ORDERS:
ORDER AND DECISION
STATEMENT OF THE CASE
This matter came before me for a hearing on May 25, 1995 at 11:00 a.m. in Columbia, South
Carolina pursuant to Petitioner's appeal of a decision of the Charleston County Board of Assessment
Appeals ("Board") dated January 20, 1995. The Petitioner seeks review of a determination by the
Board increasing the value of his real property located at 41 Eugenia Avenue, Kiawah Island, South
Carolina, for the tax year 1993 and valuing it as two (2) separate buildable lots.
The Petitioner, the Charleston County Tax Assessor, and the South Carolina Department of
Revenue and Taxation, a party intervenor, filed briefs reflecting their respective positions and each
appeared at the hearing offering oral argument.
EVIDENCE
All parties agreed that the procedure outlined in S.C. Code Regs. 117-4 for hearing appeals
from county assessment boards utilized prior to February 1, 1995, the date the South Carolina Tax
Commission was divested of and the Administrative Law Judge Division was vested with
jurisdiction, would be applicable in this case. They also stipulated this matter is a "contested case"
under the Administrative Procedures Act with authority in the Administrative Law Judge Division
to issue its own findings based upon the arguments and evidence before it.
The following exhibits were made a part of the record without objection:
1. Official transcript of the hearing before the Board held on January 25, 1995.
2. Appraisal by Robert W. Ragin & Associates, dated September 16, 1994 (Petitioner's
exchange at the Board hearing).
3. Appraisal by John R. Lindsay, Charleston County Tax Assessor, dated November 4,
1994 (Respondent's Exchange at the Board hearing).
4. Four (4) photographs of the real property owned by the Petitioner
5. Survey of the real property (as divided into lots 21A and 21B, Block A) prepared by
Southeastern Surveying, Inc., as revised on May 31, 1989.
FINDINGS OF FACT
After consideration and review of all the evidence and testimony, by a preponderance of the
evidence, I make the following findings:
1. This Division has personal and subject matter jurisdiction.
2. Notice of the date, time, place and nature of the hearing was timely given to all parties.
3. On January 8, 1981, Petitioner purchased lot 21, Section 1, Tract 1, Block A ("lot
21") with the residence thereon, fronting north on Eugenia Street, in the town of Kiawah, South
Carolina. Subsequently, Petitioner conveyed a fifty percent (50%) interest to his wife.
4. The residence on lot 21 was constructed around 1957 and does not meet FEMA
requirements.
5. The property was subject to restrictive covenants which expired in 1984. However,
in 1989 the Town of Kiawah adopted an ordinance subjecting the lots as well as adjoining lots, to
residential use only and to certain individual size requirements in terms of subdivision. Board
Transcript, pp. 10-11.
6. Petitioner, believing that a lot's minimum square footage requirements for residential
usage might become more onerous in the future through amendment of the town ordinance, decided
in 1989 to subdivide the lot. A modification of the division line separating the lots, which would
make each lot more rectangular in shape, could subsequently be applied for after Petitioner's death
or if a sale of the lots was contemplated.
7. In 1989, Petitioner obtained approval from the Charleston County Planning Board to
subdivide his lot into two (2) parcels, 21A and 21B, as reflected on a revised survey by Mark S.
Busey, SC RLS, of Southeastern Surveying, Inc., dated May 31, 1989. The plat was later recorded
in the Charleston County RMC office in Plat Book BW at page 137.
8. There is no public sewer on Eugenia Avenue and lot 21 A has not met the standards
for a septic tank permit.
9. After the plat referenced in paragraph 3 was recorded, the assessor assigned lot 21A
Tax Map Sheet # 207-08-00-096 (TM lot 096) and lot 21B Tax Map Sheet # 207-08-00-023 (TM
lot 023).
10. By deed dated August 20, 1990, which was recorded in Deed Book F 211 at page 263
in the Charleston County RMC Office, Petitioner and his wife acquired an additional parcel of land
ten feet (10') wide by two hundred feet (200') deep adjoining TM lot 096 for usage as a driveway
from their property to Eugenia Street. Board Transcript, p. 5. This strip was deeded subject to rights
of ingress and egress to others as enumerated therein.
11. The Charleston County Assessor's Office for the Calendar Year 1993 assigned a
market value to TM lot 096 of $350,000.00 and a market value to TM lot 023 of $481,000.00
($350,000.00 to the land and $131,000.00 to the house).
12. By notices dated June 10, 1994, the Charleston County Assessor's Office informed
Petitioner of his right to file written objections to its appraisals of both lots 21A and 21B. Board
Exhibits "F" and "G".
13. At the Board hearing on January 25, 1995, the Charleston County Assessor reduced
his market value appraisal of TM lot 096 from $481,000.00 to $411,000.00. He effectively reduced
the value allocable to the land from $350,000.00 to $280,000.00. His appraisal was based upon fee
simple estate.
14. Robert W. Ragin, a real estate appraiser/consultant and a former Charleston County
Assessor, who represented Petitioner at the Board hearing, prepared an equity value analysis as part
of the "Taxpayer's Exchange." In it he compares the value assigned by the Assessor to TM lots 011,
014, 015, 018 and 022 with that assigned to TM lots 096 and 023 owned by the Petitioner. Further,
TM lot 018 is one hundred and forty-six feet (146') wide and is valued by the Assessor at
$400,000.00, seventy to seventy-three feet (70 to 73') wide lots are being valued at $375,000.00 and
one hundred feet (100') wide lots are valued at $380,000.00. Based upon these comparables, he
assigns for tax year 1993 a value of $200,000.00 to each lot and $131,000.00 to the residence on TM
lot 023 for a total of $531,000.00.
15. The Board, in its decision dated January 30, 1995, affirmed the assessor's assigned
value of $411,000.00 on TM lot 023 and assigned a value of $320,000.00 to TM lot 096 for a
combined valuation of $731,000.00.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude, as a matter of law, the following:
1. S.C. Code Ann. § 1-23-600 (Supp. 1994) grants jurisdiction to the Administrative
Law Judge Division to hear contested cases under the Administrative Procedures Act.
2. S.C. Code Ann. § 12-37-90 (Supp. 1994) grants authority to the South Carolina Tax
Commission to alter values set by the assessor on real property. See S.C. Reg. 117-4.
3. S.C. Code Ann. § 12-4-30(D) (Supp. 1994) provides that an administrative law judge,
after February 1, 1995, shall hear all contested cases as defined by S.C. Code Ann. § 1-23-310 (Supp.
1994) previously heard by the South Carolina Tax Commission.
4. S.C. Code Ann. § 12-37-90 (Supp. 1994) states that all counties shall have a full-time
assessor, whose responsibility is appraising and listing property. Further, the assessor shall:
a) maintain a continuous record of recorded deed sales transactions, building
permits, tax maps and other records necessary for a continuing reassessment
programs;
b) diligently search for and discover all real property not previously returned or
not listed for taxation by the county auditors and list such property for
taxation;
c) when values change, reappraise and reassess any or all real property to reflect
its proper valuation in light of changed conditions, except for exempt property
and real property required by law to be appraised and assessed by the
commission;
d) determine assessments and reassessments of real property in such a manner
that the ratio of assessed value to fair market value shall be uniform
throughout the county.
5. S.C. Code Ann. § 12-43-300 (Supp. 1994) provides the procedure whereby a
taxpayer, upon receipt of a notice from the Assessor of the valuation and assessment placed on his
property, may file written notice of objection to the valuation and assessment within certain time
frames. Failure to serve the written notice of objection within the statutory time limitations is a
waiver of the owner's right to appeal. If the objection is timely filed, the owner may have a
conference with the assessor and, if still aggrieved, may appeal that decision to the Board of
Assessment Appeals. See S.C. Code Regs. 117-3.
DISCUSSION
During the tax year 1993 the Charleston County Assessor's Office, in connection with a
county wide reassessment program, appraised two lots owned by the Petitioner, TM lot 096 and TM
lot 023. The assessor concluded that the correct method of valuation of Petitioner's lots was to treat
each as a separate residential lot and appraise each at their highest and best use, considering the
values assigned to adjoining lots fronting on the Atlantic Ocean. The Board affirmed the method of
valuation of the assessor but reduced the value allocated to TM lot 096.
Our Legislature, in S.C. Code Ann. § 12-37-930 (Supp. 1994), has decided how real property
must be valued.
"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..."
The wording makes it clear that the value is based upon a willing buyer, willing seller
standard, considering the "uses and purposes for which it is adapted and for which it is capable of
being used."
Since its acquisition in 1981, the entire property (both lots) has been used as a single-family
residence. Its usage, both before and after the recording of the plat, has remained absolutely
unchanged. The assessor's appraiser testified that since there are two lots, the assessor's office is
bound to appraise them as two lots and has to assign two separate values. Further, the assessor
argues that the wording of § 12-37-930 makes it clear that the appraisal must consider "the uses and
purposes for which it is adapted and for which it is capable of being used", not its current use. The
assessor opined that the highest and best use is a subdivision of the property into two residential lots.
I find the argument of the assessor, as affirmed by the Board, is without merit. Platting of real
property, by itself, does not change the nature, usage, or value of the property. The South Carolina
Supreme Court has held that the mere recording of a plat does not affect the use of property and
therefore does not change its value. Lindsey v. The South Carolina Tax Commission (Tamsburg),
302 S.C. 274, 395 S.E.2d 184 (1990). See also SCTC Dec. 90-44, 92-89, & 93-40. Current usage
and not title is the determining factor to apply in appraising a property for its highest and best use.
Petitioner further argues that his property has been inequitably assessed and that substantially
identical unimproved lots in close proximity have been valued at $400,000.00. TM lot 018 is a
substantially identical property, valued by the assessor at $400,000.00. It would be inequitable and
an error of law to allow Petitioner's property to be valued in excess of those assigned to other
substantially identical properties that either adjoin or are in close proximity to his property.
Accordingly, it is concluded that the highest and best use of Petitioner's property is as a single
family residence and that the Charleston County Assessor, for the tax year 1993, shall assess
Petitioner's property (TM lot # 096 and TM lot #023 combined) as a single family residence, and
assign a land value of $400,000.00 plus the agreed-upon improvement value of $131,000.00, for a
total assessed value of $531,000.00.
ORDER
Based upon the above Findings of Fact, Conclusions of Law, and analysis in the Discussion,
it is hereby:
ORDERED that the decision of the Charleston County Board of Assessment Appeals dated
January 10, 1995, is reversed and it is further
ORDERED that the Charleston County Assessor for the tax year 1993, shall assess
Petitioner's property (TM lot # 096 and TM lot #023 combined), as a single family residence, and
assign a land value of $400,000.00 plus the agreed-upon improvement value of $131,000.00, for a
total assessed value of $531,000.00.
AND IT IS SO ORDERED.
_____________________________________________
Marvin F. Kittrell
Chief Judge
Columbia, South Carolina
June 8, 1995 |
