ORDERS:
FINAL DECISION
STATEMENT OF THE CASE
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 H. Perry Holcomb and his wife, Evalyn W.
Holcomb ("Petitioners" or "Taxpayers"). Taxpayers are contesting the Assessor's valuation of their
property (residence) located at 1891 Green Forest Drive, Aiken County, City of North Augusta,
South Carolina, for the tax year 1995. Taxpayers exhausted all prehearing remedies with the
Assessor and the Aiken County Tax Review Board ("Board") and now seek a contested case hearing
before the Administrative Law Judge Division ("Division").
The Assessor originally valued Taxpayers' residence at $147,176.00, based upon the mass
valuation approach. Subsequently, after preparing a uniform residential appraisal report, the
Assessor reduced the valuation to $144,000.00. Thereafter, noticing some errors in its calculations
in preparing the report, the Assessor further reduced the valuation to $139,376.00. Taxpayers
appealed that valuation to the Board, which affirmed this latest valuation by the Assessor. Taxpayers
assert that this reduced valuation is still too high and that the correct valuation is $130,000.00.
Taxpayers were allowed only a total of ten minutes to argue their positions and present
evidence to the Board. Taxpayers felt aggrieved by this process and sought remand of this case from
this Division to the Board, requiring the Board to take additional time to evaluate the evidence
presented by Taxpayers. Since this court felt this case would eventually return for a contested case
hearing, no remand was ordered. This court provided to the Taxpayers complete due process in the
development and conduct of this contested case hearing. Accordingly, no remand is necessary and
the request was denied.
After notice to the parties, a hearing was held at the offices of the Administrative Law Judge
Division in Columbia, South Carolina, on September 18, 1997. Upon a thorough review of all
relevant and probative evidence and testimony presented at the hearing and the applicable law, I find
that the fair market value of the subject property for the tax year 1995 is $136,000.00.
FINDINGS OF FACT
Having observed the witnesses and exhibits presented at the hearing and closely passed upon
their credibility, and considering the burden of persuasion by the parties, I make the following
Findings of Fact by a preponderance of the evidence:
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 the
parties.
3. Taxpayers are the owners of real property, with a two story family residence situate
thereon, being known as 1891 Green Forest Drive, North Augusta, Aiken County, South Carolina.
The property is also known as lot 11-B, Knollwood IV, Knollwood Subdivision, and is delineated
as Aiken County MBP# 00-008-0-01-180.This property is the residence of Taxpayers.
4. Taxpayers purchased the property as newly constructed on April 2, 1990 from
Knollwood Construction Company for $141,000.00.
5. Taxpayers appealed a valuation placed on their subject property by the Assessor for
the tax year 1991 to the Board in 1993. After a hearing before the Board on August 12, 1993, the
Board issued its decision on August 25, 1993, determining that the fair market value of Taxpayer's
property was $119,500.00.
6. Aiken County undertook a county-wide reassessment of all real property within the
county for the tax year 1995. As a result of this reassessment, Taxpayer's property was revalued as
of December 31, 1994.
Preliminary Appeals Process
7. Taxpayers received an initial tax assessment notice dated July 2, 1995 from the
Assessor's office, which indicated that the subject property was valued at $147,076.00 for taxation
purposes for the tax (calendar) year 1995. This valuation was based upon the mass valuation
approach.
8. Taxpayers requested review of the assessment by letter dated July 3, 1995. After
several meetings with the Assessor's office personnel, the Assessor amended its valuation upwards
to $147,176.00.
9. Taxpayers appealed that valuation to the Assessor in writing on November 17, 1995
and requested a meeting. After receiving no response, Taxpayers called the Assessor's office on
February 9, 1996. On February 12, 1996, Taxpayers wrote the Assessor sending copy of their
appeal letter of November 17, 1995 and requested a meeting. Again, after receiving no response,
Taxpayers wrote the Aiken County Administrator on October 30, 1996, requesting help in getting
a response from the Assessor's office.
10. By letter dated November 4, 1996, the Assessor's office notified Taxpayers of a
reduction in the fair market value of the property to $144,000.00 and sought contact for the purpose
of setting up a meeting. Lee M. West, III, of the Assessor's office had during the interim performed
a written appraisal of the subject property in the form of a Uniform Residential Appraisal Report
dated July 28, 1996. See Petitioner's Exhibit G-19.
11. On November 7, 1996, Taxpayers and the Assessor talked via telephone and a
conference was agreed to at 10:00 a.m. on November 11, 1996.
12. At the meeting on November 11, 1996, after further review of the reassessment work
sheet the Assessor reduced the valuation on Taxpayer's property to $139,376.00. The Assessor
determined that several errors had been made in the valuation. Taxpayers refused to agree to this
valuation.
Aiken County Tax Review Board Determination Process
13. After the final valuation determination was made by the Assessor's office, Taxpayers
appealed to the Aiken County Tax Review Board for review.
14. The Board conducted its hearing on the matter on June 16, 1997. On June 17, 1997,
Cecil H. Barnes, as chairman of the Board, issued its finding that the fair market value of the
property was $139,376.00, affirming the valuation placed on the property by the Assessor.
Contested Case Hearing Process
15. By letter dated June 23, 1997 and received by the Division on June 24, 1997,
Taxpayers requested a contested case hearing before the Division.
Cost Approach Valuation
16. The Assessor appraised the property, using reproduction costs at 1994 values as
outlined in the 1994 Marshall & Swift Valuation Service Index, at $136,027.00 by applying the cost
approach. The Assessor valued the subject property as containing 2,327 square feet of gross living
area. It also valued the two car garage attached to the residence.
17. The quality of construction of the subject property was given an "average" rating by
the Assessor. See § 12, pages 1-4 and 14 of Marshall & Swift.
18. Applying this approach, the Assessor valued the total square footage of 1,340 square
feet on the first floor at $46.00 per square foot, for a total of $61,640.00; the total square footage of
889 square feet on the second floor at $43.00 per square foot, for a total of $38,227.00; the
unfinished play room over the garage and the screen porch at $4,800.00; and the 578 square feet in
the garage at $20.00 per square foot, for a total of $11,560.00. The total value of the land and all
improvements was $136,027.00.
19. However, the Assessor did not use the cost approach valuation method for
assessment purposes, asserting in its appraisal report that using this approach would result in a
value lower than today's market value for the subject property.
Income Valuation Method
20. In the appraisal report, the appraiser noted that the income approach for valuing the
subject property was not used, stating that there was no rental property in the neighborhood from
which to develop a base.
Market/Comparable Sales Valuation
21. The Assessor used the market approach in appraising the property, utilizing four
comparable sales to determine its fair market value as of December 31, 1994. Each of the four
comparables were of traditional design, were single family residences, were in the same subdivision,
had two car garages, had porches or stoops, and were of masonry construction. See Taxpayer's
"Evidence." Using this approach, the Assessor came up with a valuation of $144,000.00, which was
subsequently reduced to $139,376.00, based upon adjustments for the roof lines and unfinished
square footage of living space over the garage at the subject property.
22. Comparable # 1 is a single family residence built in 1994. It is located at 1873 Green
Forest Drive, Knollwood Subdivision, Aiken County, South Carolina, some two blocks south of the
subject property. This property sold on December 22, 1994, for $156,000.00. It is a two story house
and has a gross living area of 2,229 square feet. A price of $69.99 per square foot was assigned on
the appraisal for the gross living area. Adjustments were made to it for having an "average +"
quality of construction and for the age difference between it and the subject property. The total
adjustment amounted to $11,900.00, giving an indicated value for the subject property of
$144,100.00.
23. Comparable # 2 is located at 206 Cadada Court, Knollwood Subdivision, Aiken
County, South Carolina. It is located some three blocks southwest of the subject property. It sold
on August 23, 1994, for $162,300.00. It is a one story house and has 2,380 square feet of gross
living area; a value of $69.19 per square foot was assigned to it. It was built in 1994 and an
adjustment was made for age in the amount of $9,277.00. Further, it was given a value of "good"
for its quality of construction; an adjustment in the amount of $8,939.00 was made for this factor.
After the total combined adjustment of $18,216.00, the indicated value assigned was $144,084.00.
24. Comparable # 3 is located at 209 Cadada Court, Knollwood Subdivision, Aiken
County, South Carolina. It was constructed in 1994 and sold on February 28, 1994 for $155,000.00.
It is a two story single family residence and has 2,350 square feet of gross living area. Based upon
its sale price, a square footage allocation of $65.96 was assigned to it by the Assessor. Since it was
assigned a rating of "average +" by the Assessor, an adjustment of $2,959.00 was made; an
adjustment in the amount of $8,791.00 was also made for the four years' difference in age. The
resulting value after all adjustments was $143,250.00.
25. Comparable # 4 is the property known as 104 Cascade Drive, Knollwood
Subdivision, Aiken County, South Carolina. It is located some three blocks southwest of the subject
property. This property was constructed in 1994 and sold on May 31, 1994 for $168,650.00. It has
2,428 square feet of gross living area and was assigned a price per foot of $69.46. Further, the
Assessor in the appraisal report gave a rating of "good" to its quality of construction and commented
that it has "many more appointments than the subject property. The exterior if [sic] all brick veneer
and has extra trim work around the exterior. Additional comments are made in the addendum
section of this report." An adjustment of $9,724.00 was made for quality of construction and a
$9,700.00 adjustment was made for age difference. The value assigned after the adjustments was
$149,424.00.
26. Comparables #1and 3 are more similar to the subject property since they are two story
homes.
27. In making the adjustments for quality and age difference, the Assessor used a
difference of $5.00 per square foot for gross living area when a comparable was rated "average +"
and a difference of $8.00 per square foot for gross living area when the comparable was rated
"good." See § 12, page 14 of Marshall & Swift. Adjustments for age difference were based upon
the "age/life method of depreciation." See § 97, pages 1-5 and 17 of Marshall & Swift.
28. Based upon these adjustments for quality of construction and age differences between
the subject property and the four comparables, the average indicated value for the four comparables
in the Assessor's uniform appraisal report should be $135,993, not $139,376. See the following
analysis:
Comparable Square Adjustment Adjustment Value Value
Footage for Depreciation for Quality before adjustment After adjustment
#1 2,229 $3.9735 $5.00 $156,000 $136,006
#2 2,380 $3.8978 $8.00 $162,300 $133,975
#3 2,350 $3.7408 $5.00 $155,000 $134,465
#4 2,428 $3.9950 $8.00 $168,650 $139,525
The average value of all four comparables after the correct adjustments are made is $135,993
($543,971.00 divided by 4). Rounded off, this provides a valuation of $136,000.00 for the subject
property.
29. Taxpayers further assert that the value allocated to each comparable should be
reduced by the sum of $5,400.00, which was the amount Taxpayers assert the Assessor allocated for
a finished bonus room at the subject property. See Petitioner's Exhibit G. The bonus room over
the garage in Taxpayer's residence is unfinished. Since there is no evidence in the record to support
a finding that the four comparables had finished bonus rooms over their garages, nor that the
Assessor allocated the sum of $5,400.00 for the unfinished area over the Taxpayers' garage, I find
that this assertion lacks merit.
Equity Considerations
30. Taxpayers assert that their property has not been valued equitably in relation to other
nearby properties. They seek to have their property reduced in value to reflect the values of similar
property in the area. The Assessor asserts that the same method of valuation (mass method) was
used on all of the properties in the Taxpayer's area and that all properties were valued fairly.
31. In support of their argument, Taxpayers made an exhaustive study of thirty-eight (38)
residences in Knollwood Subdivision IV. In comparing the resale prices of ten (10) previously-occupied homes with their initial sale prices, Taxpayers found that the homes in this general area
increased an average of 0.124 % in value monthly. See Taxpayer's "Exchange of Evidence", Exhibit
4, pp. 20-21.
32. That percentage was then applied by Taxpayers on a monthly basis to the thirty-eight
(38) residences in Knollwood Subdivision IV from their respective initial sales dates to December
31, 1994 to compute a value for each home. Taxpayers then compared that value to the fair market
value assigned to each home by the Assessor using the mass method of appraisal. They found that
the Assessor's valuations of the fair market value of these 38 homes equated to a range from 81.9
% to 116.5% of the valuations calculated based on the average growth factor. The "average" was
97.2%. See Taxpayer's "Exchange of Evidence", Exhibit 5, page 23.
33. Taxpayers also studied the valuations applied to some 16 properties (residences) in
an adjoining subdivision called Rapids-II using the mass appraisal method. This subdivision is in
the same general area of Aiken County, South Carolina. Applying the same concepts and calculation
methods as used with the 38 residences in Knollwood Subdivision IV, the valuations determined by
the Assessor for assessment purposes as of December 31, 1994 equated to 87.3% of their values
applying a monthly appreciation value.
34. This court finds that the arguments of Taxpayers are persuasive and have merit.
There is a wide difference in valuations of the separate properties in these subdivisions which
requires review. However, if this court applies the factor of 97.2% to the calculated fair market
value of Taxpayer's property (versus 92.4% which equates to a value of $139,376.00), the value of
Taxpayer's property for assessment purposes as of December 31, 1994 would be $146,568.85
($150,791.00 multiplied by 97.2%). Accordingly, I find that the appraisal of $136,000.00, using the
market approach, is in equity with other like properties in the general area. A thorough review of
Taxpayers' exhibits clearly shows that the value placed on Taxpayer's property, as compared with
other properties sold in the same general time frame and for the same sales price, is midway in a
$4,000.00 to $5,000.00 range.
Conclusions of Law
Based on the foregoing Findings of Facts and Discussion contained therein, I
conclude the following as a matter of law:
1. S. C. Code Ann. § 12-60-2540 (Supp. 1996) authorizes the South Carolina
Administrative Law Judge Division to hear contested cases pursuant to Chapter 23 of Title 1 of the
1976 Code, as amended.
2. An assessor's valuation is presumed correct with the burden being on the property
owner to disprove the assessor's valuation. 84 C. J. S. Taxation § 410 (1954). The assessor's
decision as to the situs of property and its taxability are also presumed correct and the person
complaining has the burden of proving his grievance. 84 C. J. S. Taxation § 537 (1954).
3. A taxpayer contesting an assessment has the burden of showing that the valuation of
the taxing authority is incorrect. Ordinarily, this would be 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 revoked and the taxpayer is
entitled to appropriate relief. Cloyd v. Mabry, 295 S. C. 86, 367 S. E. 2d 171 (Ct. App. 1988). 4. All real property in the State of South Carolina is subject to taxation. S. C. Code
Ann. § 12-37-2540 (a) (Supp. 1996). Taxes are levied in the amount of six percent of the fair market
value and must be paid by the individual owning the property. S. C. Const. Art. X, § 1; S. C. Code
Ann. § 12-37-610 (1995).
5. Under S. C. Code Ann. § 12-37-930 (Supp. 1996), the measure of value for taxation
purposes is fair market value. Lindsey v. S. C. Tax Comm'n, 302 S. C. 504, 397 S. E. 2d 95 (1990);
84 C. J. S. Taxation § 411 at 791 (1954).
6. Fair market value of a parcel 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.
S. C. Code Ann. 12-37-930 (Supp. 1996).
7. While not conclusive, market sales of comparable properties present probative
evidence of the fair market value of similar property. 84 C. J. S. Taxation § 451 (1954); Cloyd v.
Mabry, 295 S. C. 86, 367 S. E. 2d 172 (Ct. App. 1988).
8. 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).
9. If there are no comparable sales or recent sales to form a basis of comparison, fair
market value may be determined by the testimony of persons acquainted with the property who have
knowledge and experience qualifying them to form intelligent judgment as to the proper valuation
of the property. Appeal of Hart, 199 A. 225, 131 Pa. Super. 104 (1938).
10. "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).
11. The evidence here supports the valuation method utilized by the Assessor, as affirmed
by the Aiken County Tax Review Board. However, the valuation is adjusted to $136,000 to correct
the quality of condition factors. The four comparables utilized by the Assessor are reliable indicators
of value. They represent an average sales price of $135,993.00. This value is well within the range
of comparable residences in the same area and subdivision.
12. The assessment of all property shall be equal and uniform. S. C. Const. Art. X, 1.
However, complete equity and uniformity are not always practical or attainable when valuing
property. Wasson v. Mayes, 252 S.. C. 497, 167 S. E. 2d 304 (1967).
13. The burden of proving an intentional and systematic undervaluation rests with the
complaining party. Sunday Lake Sun Co. v. Wakefield Taxpayer, 247 U. S. 350 (1918). This burden
is not met by a showing that some properties are undervalued. Owen Steel Co., Inc. v. S. C. Tax
Comm'n, 287 S. C. 274, 337 S. E. 2d 880 (1985). Although Taxpayers have argued that the
Assessor's mass appraisal method utilizing the most recent sales/purchase price of properties may
have intentionally and systematically undervalued some properties in Aiken County, South Carolina
in this reappraisal year of 1995, Taxpayers have not shown any inequity in the valuation of their
property.
14. Taxpayer's arguments are based upon the Equal Protection Clauses of the Federal and
State Constitutions, as well as the uniformity provision found in the South Carolina Constitution at
Article X, Section 1. These provisions do not afford the Taxpayers the relief they seek in this case.
None of these constitutional provisions require absolute accuracy in property tax matters. Allied
Stores of Ohio v. Bowers, 358 U. S. 522 (1959); Owen Steel Co., Inc. v. S. C. Tax Comm'n, 287 S.
C. 274, 337 S. E. 2d 880 (1985). The comparables in the record show that the Assessor's average
assessment for the four comparables, as adjusted by this order, correctly reflects the fair market
value of Taxpayer's property for the tax year 1995. Taxpayer's property is valued equitably in
relation to similar property.
ORDER
Based upon the foregoing Findings of Fact and the Conclusions of Law, it is hereby:
ORDERED that the Assessor shall value the Taxpayer's property identified as 1891 Green
Forest Drive, MBP # (S) 00-008-0-012-180, at $136,000.00 for the tax year 1995.
AND IT IS SO ORDERED.
______________________________________
MARVIN F. KITTRELL
Chief Judge
December 30, 1997
Columbia, South Carolina. |
