ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This contested case is brought by Alice Abdalla (Taxpayer) against the Richland County Assessor (Assessor) concerning a property
valuation for the 1999 tax year. The Taxpayer exhausted all prehearing remedies with the Assessor and the Richland County Board
of Assessment Appeals (Board). Jurisdiction is granted to the Administrative Law Judge Division by S.C. Code Ann. § 12-60-2540(A) (Supp. 1999).
After notice to the parties, a hearing was conducted on August 23, 2000. Based on the evidence, I find that the proper valuation of the
property located at 3600 Blossom Street, Columbia, South Carolina is $150,260 for the 1999 tax year.
FINDINGS OF FACT
Having carefully considered all testimony, exhibits, and arguments presented at the hearing of this matter, and taking into account the
credibility and accuracy of the evidence, I make the following Findings of Fact by a preponderance of the evidence:
1. The Taxpayer is the owner of real property at 3600 Blossom Street, Columbia, South Carolina, which is the subject of this
contested case hearing. The subject property is situated in a neighborhood commonly known as Shandon.
2. The subject property is identified as Tax Map No. R 13807-02-01 for tax purposes.
3. The Assessor valued the subject property at $154,600. The Taxpayer appealed the assessment to the Richland County Board of
Assessment Appeals. The Board also determined the true value of the subject property to be $154,600
4. Taxpayer contends that the value of the subject property is inflated. Specifically, Taxpayer contends that the subject property is
sixty-two (62) square-feet smaller than the Assessor's rounded measurements, which totals 2,540 square-feet, thereby increasing the
value by $4,340. Taxpayer also contends that the Assessor has utilized comparables which are not similar to the subject property, but
rather have been "handpicked" to support the Assessor's appraisal. Consequently, Taxpayer contends that her comparables are more
reliable and indicate a value of $40,000 less than the Assessor's valuation. Finally, Taxpayer contends that the Assessor's appliance
allowance of $3,600 is too high, as the subject property only has one built-in appliance, a dishwasher, which is approximately twenty
years old.
5. The Assessor appraised the subject property using the market approach and the cost approach, with primary emphasis on the
market approach.
6. Under the cost approach, the Assessor utilized Marshall & Swift and determined the value of the subject property to be
$160,000.
7. In determining the value under the market approach, the Assessor used three comparable properties. The Assessor chose these
comparables because he believed them to be similar in size, design, and age to the subject property, and because they are in the same
neighborhood as the subject property.
8. Assessor Comparable #1 was constructed in 1965 and is located at 3438 Blossom Street; it is situated approximately six blocks
from the church that is directly across from the subject property. Comparable #1 has a stone veneer, as does the subject property, and
sold for $180,000 in December 1998 ($83 per sq. ft.; total sq. ft. 2145).
Assessor Comparable #2 was constructed in 1965 and is located at 3409 Monroe Street, six blocks from the subject property. It sold
for $176,600 in June of 1998 ($83/sq. ft.; total sq. ft. 2118). It should be noted that this comparable has some functional
obsolescence, as the kitchen and baths have not been updated. Also, this comparable is influenced by traffic from the church.
Assessor Comparable #3 was also constructed in 1965 and is located at 3415 Coleman Street. It sold for $215,000 in September 1998
($98/sq. ft.; total sq. ft. 2188). This property is situated one block from the subject property.
9. In its valuation of the subject property, which was constructed in 1960, the Assessor made adjustments for both depreciation (55%)
and external or locational obsolescence based on the subject property's location across from a church with traffic overflow. The
Assessor utilized $70 per square foot to value the subject property at $177, 800. He then reconciled the approaches to derive a final
value of $154,600.
10. Taxpayer submitted fourteen comparables. This tribunal is not convinced that these comparables are reliable indicators to
determine the fair market value of the subject property because the evidence does not indicate that they are comparable to the subject
property in condition, quality, and location. To the contrary, as attained from the appraiser for the Assessor, the evidence indicates
that all of the comparables, except three, are either in very poor condition or not in the same neighborhood as the subject property. DISCUSSION AND CONCLUSIONS OF LAW
I. Valuation
The issue in dispute is the value of Taxpayer's property located at 3600 Blossom Street, Columbia, South Carolina for taxation
purposes. Land is unique, as no parcel is identical to another. Unlike commodities, it does not have a fixed market price at a given
period, and its value is determined by the estimate of the person who values it. 84 C.J.S. Taxation § 411 at 793 (1954). "Generally,
the proper valuation of realty for taxation is a question of fact, to be ascertained in each individual case in the manner prescribed by
statute." Id. Further, Taxpayer has the burden of showing that the Assessor's valuation is incorrect. Cloyd v. Mabry, 295 S.C. 86,
367 S.E.2d 171 (Ct. App. 1988).
S.C. Code Ann. § 12-37-930 (Supp. 1999) provides:
All real property shall be valued for taxation at its true value in money which in all cases shall be held to be the price which the
property would bring following reasonable exposure to the market, where both the seller and buyer are willing, are not acting under
compulsion, and are reasonably well informed as to the uses and purposes of which it is adapted and for which it is capable of being
used.
Fair market value is the measure of true value for taxation purposes under this statute. Lindsey v. S.C. Tax Comm'n, 302 S.C. 504,
397 S.E.2d 95 (1990).
A. Comparable Properties
In order to determine a fair market price for Taxpayer's 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); 84 C.J.S. Taxation §§ 410-411
(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).
In the instant case, the Assessor's selection of comparables in applying the market approach to valuation is a reliable indicator of the
fair market value of the Taxpayer's property. These comparables are similar to the subject in design, location, age, and quality.
Accordingly, a $70 per-square-foot valuation is reasonable for the subject property.
B. Square Footage
Nevertheless, an adjustment should be made to reflect the actual square-footage of the subject property, rather than the rounded
measurement taken by the Assessor. The appraiser for the Assessor conceded that the precise square-footage is more reflective of the
subject's value.
In valuing property, an assessor should take into consideration all relevant factors and circumstances bearing on this determination
that are within his knowledge or brought to his attention. 84 C.J.S. Taxation § 410 (1954). The assessor "should take into
consideration all of [the land's] elements or incidents, such as location, . . . quality, [and] condition . . . which affect market value or
would influence the mind of a purchaser." 84 C.J.S. Taxation, § 411 (1954). "Each case of valuation must be determined according
to the conditions existing at the time, and the property to be assessed is to be taken and valued in the actual condition in which the
owner holds it. . . ." 84 C.J.S. Taxation § 410 (1954). Therefore, reducing the Assessor's rounded measurements which totaled
2,540 square-feet would reduce the value by $4,340, for a resulting value of $150,260.
C. Appliance Allowance
Finally, taxpayer argues that the Assessor's appliance allowance of $3,600 is unreasonable, as the only built-in appliance in the
subject property is a nearly twenty-year-old dishwasher. This tribunal finds that an adjustment should be made for the actual
condition of appliances found on the subject property. The quality and condition of a property has a major influence on the property's
comparability with other properties. Appraisal Institute, The Appraisal of Real Estate 244 (10th ed. 1992). Further, the maintenance
of a property affects its condition. Id at 245. Moreover, in determining property comparability, an appraiser should distinguish
between items in need of immediate repair and those items that may be repaired or replaced at a later time. See Appraisal Institute,
The Appraisal of Real Estate 244-245, 248 (10th ed. 1992). For those items in need of immediate repair, it would be reasonable for a
willing buyer to consider the cost of repair and reduce the purchase price accordingly. See Adams v. Zimmerman, No. 93-32677,
1994 WL 25883 (Mo. State Tax Comm'n. Jan. 28, 1994).
Accordingly, the Assessor's valuation under the cost approach should be reduced by $3,600, as the dishwasher is in need of imminent
replacement, and there are no other built-in appliances in the subject property. It must be noted that the appliance allowance was
derived under the cost approach pursuant to Marshall & Swift. Therefore, any adjustment for an appliance allowance must be made
to the value of $160,000 determined under the cost approach. Consequently, the appropriate valuation under this approach is
$156,400. It is clear that the sales or market approach is most advantageous to the Taxpayer, at a valuation of $150,260.
Based on the aforementioned adjustment, the market value of Taxpayer's property is $150,260.
II. ALJD Rule 9
By letter, Raymond Abdalla requested permission to represent his sister in this matter. This tribunal informed Mr. Abdalla of ALJD
Rule 9, which provides that a party choosing not to represent himself or herself ". . . may be represented by an attorney. . . . In tax
related cases, any party may be represented by a certified public accountant." This tribunal made clear that because Mr. Abdalla did
not hold an interest in the property or was not an attorney or a CPA, he would not be permitted to represent his sister's interest. At
the hearing, Raymond Abdalla represented that he in fact had an interest in the property at issue. Further, he presented a copy of his
deed but did not enter it into evidence. As a result, this tribunal allowed him to represent his sister, Petitioner Alice Abdalla, at the
hearing.
In response to a subsequent letter from this tribunal requesting a copy of the deed giving him one-half interest in the subject property,
Mr. Abdalla stated that the deed was no longer relevant because he had deeded the property back to his sister immediately after the
hearing. The first deed was not recorded and was destroyed to effect the transfer back to his sister. Thus, it is clear to this tribunal
that the transfer of a one-half interest in the subject property to Mr. Abdalla and the transfer back to his sister was solely for the
improper purpose of circumventing the rules of this tribunal.
Although these actions do not merit contempt of court, they are looked upon with disfavor by this tribunal. Each agency has the
authority to decide in the matter before it what constitutes unauthorized practice of law. See In re Unauthorized Practice of Law
Rules Proposed by the South Carolina Bar, 309 S.C. 304, 422 S.E.2d 123 (1992). Upon investigation, this tribunal finds that the
circumvention of the procedural rule was deliberate but not with deceptive intent, the sole basis for not holding Mr. Abdalla in
contempt. His actions constitute a deliberate circumvention of the procedural rules of the Administrative Law Judge Division
(ALJD) and should not be sanctioned, even by remote implication or silence.
The Abdallas'exchange involves more than a private family transaction, entailing as it does substantive legal rights. This tribunal
declines to place its imprimatur upon such inappropriate conduct, constituting a flagrant circumvention of the ALJD's Rules. The
legislature approved the ALJD Rules, and ALJD Rule 9 was promulgated to protect the public interest. Therefore, Petitioner and Mr.
Abdalla should carefully consider the consequences of any similar future actions when litigating before judicial or quasi-judicial
tribunals.
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law,
IT IS HEREBY ORDERED that the Assessor value Taxpayer's property, located at 3600 Blossom Street, Columbia, South
Carolina, for the 1999 tax year at $150,260.
AND IT IS SO ORDERED.
____________________________________
JOHN D. GEATHERS
Administrative Law Judge
Post Office Box 11667
Columbia, South Carolina 29211-1667
September 26, 2000
Columbia, South Carolina |
