SC Administrative Law Court Decisions

This property tax valuation matter comes before me as a contested case pursuant to S.C. Code Ann. §§ 1-23-310, et seq. (1986 & Supp. 1996) and 12-60-2540(A) (Supp. 1996), upon the filing of a request for a contested case hearing by the Aiken County Assessor ("Assessor") following the exhaustion of prehearing remedies with the Assessor and the Aiken County Tax Review Board ("Board"). At issue is the fair market value of the residence of George Cadelli and Mary Ann T. Cadelli ("Taxpayers") for tax year 1995. The Board valued the subject property at $115,000. The Assessor challenges the Board's methodology of valuation, claiming the property is valued at $126,000. Taxpayers assert the correct valuation is $105,000 - $110,000. A hearing was held February 27, 1997. The parties stipulated that the file and the exhibits exchanged between the parties would be made a part of the record and included as evidence. Upon review of the relevant and probative evidence and applicable law, the fair market value of the subject property for tax year 1995 is found to be $126,000.

By a preponderance of the evidence, I find:

1. Taxpayers are the owners of real property, with improvements, known as 351 Plantation Drive, Aiken, South Carolina, also known as Lot E-11, Huckleberry Farms, Phase E, and delineated as Aiken County TMS #00-134.6-05-005.
2. Aiken County undertook county-wide property reassessment for tax year 1995.
3. In July, 1995, Taxpayers received an initial tax assessment notice from the Assessor indicating the subject property was valued at $136,350 for taxation purposes for tax year 1995.
4. By letter dated July 19, 1995, Taxpayers filed a written protest to the Assessor's valuation and requested review of the assessment.
5. Upon review of the protest and an appraisal, by letter dated March 29, 1996, the Assessor eventually adjusted the value of the subject property to $126,000.
6. By protest form dated April 25, 1996, Taxpayers protested the Assessor's adjusted valuation and requested a conference before the Aiken County Tax Review Board.
7. By an appraisal signed August 19, 1996, and performed by Lee M. West, III, of the Assessor's Office, the fair market value of the subject property was calculated to be $132,000.
8. The Board conference was conducted on September 9, 1996, after which the Board issued its decision dated September 10, 1996, reducing the fair market value of the subject property to $115,000 for tax year 1995.
9. By letter dated September 13, 1996, the Assessor filed a formal request for a contested case hearing before the Administrative Law Judge Division.
10. Notice of the time, date, place, and subject matter of the hearing was given to all parties, and the hearing conducted February 27, 1997.
11. The Assessor appraised the subject property using the market approach, utilizing three comparable sales to determine the fair market value of the Taxpayers' property as of December 31, 1994.
12. The subject property is a one-story brick, single family dwelling constructed in 1978 with 2,070 square feet of living area, containing three bedrooms, two and one-half baths, an attached garage, and patio.
13. Each of the three comparables are located within one mile of the subject property.
14. The subject property and all three comparables are located in the Gem Lakes subdivision.

1. Each of the three comparables are one-story brick, single family dwellings constructed in 1981 or 1982 with 2,029 to 2,112 square feet of living area, containing three bedrooms, two and one-half baths, an attached garage, and patio.
2. Each of the three comparables sales occurred in 1994.
3. Comparable #1, 1923 Huckleberry Drive, had a sale price of $137,500, adjusted in the appraisal to $132,200.
4. Comparable #2, 1310 Moultrie Drive, had a sale price of $147,500, adjusted in the appraisal to $133,300.
5. Comparable #3, 1030 Kismet Drive, had a sale price of $144,000, adjusted in the appraisal to $130,600.
6. In the Assessor's appraisal, each of the three comparables sales were adjusted for the younger age of the dwellings.
7. Comparable #2 was adjusted to take into consideration its greater square footage and the existence of a pool.
8. Comparable #3 was adjusted to take into consideration the existence of a pool.
9. Because Comparable #1 was the most recent sale of the three comparables, the most comparable to the subject in size and design, and required the least adjustment, it was given the most emphasis by the Assessor's appraiser.
10. The Taxpayers offered evidence that the Assessor's comparables were not the best indication of the fair market value of the subject property but did not present an appraisal of their own.
11. Prior to the hearing, Taxpayers reviewed the multiple listing real estate records of Aiken County and offered the summary of their review at the hearing (Respondents' Exhibit #2), which included testimony that there were at least two other sales of comparable homes in the Gem Lakes subdivision and five other sales of comparable homes in the nearby Hounds Lake subdivision in 1994, which the Assessor did not consider in the appraisal.
12. Taxpayers did not provide enough detail regarding their suggested comparables to determine whether the sales are substantially equivalent to the subject property so as to produce a basis for a reasonable calculation of fair market value.



13. Taxpayers' assertion that the Assessor's adjustments to the three comparables used inadequately reflect the value of pools and lot size lacks probative evidence and is unpersuasive.
14. Using the market sales approach, $126,000 is a reasonable calculation of the fair market value of the subject property as of December 31, 1994.

CONCLUSIONS OF LAW

Based upon the foregoing Findings of Fact, I conclude as a matter of law the following:

1. The South Carolina Administrative Law Judge Division has subject matter jurisdiction in this matter pursuant to Chapter 23 of Title I of the 1976 Code, as amended.
2. S.C. Code Ann. §12-60-2540 (Supp. 1996) authorizes the South Carolina Administrative Law Judge Division to hear contested cases in property tax assessment matters pursuant to Chapter 23 of Title I, as amended.
3. For taxation purposes, the value and ownership of property is established for a tax year as of December thirty-first of the preceding year. S.C. Code Ann. § 12-37-900 (1976).
4. The proper measure of value for taxation purposes is the fair market value. Lindsey v. S.C. Tax Commission, 397 S.E.2d 95 (1990), 84 C.J.S. Taxation § 411.
5. Fair market value is defined in S.C. Code §12-37-930 as:

. . . the price which the property would bring following reasonable exposure to the market, where both the seller and the buyer are willing, are not 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.

1. An Assessor's valuation is presumed correct, and the burden is on the property owner to disprove the Assessor's determination. 84 C.J.S. Taxation § 410.
2. In this case, Respondents have the burden of showing that the valuation of the taxing authority is incorrect. Ordinarily this is done by showing the actual value of the property. Cloyd v. Mabry, 367 S.E.2d 171 (Ct.App. 1988).

1. In estimating the value of land, all of its elements or incidents which affect market value or would influence the mind of a purchaser should be considered, such as location, quality,

condition, and use. 1969-70 Op. S.C. Att'y. Gen., No. 3045 at 337; See also 84 C.J.S. Taxation § 410 at 784; § 411 at 794 (1954).

1. To determine a fair market price for the subject property, comparisons of the sale price of other properties of the same character may be utilized. See 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).
2. "Appraisal is, of course, not an exact science and the precise weight to be given to any factor is necessarily a matter of judgment, for the court, in the light of the circumstances reflected by the evidence in the individual case." Santee Oil Co., Inc. v. Cox, 265 S.C. 270, 217 S.E.2d 789 (1975).
3. 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. That is, utilizing comparables present 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).
4. Using the market sales approach, the Assessor's valuation of $126,000 is a reasonable calculation of the fair market value of the subject property as of December 31, 1994.
5. Any issues raised in the proceedings or hearing of this case, but not addressed in this Order, are deemed denied. ALJD Rule 20(B).

ORDER

IT IS THEREFORE ORDERED that the subject property, Aiken County TMS

#00-134.6-05-005, be valued for taxation purposes at $126,000 for tax year 1995.

_____________________________________

STEPHEN P. BATES

ADMINISTRATIVE LAW JUDGE

March 26, 1997

Columbia, South Carolina

960397.wpd