Sessums v. Multnomah County Assessor ( 2012 )

IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Property Tax
ROBIN SESSUMS, )
)
Plaintiff, ) TC-MD 110288C
)
v. )
)
MULTNOMAH COUNTY ASSESSOR, )
)
Defendant. ) DECISION
Plaintiff has appealed the value of the subject property, assessor‟s account R606812, for
the 2010-11 tax year. Trial was held by telephone on February 13, 2012. Plaintiff appeared on
her own behalf. Defendant was represented by Dave Babcock and Tina Burell, both of whom
are employed by the Multnomah County assessor. Both parties submitted exhibits.
I. STATEMENT OF FACTS
The subject property is Plaintiff‟s personal residence, and is a newly constructed home
built in 2009, which Plaintiff purchased on May 14, 2009, for $460,000.1 The home is located at
5897 SW Boundary Street, in the Hayhurst neighborhood, and is in close proximity to the
Beaverton-Hillsdale Highway. The subject property is approximately three miles southwest of
Portland and two miles east of Beaverton. (Def‟s Ex A at 2.)
The home itself is an approximately 2900 square foot,2 contemporary style home, with
four bedrooms and three and one-half bathrooms. There is a 480 square foot attached two-car
garage. The home sits on a 6200 square foot lot (approximately) that slopes downward from the
1
Construction apparently began in 2008, and the home was completed in 2009.
2
Plaintiff reports the size of the home as 2851 square feet, while Defendant reports the total square footage
of finished living space to be 2968 square feet. (Ptf‟s Ex 3; Def‟s Ex A at 3.) Because the court in the final analysis
finds that the exact size of the home is not important to the determination of RMV, the court rounded the size of the
home to 2900 square feet.
DECISION TC-MD 110288C 1
front to the back. The lot is level to the street in the front and is zoned R5. (Def‟s Ex A at 3.)
The home has two levels of finished living space above ground and a finished daylight basement.
The main floor, which is level with the street, is 1174 square feet in size, with a 900 square foot
lower second level, and an 894 square foot finished basement. (Id. at 6.)
The current real market value (RMV) on the assessment and tax rolls for the 2010-11 tax
year, which was sustained by the county board of property tax appeals, is $502,960. (Ptf‟s Exs 1,
2.) There is $285,820 of exception RMV, which represents the added value to the property
based on the work done to the home after January 1, 2009.3 (Id.) The property‟s maximum
assessed value (MAV) and assessed value (AV) are $310,940. (Id.)
Plaintiff has appealed to this court seeking a reduction in the property‟s RMV to
$383,667. (Ptf‟s Compl at 1.) Defendant is requesting that the court sustain the current values
on the rolls.
II. ANALYSIS
The issue in this case is the RMV of the subject property on the applicable assessment
date, which is January 1, 2010. See generally ORS 308.007.4 RMV is defined in the statute as
“the amount in cash that could reasonably be expected to be paid by an informed buyer to an
informed seller, each acting without compulsion in an arm‟s-length transaction occurring as of
the assessment date for the tax year.” ORS 308.205(1).
While there are three recognized methods for valuing property, the sales comparison
approach is most appropriate for valuing residential property. Ward v. Dept. of Revenue, 293 Or 506,
511, 650 P2d 923 (1982) (citations omitted). The court looks at arm‟s length sales transactions of
3
The court questioned Babcock about the exception value at the beginning of trial. Babcock explained that
all of the exception value was due to the completion of the home and was attributable to the improvement RMV.
4
All references to the Oregon Revised Statutes (ORS) are to the 2009 edition.
DECISION TC-MD 110288C 2
similar property to determine a correct RMV. Richardson v. Clackamas County Assessor, TC-MD
No 020869D, WL 21263620 at *3 (Mar 26, 2003). The value of property is ultimately a question of
fact. Chart Development Corp. v. Dept. of Rev., 16 OTR 9, 11 (2001) (citation omitted).
Plaintiff purchased the subject property in May 2009 for $460,000. The sale was pending
on May 4, 2009, and closed on or about May 14, 2009. The subject property‟s RMV on the tax
roll as of January 1, 2010, is $502,960, approximately $43,000 more than Plaintiff paid for the
property eight months earlier. Plaintiff requested that the RMV be reduced to $383,677, which is
approximately $76,000 less than she paid for the subject property.
Plaintiff argues that her purchase price is not indicative of the market value of her
property on the January 1, 2010, assessment date, because the purchase prices were agreed to
eight months before the assessment date and the market was declining in 2009. Plaintiff
mistakenly believed that the general state of the economy and the declining real estate market in
the Portland area was “public knowledge.” Plaintiff did attempt to demonstrate the decline in the
market from the date of her purchase by showing that her comparable sale #1 (Def‟s comparable
#2) was listed for sale in April 2008 for $725,000, that the list price was lowered several times,
and that the property ultimately sold on December 2, 2009, for $439,000. (Ptf‟s Ex 5 at 10.)
Defendant responded that sale #1‟s pricing history is not necessarily indicative of a general
decline in the real estate market. Defendant posited that there could be many explanations for
the sales history of that property, including the possibility that it was originally listed for
considerably more than it was worth. At any rate, the court finds that the listing history for a
single property is not sufficient to establish market conditions.
Plaintiff submitted a sales comparison grid sheet with three properties she believes are
comparable to her home. (Ptf‟s Ex 3.) The grid sheet provides information on the year the
comparables were built, the number of bedrooms and bathrooms, the type of heating and air-
DECISION TC-MD 110288C 3
conditioning, number of fireplaces, size of garage (single or double), size of home and the lot on
which it sits, as well as the date the property sold, total sales price, and price paid per square
foot. (Id.) Plaintiff did not make any adjustments to those comparable sales to account for
differences between those properties and her home.
Plaintiff testified that her home is two doors down from a nursing home, and that there is
a two-story apartment complex behind her home, that is visible from both of the decks on the
rear of her home, as well as from all of the windows on the back of her house. Plaintiff further
testified that the apartment complex is the only barrier between her home and the nearby noisy
Beaverton-Hillsdale Highway. Plaintiff stated that her home was on the south side of the
Beaverton-Hillsdale Highway, and she opined that homes on the north side of that highway and
closer to Portland and the Portland West Hills are more valuable than her home.
In estimating the value of her property, Plaintiff relied most heavily on her comparable
sale #1, which is Defendant‟s comparable sale #2. That property is 1.4 miles away from the
subject, sold on or about December 1, 2009, which is within one month of the assessment date,
for $136 per square foot. Plaintiff multiplies that per foot value by the size of her home and
arrives at a value estimate for the subject property of $397,528. At trial, Plaintiff stated that she
was willing to settle for that value, which is approximately $15,000 more than her requested
RMV. Plaintiff felt that that was a fair method for valuing her property because the comparable,
located at 3640 SW Boundary Street, was used by both parties, sold close to the assessment date,
has a bigger home and yard, and is, in her opinion, in a better location and neighborhood, being
located closer to Portland at the “start” of the West Hills. Moreover, while the only thing
separating Plaintiff‟s home from the Beaverton-Hillsdale Highway is an apartment complex, her
comparable #1 has large trees providing a barrier between that home and the highway.
DECISION TC-MD 110288C 4
Defendant brought out on cross-examination that that comparable (3640 SW Boundary Street)
had apartment complexes beside and behind it, while Plaintiff‟s property has single family
residential homes on either side. Plaintiff responded that the property at 3640 SW Boundary
Street was in a better location and that, while it did have an apartment complex on one side (as
well as another behind at home), it had a single family residence on the other side. Plaintiff
acknowledged that both apartment complexes could be seen from the comparable property both
parties relied on.
Plaintiff‟s two other comparable sales occurred in November and December 2009. Both
of those homes are slightly newer, have the same number of bedrooms, one less bathroom, and
sit on slightly larger lots. They are also 4.5 miles away from the subject property. Comparable
#2 sold for $400,000 in December 2009 ($125 per square foot) and comparable #3 sold in
November 2009 for $402,500 ($121 per square foot). As indicated above, Plaintiff requests that
her property be valued at $136 per square foot (the value from the sale of Plaintiff‟s comparable
#1).
Defendant noted the fact that Plaintiff made no adjustments to her comparable sales.
Defendant further noted that Plaintiff‟s comparables #2 and #3 were both bank owned properties
and more than four miles away from the subject property whereas all of Defendant‟s comparable
sales are within one mile of Plaintiff‟s property.
By statute, Plaintiff has the burden of proof and must establish an error in the record
assessment by a “preponderance” of the evidence. ORS 305.427. The court has previously ruled
that “[p]reponderance of the evidence means the greater weight of evidence, the more convincing
evidence.” Feves v. Dept. of Revenue, 4 OTR 302, 312 (1971); see also Riley Hill General
Contractor, Inc. v. Tandy Corp., 303 Or 390, 394, 737 P2d 595 (1987) (where the Oregon Supreme
DECISION TC-MD 110288C 5
Court explained that the derivation of the word “preponderance” is Latin in origin and “translates to
„outweigh, be of greater weight.‟”).
The burden of proof requires that the party seeking relief (Plaintiff in this case) provide
evidence to support their argument. The evidence that a plaintiff provides must be competent
evidence of the requested RMV of the property in order to sustain the burden of proof. Woods v.
Dept. of Rev., 16 OTR 56, 59 (2002). Evidence that is inconclusive or unpersuasive is insufficient to
sustain the burden of proof. Reed v. Dept. of Rev., 310 Or 260, 265, 798 P2d 235 (1990). Plaintiff
has no formal training or experience in property valuation, and it was apparent during the trial
that she was not familiar with standard appraisal techniques and supporting evidence, most
notably, the necessity of making adjustments to comparable sales to account for differences
between those properties and the property being appraised (the subject property). Plaintiff‟s
failure to make the necessary adjustments to the comparable sales renders the evidence
unpersuasive. Plaintiff has failed to meet the requisite burden of proof.
Under ORS 305.412, “the court has jurisdiction to determine the real market value * * * on
the basis of the evidence before [it], without regard to the values pleaded by the parties” where the
determination of RMV is an issue. The court has concerns that none of Defendant‟s comparison
sales adjusted for the time of the sales, despite Defendant‟s appraisal report giving the most weight to
sale #1, which occurred almost seven months prior to the January 1, 2010, assessment date for the
2010-11 tax year. (Def‟s Ex A at 5.) In light of the questionable reliability of Plaintiff‟s and
Defendant‟s evidence, the court will refrain from exercising its jurisdiction to change the value.
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DECISION TC-MD 110288C 6
III. CONCLUSION
After reviewing the evidence and testimony of the parties, the court concludes that Plaintiff
has failed to establish by a preponderance of the evidence an error in the RMV of the property
identified as account R606812 for the 2010-11 tax year. Now, therefore,
IT IS THE DECISION OF THIS COURT that Plaintiff‟s appeal is denied and the values
currently on the assessment and tax rolls for the 2010-11 tax year are sustained.
Dated this day of June 2012.
DAN ROBINSON
MAGISTRATE
If you want to appeal this Decision, file a Complaint in the Regular Division of
the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563;
or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.
Your Complaint must be submitted within 60 days after the date of the Decision
or this Decision becomes final and cannot be changed.
This document was signed by Magistrate Dan Robinson on June 7, 2012. The
Court filed and entered this document on June 7, 2012.
DECISION TC-MD 110288C 7