ORDERS:
FINAL ORDER AND DECISION
STATEMENT
OF THE CASE
This
property tax valuation matter is before the Administrative Law Court (ALC or
Court) upon the request of Petitioner Albert Sprague for a contested case
hearing pursuant to S.C. Code Ann. § 1-23-320 (1986 & Supp. 2004) and S.C.
Code Ann. § 12-60-2540(A) (2004). The Petitioner is contesting the Lexington
County Assessor’s valuation of his real property located at 1048 Brown
Boulevard, Lexington, Lexington County, South Carolina (tax map number 006617-04-028)
for the tax year 2004. The Petitioner exhausted all administrative remedies
with the Assessor and the Lexington County Board of Assessment Appeals
(Board). After notice to the parties, a hearing was held on February 8, 2005,
at the offices of the Administrative Law Court in Columbia, South Carolina.
ISSUE
What is the
appropriate market value for the tax year 2004 for the parcel of real property
located in Lexington County, South Carolina, also known as Tax Map No. 006617-04-028?
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
(Taxpayer) owns two lots located at 1048 Brown Boulevard, Lexington, South
Carolina, identified as Tax Map No.006617-04-028. The property is used as
rental property and is not occupied by the owner. The property consists of
0.43 acres with a metal building on it and a mobile home site.
3. Lexington
County conducted a county wide reassessment for the tax year 2001, based upon a
mass appraisal. The value at that time was increased from $21,600 to $60,000.
In 2002, the Petitioner challenged the assessment and the value was lowered to
$43,580. This valuation held for 2003. In 2004, Petitioner challenged the
valuation of $43,580. The Assessor conducted a market sales analysis of the
property and determined based upon that analysis the market value of the
property was correct. The Taxpayer argues that his property is not worth the
price the Assessor assigned to the subject property.
4.
Upon appeal to the Lexington County Assessment Appeals Board, the Board
lowered the value of this property
from $43,580 to $38,000. The Petitioner was still not satisfied with this
valuation and timely appealed this decision to the ALC.
5.
The Assessor performed a market sales analysis 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 property to obtain an accurate appraisal
of the worth of the Petitioner’ property. The Petitioner refused to allow the
Assessor’s appraiser access to his property to determine the condition of the
home.
Comparable one is
located one-quarter mile west of the subject property, and sold in February
2004. It is 1.72 acres with a 1,592 square foot mobile home on it. The
appraiser adjusted the sales price downward $11,700 due to its: 1) larger lot;
2) younger actual and effective age of the residence; and 3) presence of a
fireplace. The appraiser also adjusted the sales price higher $3,000 because
the subject property has a possible mobile home site on it. The resulting adjusted
sales price was $42,300.
Comparable two is
located five miles north of the subject property. Although the mobile home
upon the property is older than the metal building on the subject property, the
comparable property sold for $59,400 in August 2003. It is .52 acres with a
1,487 square foot mobile home on it. The appraiser adjusted the sales price
downward $12,640 due to its: 1) larger lot; 2) younger effective age; and 3)
presence of a patio, washer and dryer connections and a fireplace. To the
contrary, the appraiser adjusted the sales price higher $2,500 because of the
subject property’s possible mobile home site. The resulting adjusted sales
price was $52,560.
Comparable three
is located one block north of the subject property. The property is .28 acres with
a 1,574 square foot mobile home on it. Although the home is only nine years
old, compared with the twelve year old home on the subject property, the
condition of the home on comparable three is “poor” as opposed to that of the
subject property, which is deemed “fair.” Nevertheless, the home sold for
$32,500 in October 2003. The appraiser also adjusted the sales price downward
$2,200 due to the comparable’s: 1) effective age of ten versus twelve years;
and 2) the presence of a fireplace. The appraiser also adjusted the sales price
$9,500 higher to offset: 1) the poor quality of the comparable and 2) the
subject property’s possible mobile home site. The resulting adjusted sales
price was $39,800.
The Petitioner did
not offer any contradictory market sales analysis as to the specific value of
the subject property. Mr. Sprague offered some facts that he felt should decrease
the value of the property. He claimed that the neighborhood was a trailer park
community and the general property values, in his estimation are $15, 000 to
$20,000. He did not, however, submit any appraisals or specific facts to
support his valuation.
6. The
appraiser for the county presented detailed findings on each of the comparable
properties and adjusted the prices as needed to allow for variations in the age
and conditions of the comparable properties to the subject property. The fact
that the subject property could support a mobile home site on it was used to
increase the value of the subject property in each case. I specifically find
that the comparables selected are all valid indicators of the value of the
subject property.
7. The
Petitioner has argued that using a mobile home is not comparable to what he
calls a “pole building.” While that may be the case in certain circumstances,
in this case, the “pole building” has been converted to a residence and is
occupied by the Petitioner’s daughter. I find that the use of mobile homes as
comparable sales to be reasonable.
8. In
addition, this court can only base its decision on matters in the record; that
is, the testimony at trial and the evidence submitted. There is nothing in the
record that supported the decision of the Assessment Appeals Board’s decision
to lower the valuation from $43,580 to $38,000. The only evidence submitted
was a letter from the Assessment Appeals Board to the Petitioner giving the
decision of the board. There were no specific findings of fact or application
of state law to those facts to justify the Board’s action. Accordingly, I find
that the value of the Assessor’s office of $43,580 should be restored.
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. 2003) 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 his burden of proof of showing the
Assessor’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’ property for the tax year 2004
at $43,580.
AND IT IS SO
ORDERED.
___________________________________
CAROLYN C. MATTHEWS
Administrative Law Judge
June 14, 2005
Columbia, South Carolina |