South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
Charleston County Assessor vs. Amy Louise Bennett, as Trustee

AGENCY:
Charleston County Assessor

PARTIES:
Petitioner:
Charleston County Assessor

Respondent:
Amy Louise Bennett, as Trustee
 
DOCKET NUMBER:
02-ALJ-17-0268-CC

APPEARANCES:
For the Petitioner: John R. Blanton, Pro Se

For the Respondent: R. Patrick Welch, CPA
 

ORDERS:

FINAL ORDER AND DECISION

STATEMENT OF THE CASE

This matter comes before the Administrative Law Judge Division (ALJD or Division) pursuant to S.C. Code Ann. § 12-60-2540(A) (2000) on Petition of the Charleston County Assessor (Assessor), contesting the decision of the Charleston County Board of Assessment Appeals (Board) finding the value of the Respondent’s property (the Property) to be $220,000.00 for the 2001 tax year. A hearing was held at the offices of the Division on August 27, 2002.

ISSUE PRESENTED FOR DETERMINATION

Did the Charleston County Board of Assessment Appeals properly value the Respondent’s Property, known as Tax Map No. 141-00-00-081, at $220,000.00, or did the Respondent prove that the appropriate value of the Property should be $100,000.00 for the 2001 tax year?

PROCEDURAL BACKGROUND


In 2001, the Charleston County Assessor conducted a countywide reassessment pursuant to S.C. Code Ann. § 12-43-217 (2000) for the 2001 tax year.[1] The Assessor initially determined in the reassessment that the total assessed value of the Respondent’s Botany Bay Island Property for the 2001 tax year was $330,000.00. The Respondent opposed the Assessor’s determination, asserting the Property should be valued at $100,000.00 based upon lack of services and severe restrictions placed on the Property, as part of a private island community. The Respondent appealed that valuation to the Charleston County Board of Assessment Appeals. On February 28, 2002, the Board set forth in its Decision:

The Charleston County Board of Assessment Appeals believes that the equity value should be reduced by one-third, based on the lack of services, restraint of use, and the comparables presented by Ms. Brown. Therefore, the Board of Assessment Appeals places an equity value of $220,000.00 on the subject property for the tax year 2001.

It is from that decision that the Assessor appeals to this Division.

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 Respondent owns TMS No. 141-00-00-081, Botany Bay Island, Charleston County, South Carolina. The Property consists of an unimproved lot which is approximately one acre in size, situated on the northwest side of the island on the marsh. It is one of twelve lots owned by the Respondent and eleven other members of Botany Island, LLC, with amenities, restrictions, and conditions thereto, also known as the Ocella Lodge Section. The Respondent has a one-twelfth undivided ownership interest and use of the entire island excluding any privately owned lots and homes.[2] In December 1999, the Respondent paid $200,000.00 for this Property, along with a one-twelfth undivided interest in Botany Island, LLC.

In accordance with the purchase agreements, each of the individual property owners who purchased an interest in the Ocella Lodge Section of Botany Bay Island has exclusive access to Ocella Lodge four weeks out of the year, as determined by a “lottery” system. The Ocella Lodge owners also have the right to use the Beach Cabana and a dock located near Ocella Lodge for access to the island from Bohicket Marina. Additionally, the Ocella Lodge Section owns a lot upon which a caretaker’s house has been built.[3]

However, Botany Bay Island is accessible only by water and the sole means of motorized transportation on the island by the property owners or their guests is via golf cart. Consequently, the property owners must bring all their food and drink onto the island. Additionally, though Botany Bay Island does have electrical and private water capabilities, it does not have any services on the island, such as fire and medical services. Nor will the island be serviced by a public water supply for drinking, bathing or sewer use. The Conservation Easement also limits the square footage and height of the houses built on the island.

3. The Assessor argues that the market value of the Respondent’s Property for the 2001 tax year is $330,000.00. The Assessor supported his appraisal with a market sales analysis of the subject Property. The analysis was based upon comparison of the Respondent’s Property with the market sales of three similarly situated properties. Along with this market sales analysis, the Assessor conducted an equity study of these similar properties to account for the waterfront location of the subject Property, various amenities, and services or lack thereof.


All three comparables presented by the Assessor are located on Dewees Island, Charleston County, South Carolina. Dewees Island is the only other island in Charleston County in which the resident’s are limited to accessing their homes only by boat.

The Assessor’s Comparable 1 is TMS No. 608-13-00-003, a waterfront lot on Dewees Island. This lot is approximately 1.8 acres in size and sold for $440,000.00 in February 1998. The appraiser made adjustments to this comparable by adding $160,000.00 to the 1998 sales price for appreciation and then deducting $75,000.00 to account for the differences between this lot and the subject Property. He ultimately valued Comparable 1 at $525,000.00.

Comparable 2, also a waterfront lot on Dewees Island, is TMS No. 608-14-00-001. It sold for $320,000.00 in June 1997 and is approximately 2.2 acres in size. Again, the appraiser made adjustments to this comparable by adding $160,000.00 to the 1997 sales price for appreciation and then deducting $75,000.00 to account for the differences between this lot and the subject Property. The appraiser assigned a value of $405,000.00 to Comparable 2.

The Assessor’s third comparable is TMS No. 608-15-00-047, a lakefront lot located on Dewees Island. This property sold for $367,500.00 in June 2000 and is approximately 1.7 acres in size. The adjustments the appraiser made to Comparable 3 were: a deduction of $37,000.00 from the 2000 sales price to allow for depreciation and a further deduction of $75,000.00 to account for the differences between this lot and the Respondent’s Property. On the other hand, the appraiser added $200,000.00 to this property’s value to account for its lakefront location. He ultimately valued Comparable 3 at $455,500.00.


4. The Respondent contends that this Property should be valued at $100,000.00 “based on values of two larger lots on the [i]sland, and the fact that the subject property has many restrictions in place due to the Nature Conservancy Easement.”[4] The Respondent also used the market sales analysis approach to derive the value of the subject Property. The comparables the Respondent used were two properties located on Botany Bay Island both of which are not part of the Ocella Lodge Section. The Respondent contends that the properties best reflect the fair market value of the subject Property because the purchase price of the Ocella Lodge Section lots included the additional purchase of portions of the common areas that do not add to the fair market value of those properties and that are already taxed under the limited liability corporation.

The Respondent’s Comparable 1 is TMS No. 141-00-00-004, situated on Botany Bay Island outside of the twelve parcels that comprise the Ocella Lodge Section. It is approximately two acres in size and has a 1,430 square foot dwelling on the lot. This lot enjoys an ocean front view on the southeast side of the island, in contrast to the subject Property. The Charleston County Assessor assessed this property and dwelling at $186,000.00.

Comparable 2 presented by the Respondent is a lot on Botany Bay Island without a dwelling. This comparable is also not a part of the Ocella Lodge Section. Comparable 2, TMS No. 141-00-00-010, is approximately two acres in size and was assessed by the Charleston County Assessor at $110,000.00. This lot is also located on the southeast side of the island with an ocean front view.

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 (2000) authorizes the Division to hear this contested case pursuant to Chapter 23 of Title 1 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 (2000); Atkinson Dredging Company v. Thomas, 266 S.C. 361, 223 S.E.2d 592 (1976).

2. In S.C. Code Ann. §12-37-930 (2000), 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.


Under this statute, there is no valid distinction between market value for sales purposes and market value for taxation purposes. S.C. Tax Comm’n v. S.C. Tax Board of Review, 287 S.C. 415, 419, 339 S.E.2d 131, 133 (Ct. App.1985). 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). While not conclusive, fair market value may be determined by comparisons of the sale price of other properties of the same character, location, and physical characteristics. See Appraisal Institute, The Appraisal of Real Estate 367 (10th ed. 1992)[5]; Cloyd v. Mabry, 295 S.C. 86, 367 S.E. 2d 171 (Ct. App. 1988); See 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).

3. Ordinarily, 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). The taxpayer may, however, remove the presumption of correctness by showing that the assessing authority’s valuation is incorrect. Cloyd v. Mabry, 295 S.C. 86, 367 S.E.2d 171 (Ct. App. 1988). However, in Reliance Ins. Co. v. Smith, 327 S.C. 528, 489 S.E.2d 674 (1997), the Court of Appeals held that when an Assessor is appealing a County Board of Assessment Appeals’ decision finding a different valuation than the Assessor, the Assessor bears the burden of proving the correctness of the valuation he propounds.

4. The Respondent’s Comparables 1 and 2 are not located in the same portion of the island as the subject Property, but both share ocean views, a seemingly more desirable characteristic. Furthermore, though both comparables presented by the Respondent are not part of the Ocella Lodge Section of Botany Bay Island, the only additional amenities that the Ocella Lodge Section properties offer are:

·                      A one-twelfth ownership interest in Botany Island excluding any privately owned lots and homes;

·                      Use of Ocella Lodge four weeks out of the year;

·                      Use of a dock located near Ocella Lodge for access to the island from Bohicket Marina;

·                      Use of the Beach Cabana; and

·                      Ownership of the caretaker’s lot and home.


Though those amenities are certainly desirable, it appears questionable that a purchaser of the Respondent’s Property would view the above amenities as worth $220,000.00 (the difference between the Assessor’s valuation of the Respondent’s Property and the Assessor’s valuation of the Respondent’s Comparable 2). In fact, the Respondent’s Comparable 2 is larger and arguably enjoys a better view than the Respondent’s Property.

On the other hand, the Respondent paid $200,000.00 for the subject Property. The Respondent contends that those purchase prices were effected by the fact that the property owners were purchasing a “concept” – that this island would not be further developed in the future because of the many restrictions placed upon it. However, the restrictions and amenities granted to the Ocella Lodge Section owners are applicable to future purchasers of the property. Therefore, the concept that this island would not be further developed is equally applicable to a current purchaser of the Respondent’s Property. Furthermore, a subsequent purchaser would acquire the same rights to the use of the amenities of the Ocella Lodge Section.

Therefore, after reviewing the above factors, I find that the Charleston County Board of Assessment Appeals’ valuation of $220,000.00 best reflects the true market value of the Respondent’s Property.

ORDER

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

IT IS HEREBY ORDERED that the Assessor shall value the Respondent’s Property for the tax year 2001 at $220,000.00.

AND IT IS SO ORDERED.

____________________________

Ralph King Anderson, III

Administrative Law Judge

April 29, 2003

Columbia, South Carolina



[1] Section 12-43-217 sets forth, in relevant part:

(A) Notwithstanding any other provision of law, once every fifth year each county or the State shall appraise and equalize those properties under its jurisdiction. Property valuation must be complete at the end of December of the fourth year and the county or State shall notify every taxpayer of any change in value or classification if the change is one thousand dollars or more. In the fifth year, the county or State shall implement the program and assess all property on the newly appraised values.(B) A county by ordinance may postpone for not more than one property tax year the implementation of revised values resulting from the equalization program provided pursuant to subsection (A). . . . The postponement allowed pursuant to this subsection does not affect the schedule of the appraisal and equalization program required pursuant to subsection (A) of this section.

(Emphasis added). Charleston County was to have implemented its new countywide equalization in the 1999 tax year. However, the Charleston County Council delayed the implementation from the 1999 tax year to the 2001 tax year, contrary to Section 12-43-217(B). Furthermore, because there were no property sales of Botany Island, LLC lots prior to December 31, 1998, the Assessor relied upon the 1999 sales of those lots in making its analyses and comparisons.

[2] There are approximately four other lots on Botany Bay Island that are not part of the Ocella Lodge Section of the island for purposes of the one-twelfth undivided ownership and use of the entire island excluding any privately owned lots and homes.

[3] The cost and function of the caretaker, if any, is controlled by the Ocella Lodge Property Owners Association.

[4] This language is taken directly from the Board’s Decision.

[5] The S.C. Court of Appeals has recognized the Appraisal Institute’s The Appraisal of Real Estate as an authoritative text. See South Carolina Tax Commission v. South Carolina Tax Board of Review, 287 S.C. 415, 339 S.E.2d 131 (Ct. App. 1985).


Brown Bldg.

 

 

 

 

 

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