT IS SO ORDERED. __________________________________

CAROLYN C. MATTHEWS

February 15, 2008 Administrative Law Judge

Columbia, South Carolina