ORDERS:
FINAL ORDER AND DECISION
STATEMENT OF THE CASE
This property tax valuation matter is before the Administrative Law Court
(ALC or Court)
upon the request of Petitioners Jerry R. Mason and Marsha Mason for a contested case hearing
pursuant to S.C. Code Ann. § 1-23-320 (1986 & Supp. 2003) and S.C. Code Ann. § 12-60-2540(A)
(2000). The Petitioners are contesting the Spartanburg County Assessor’s valuation of their real
property located at 237 Lake Road, Inman, Spartanburg County, South Carolina (tax map number
2-20-08-022.00) for the tax year 2003. The Petitioners exhausted all administrative remedies with
the Assessor and the Spartanburg County Board of Assessment Appeals (Board). After notice to the
parties, a hearing was held on June 9, 2004, at the offices of the Administrative Law Court in
Columbia, South Carolina.
ISSUE
What is the appropriate market value for the tax year 2003 for the parcel of real property
located in Spartanburg County, South Carolina, also known as Tax Map No. 2-20-08-022.00?
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 Petitioners (Taxpayers) own a .412 acre parcel located at 237 Lake Road,
Inman, South Carolina, identified as Tax Map No.2-20-08-022.00. The property is located on
Lake Bowen, a sixteen (16) acre lake that features recreational boating, fishing and skiing. Upon
the property is a two story single-family dwelling with a detached garage. The fifteen (15) year
old wood/stone house has 1,243 square feet of living space with two bedrooms but only one bath.
It also has large porches which offer lake views. Though the property has no boat ramp, it has
ninety-six (96) linear feet of water frontage and a dock.
3.Spartanburg County conducted a county wide reassessment for the tax year 2003.
Pursuant to that reassessment, the Respondent (Assessor) notified the Taxpayers that the total
assessed market value of their property had increased from $98,000 to $188,000. The original
assessment was based upon a mass appraisal. After the Petitioners challenged that valuation, the
Assessor conducted a market sales analysis of the property and determined based upon that
analysis that the market value of the property was $172,000. The Taxpayers argue that their
property is not worth the price the Assessor assigned to the subject property.
4.The Assessor performed a market sales analysis of the Petitioners’ property to
ascertain its value. In utilizing the market sales comparison approach, the appraiser looked at
sales of similar property with and without homes to obtain an accurate determination of the worth
of the Petitioners’ property. The appraiser first used three comparable sales with homes to reflect
the value of the subject property.
Comparable one is located on the same street but across the
cove from the subject property and sold for $269,000 in August 2002. It is .28 acres with ninety
(90) feet of water frontage. The appraiser adjusted the sales price downward $41,000 due to its:
1) superior water depth; 2) more recent construction; 3) better condition; 4) greater square
footage; and 5) greater number of rooms. The appraiser also adjusted the sales price higher
$11,000 because the subject property’s stone fireplace and construction quality was better than
the comparable. The resulting adjusted sales price was $239,000.
Comparable two is also located on the same street but across the cove from the subject
property. Though the home upon the property is older, the property sold for $228,000 in July
2001. It is .23 acres with only fifty-seven (57) feet of water frontage. The appraiser adjusted the
sales price downward $73,500 due to its: 1) superior water depth, view and topography; 2)
greater number of rooms; and 3) greater square footage. To the contrary, the appraiser adjusted
the sales price higher $25,500 because: 1) the subject property’s stone fireplace was better than
the comparable; 2) the property sold in July 2001; and 3) the home’s age and quality of
construction were inferior to the subject property. The resulting adjusted sales price was
$180,000.
Comparable three is located on another street and cove from the subject property. The
property is .17 acres and has forty-four (44) feet of water frontage. The home located upon the
property is a one story bungalow with two bedrooms and one bathroom. Though the home is
thirty-three (33) years old, its size is very similar to the Petitioners’ property. Nevertheless, the
home sold for $214,000. The appraiser also adjusted the sales price downward $45,800 due to
the comparable’s: 1) superior water depth, view and topography; 2) greater square footage; 3)
garage and workshop; and 4) preferable porches. The appraiser also adjusted the sales price
$29,500 higher to offset: 1) the subject property’s stone fireplace; 2) the date of the sell of the
property in March 2001; 3) the home’s inferior windows; and 4) the fact that home’s age and
quality of construction were inferior to the subject property. The resulting adjusted sales price
was $173,700.
The appraiser also selected two lot sales (Comparables five & six) without homes in order
to verify the accuracy of her assumptions. Both of these comparables were on the same street as
the Petitioners’ property. Comparable five is only six lots over from the subject property and
also has a similar steep decent to the water, water depth and view as the Petitioners’ property. It
has ninety-five (95) feet upon the lake and sold for $95,000 (or $1,000 per linear lake frontage)
in May 2002. There is also a “run down” home next to the property which equates to the
Petitioners’ concern expressed below about the building next to their property.
The Petitioners did not offer a contradictory market sales analysis or even an opinion as
to the specific value of their home. Rather, Ms. Mason offered some facts that would decrease
the value of the property and attempted to distinguish her home from the comparables offered by
the Assessor. In particular, Ms. Mason testified that their home is predominately a log home that
is upon a lot that is steeply sloped to the lake. There have been no improvements made to the
home since it was built and, in fact, they do not even have a hookup for a washer or dryer. They
also share a well with their neighbor.
The house needs a new roof and the chimney is breaking
away from the house. Additionally, the property is on a shallow cove and next to a boat house
that is an unattractive cement structure.
Nevertheless, that though each of the properties selected by the appraiser have dissimilar
features to the subject property, the appraiser adjusted the values of the comparables to reconcile
most of the above differences. In fact, the appraiser specifically reduced the market value of the
comparables based on the differences of lake view, lake frontage, lake depth, construction
quality, age, current condition of the homes, and the square footage of the homes. Furthermore,
the appraiser considered the deficiencies that the Petitioners noted about their home. In
particular, the appraiser took into consideration the age of the roof and its current condition.
However, she did not take into consideration the problems, if any, with the chimney. On the
other hand, I do not find that the lake view is nearly as wanting as the Petitioners propose.
Additionally, though the appraiser acknowledged that the subject property has larger exterior
porches, I do not find that she gave sufficient credence to how those porches enhance the
property’s desirability.
5.Rather than choose a specific comparable as the best reflection of the value of the
Taxpayers’ property, I find that an overall review of Comparables one, two, three and five best
reflect the value of the Petitioners’ property. Based upon that review, I find that the market value
of the Petitioners’ property, even considering the problems with the chimney, is at least
$172,000.
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 ALC to hear this contested
case pursuant to Chapter 23 of Title I 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 (Supp. 2002) 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.
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). There is no valid distinction between
market value for sales purposes and market value for taxation purposes under S.C. Code Ann. §
12-37-930. S.C. Tax Comm’n v. S.C. Tax Board of Review, 287 S.C. 415, 339 S.E. 2d 131 (Ct.
App. 1985).
3.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).
Ordinarily, this is 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 removed and the taxpayer is entitled to appropriate relief. Cloyd v.
Mabry, 295 S.C. 86, 367 S.E. 2d 171 (Ct. App. 1988).
4.While not conclusive, market sales of comparable properties present probative
evidence of fair market value of similar property. 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).
5.South Carolina courts, as well as other jurisdictions, have relied on the Appraisal
Institute’s standards for valuation as published and updated in several editions of The Appraisal
of Real Estate. See, e.g., South Carolina Tax Comm’n v. South Carolina Tax Board of Review,
287 S.C. 415, 339 S.E. 2d 131 (Ct. App. 1985); Badische Corporation (BASF) v. Town of
Kearny, 288 N.J. Super. 171, 672 A.2d 186 (1996).
6.To determine a fair market price for the Taxpayers’ 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); 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). 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).
7.In the instant case, the Taxpayers failed to meet their burden of proof of showing
the Assessor’s valuation is incorrect. I conclude that the market approach employed by the
Assessor’s appraiser in arriving at the value of the subject property correctly established its value.
ORDER
Based upon the above Findings of Fact and Conclusions of Law:
IT IS HEREBY ORDERED that the Assessor value the Petitioners’ property for the tax
year 2003 at $172,000.
AND IT IS SO ORDERED.
___________________________
Ralph King Anderson, III
Administrative Law Judge
September 1, 2004
Columbia, South Carolina |
