Gramiccioni, Christopher & Deborah v. Township of Wall

NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
TAX COURT OF NEW JERSEY
Mala Sundar R.J. Hughes Justice Complex
JUDGE P.O. Box 975
25 Market Street
Trenton, New Jersey 08625
Telephone (609) 815-2922
TeleFax: (609) 376-3018
taxcourttrenton2@judiciary.state.nj.us
February 28, 2018
UPLOADED
Michael Caccavelli, Esq.
Zipp Tannenbaum & Caccavelli, L.L.C.
280 Raritan Center Parkway
Edison, New Jersey 08837
Jason A. Cherchia, Esq.
O’Donnell McCord, P.C.
1725 Highway 35, Suite C
Wall, New jersey 07719
Re: Gramiccioni, Christopher & Deborah v. Township of Wall
Block 271, Lot 28.09
Docket Nos. 008159-2016; 004900-2017
Dear Counsel:
This letter constitutes the court’s decision following trial of the above captioned matter.
Plaintiffs own a residence, the above-captioned property (“Subject”), in defendant (“Township”).
For tax year 2016, plaintiffs petitioned the Monmouth County Board of Taxation (“County
Board”), which affirmed the Subject’s local property tax assessment of $744,600 (allocated
$270,000 to land, and $474,800 to improvements), using judgment code 2B (“presumption of
correctness not overturned”). For tax year 2017, the Subject was imposed the same assessment of
$744,600. The County Board affirmed the assessment using judgment code 6A (“hearing waived
due to prior year’s appeal pending in the Tax Court”). Plaintiffs filed timely complaints
*
challenging the County Board’s judgments for each tax year. Per the Township’s expert’s report,
the average ratio for each tax year was 100%.
For the reasons stated below, the court reduces the assessment to $690,000 and $700,000
for each respective tax year.
FACTS
Testimony was provided by one of the plaintiffs (husband), and the Township’s expert.
The Subject is a single family, two-story colonial style home located on a one-acre lot. Built in
1998, its total gross living area (“GLA”) is 2,982 square feet (“SF”). Plaintiffs purchased the
Subject in 2007 for $819,000. It is located in a residential zone R-30.
The Subject has five bedrooms (the fifth one was mother-daughter area, which plaintiffs
converted into a bedroom) and three bathrooms (one with a Jacuzzi). There are two gas-fired pre-
fabricated fireplaces and one small wood burning stove. The first floor areas have faux wood, and
the second floor bedrooms are carpeted. The full basement is partly finished. There is also an
attached two-car garage. Amenities include a deck, a cement patio, and an in-ground pool with a
fiberglass shell and a diving board, which is the same age of the house. There is also a wet bar in
the den. Plaintiff provided some photographs of the Subject. Other than the garage, the areas
appear to be in average to good condition. The exterior photograph showed the Subject’s front,
which appear to be in good condition (a portion being brick). According to plaintiff, since
purchasing the home, the only renovations have been new kitchen cabinets, countertops, building
the deck, and painting the home. The Subject is in a cul-de-sac, with its back facing Route 35,
which is a very busy highway, currently undergoing construction.
Plaintiffs relied upon three sales of single-family residential properties which they deemed
comparable since they were all located in the Township, in the same zone (R-30), and one on the
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same street as the Subject. Plaintiffs’ data source was the multiple listing service (“MLS”) website,
property record cards maintained by the assessor’s office, and information from the County
Board’s website. All comparables are similar to the Subject, they were colonial styled two-storied
homes, had two-car attached garages, and central air-conditioning. They were built in 1994; 1992;
and 1999, respectively, thus, about the same age as the Subject. Plaintiff had personally visited all
three comparables, and was able to verify the accuracy of the photographs of the comparables on
the MLS website. The sales were as follows:
Address Lot GLA Sale Date Price Room Amenities
1488 Garrett 0.68 ac 2,900 SF 12/29/14 $640,000 4 beds; 3 baths Cathedral ceiling; hardwood floors;
Dr Jacuzzi; two pre-fab fireplaces; full
finished basement; partial brick-
front; open porch; deck.
1454 Garrett 1.24 ac 3,056 SF 01/31/14 $610,000 4 beds; 3 baths Cathedral ceiling; hardwood floors;
Dr Jacuzzi; one pre-fab fireplace; full
partially finished basement; brick-
front; patio; in-ground pool; deck
1926 Troy 0.69 ac 3,164 SF 07/10/15 $675,000 5 beds; 3 baths Cathedral ceiling; hardwood floors;
Dr Jacuzzi ; 2-stories high, one brick
fireplace in family room; second
staircase to great room; full partially
finished basement; deck; patio; porch
Comparable 1, according to plaintiff was very similar to the Subject except for the covered
porch. Thus, its foyer, kitchen with the island (though larger than the Subject), bathroom, family
room, and the general condition, were similar to the Subject. He noted that the comparable was
located in a horseshoe shaped road, thus, on a much quieter street, in a development called Bailey’s
Corner Estates. It was on the market for 92 days.
Comparable 2 which is in the same neighborhood as Comparable 1. According to plaintiff,
this house, which is 1.7 miles from the Subject, had more modern amenities and upgrades than the
Subject, including a modern pool with landscaping, and a larger patio. The MLS pictures show
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the exterior style to be almost the same as the Subject’s, except for the addition on the Subject’s
second floor. The comparable was on the market for 185 days. Comparable 2’s back abuts onto
land designated as green acres.
Comparable 3 is two houses down the and on the same side of the street as the Subject,
about 0.1 miles in distance, thus, also in a cul-de-sac. According to plaintiff, the house had several
upgrades (such as a fancier patio and pristine landscaping). It was on the market for four days and
under contract for 88 days. Plaintiff was unaware of the reason for Comparable 3 being on the
market for only 4 days. According to the Township’s expert, who confirmed the details of the sale
with the selling broker, the comparable was priced to sell quickly between two-to-six weeks.
However, other than this factor, there was nothing to suggest that the sale was a non-arms-length
sale.
Plaintiff conceded that he had not personally reviewed the sale deeds for any comparables.
He desired a reduction in the Subject’s assessment to $635,000, based on the unadjusted sale prices
of the three comparables, maintaining that no significant adjustments would be needed because
they were similar in style, age, location, GLA, and amenities to the Subject.
The Township’s expert used six comparables (one of which was the same as plaintiffs’
comparable 3), all of which were colonial styled two-storied homes, had two-car attached garages,
central air-conditioning, and in the same R-30 zone as the Subject. They were built in the mid-to-
late 1990s, and about the same age as the Subject. He confirmed the sale details with the respective
real estate brokers. He did not personally inspect the interior of any comparable, however, stated
that he confirmed with the real estate brokers that the photographs of the comparables, as depicted
on the MLS website, were accurate portrayals of the comparables. The improved comparable sales
that he used are as follows:
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Address Lot GLA Date Price Room Amenities
1 1926 Troy Dr 0.69 ac 3,164 SF 07/10/15 $675,000 5 beds; 3 baths Deck; patio; fireplace;
full partially finished
basement
2 1480 Garrett Dr 0.71 ac 2,880 SF 05/29/15 $719,000 4 beds;2½ baths Pool; deck; fireplace; full
unfinished basement
3 2036 Fox Fld 0.70 ac 3,116 SF 08/31/15 $620,000 5 beds;2½ baths Pool; deck; fireplace; full
unfinished basement
4 1928 Troy Dr 0.71 ac 3,732 SF 08/13/16 $740,000 5 beds;3½ baths Pool; patio; porch;
fireplace; full partially
finished basement
5 1446 Garrett Dr 0.85 ac 3,164 SF 08/22/16 $752,000 4 beds;2½ baths Deck. Patio; pool;
fireplace; full unfinished
basement
6 1484 Garrett Dr 0.68 ac 3,016 SF 07/28/16 $695,000 4 beds;2½ baths Deck. Patio; pool;
fireplace; full unfinished
basement
He provided adjustments for GLA difference (at $100 per SF); bathroom count ($20,000
for full and $10,000 for half); finished basement ($5,000); pool ($10,000). The adjustments for
GLA and the amenities were derived from Marshall & Swift’s cost information, adjusted by
multipliers and reduced for depreciation. The expert also adjusted for lot size differences using
sales of four vacant buildable lots to extract an adjustment for “excess acreage” at $100,000 per
acre. These sales are:
Address List Price Sale Price Sale Date Size DOM
2502 Kipling Ave $239,900 $250,000 06/29/16 0.25 ac 4
1311 Allaire Rd $350,000 $285,000 09/14/16 2.29 ac 1398
1323 Magnolia Av $225,000 $225,000 04/16/15 0.17 ac 29
1550 Meetinghouse Rd $285,000 $282,500 06/27/14 0.75 ac 0
He used comparables 1 to 3 for tax year 2016 and adjusted their sale prices as follows: For
each comparable he increased the sale prices for the smaller lot size $31,000 (comparable 1);
$28,600 (comparable 2); and $30,000 (comparable 3). For comparables 1 and 3 he reduced the
sale prices for the larger GLA by $21,200 and $16,400, respectfully. To comparable 2 and 3, for
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the unfinished basement, he increased the sale prices by $5,000 each, and for the half-bathroom
less an increase of $10,000 each. For comparable 1’s quick sale, he increased the sale price by
10% or $67,500. To comparable 3, for its inferior condition, a reduction to its sale price by 10%
or $62,000. The adjusted sale prices were $762,300 (comparable 1); 762,600 (comparable 2); and
$710,000 (comparable 3) from which he derived a value of $745,000 for the Subject for tax year
2016.
He used comparables 4 to 6 for tax year 2017 and adjusted their sale prices as follows: to
each comparable for the smaller lot size, an increase of the sale prices by $29,000 (comparable 4);
$14,300 (comparable 5); and $31,100 (comparable 6). To adjust for the bathroom count, a
decrease of $10,000 to comparable 4’s sale price, and an increase of $20,000 1 to the sale prices of
comparables 5 and 6. For the larger GLA a reduction of $78,000 (comparable 4); $21,200
(comparable 5); and $6,400 (comparable 6). Further, he increased the sale prices of comparables
5 and 6 by $5,000 each for the comparables’ unfinished basement. The adjusted sale prices were
$688,000 (comparable 4); $770,000 2 (comparable 5); and $744,700 3 (comparable 6), from which
he concluded a value of $745,000 for the Subject for tax year 2017.
FINDINGS
“Original assessments and judgments of county boards of taxation are entitled to a
presumption of validity.” MSGW Real Estate Fund, L.L.C. v. Borough of Mountain Lakes, 18
N.J. Tax 364, 373 (Tax 1998). “Based on this presumption, the appealing taxpayer has the burden
of proving that the assessment is erroneous.” Pantasote Co. v. City of Passaic, 100 N.J. 408, 413
(1985). “The presumption of correctness . . . stands, until sufficient competent evidence to the
1
This is incorrect since he had assigned $10,000 as an adjustment for a half-bath.
2
Due to the incorrect adjustment for the half-bathroom lesser count, the total adjusted price should be $760,000.
3
Due to the incorrect adjustment for the half-bathroom lesser count, the total adjusted price should be $734,700.
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contrary is adduced.” Township of Little Egg Harbor v. Bonsangue, 316 N.J. Super. 271, 285-86
(App. Div. 1998).
A taxpayer can rebut the presumption by introducing “cogent evidence” which is evidence
that is “‘definite, positive and certain in quality and quantity.”’ Pantasote, 100 N.J. at 413 (citing
Aetna Life Ins. Co. v. Newark, 10 N.J. 99, 105 (1952)). Plaintiff must present the court with
“evidence sufficient to demonstrate the value of the subject property, thereby raising a debatable
question as to the validity of the assessment.” MSGW, 18 N.J. Tax at 376. Disagreement with an
assessment must be based on “sound theory and objective data,” rather than on “mere wishful
thinking.” Ibid. (internal quotations marks omitted).
Where the court has decided that the presumptive correctness is overcome (as it did here
at the end of plaintiffs’ proofs, by denying the Township’s motion to dismiss under R. 4:37-2), it
can find value based “on the evidence before it and the data that are properly at its disposal.”
F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418, 430 (1985). The complainant bears
the burden of persuading the court that the “judgment under review” is erroneous. Ford Motor Co.
v. Township of Edison, 127 N.J. 290, 314-15 (1992).
Both parties used the market approach (comparable sales), which is reasonable since it is
the generally accepted appraisal methodology to determine value of residential homes. See
Appraisal Institute, The Appraisal of Real Estate 377 (14th ed. 2013) (the comparable sales method
is generally appropriate for valuation of a residential property where value is derived “by
comparing similar properties that have recently sold with the property being appraised, identifying
appropriate units of comparison, and making adjustments to the sales prices . . . of the comparable
properties based on relevant, market-derived elements of comparison”). Market evidence must
support any element of comparison that causes “value differences.” Id. at 378.
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Plaintiffs’ 2014 sales for both tax years are two to four years earlier than each respective
assessment date, and considering the fact that there were other available sales in 2015 and 2016,
they will be given less weight for tax year 2016, and no weight for tax year 2017. 4 The Township’s
adjustments for amenities are properly substantiated and will be accepted. The court agrees with
plaintiffs that a 200 SF difference in GLA does not require an adjustment due to the negligible
impact on the sales prices for this area, although the Township’s expert’s method for extracting a
per SF amount was objectively supported, and will be used only to adjust his comparable 4 (for
tax year 2017) since 780 SF is a considerable size difference in GLA.
The court finds problematic the Township’s expert’s upward adjustment of 10% for the
commonly used comparable (1926 Troy Drive) for its “priced-for-quick-sale” factor. According
to the expert, in 2015 and in 2016, homes in the Subject’s neighborhood were all selling for over
$700,000, as evidenced by his five other comparable sales, with a typical time for market exposure
of seven months. Therefore, per the expert, this comparable was underpriced requiring an increase
in its sale price by 10% (based on the range of the per SF sales prices of the other comparables).
However, this theory is unpersuasive. First, it presumes that the court will accept the adjustments,
which increased the sale prices. Second, it is not supported by the unadjusted sale prices of the
expert’s comparables 2 and 3, both of which were located in the Subject’s neighborhood, and sold
for $719,000 and $620,000, respectively. Even if it were contended that the $620,000 comparable
should really be $680,000 (since the expert provided an upward 10% adjustment for its inferior
condition), it would still be below the alleged over $700,000 sale prices and indeed, closer to the
sale price of the commonly used comparable). Additionally, even if one were to consider the 2016
4
The unadjusted sale prices of plaintiffs’ three comparables also show a trend of a price increase, thus, it also could
be true that the 2014 sales would require a positive adjustment for market conditions.
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sales as a justification for the adjustment (keeping in mind that the assessor only used sales in 2015
for tax year 2016), comparable 6 sold for less than $700,000. More importantly, if the adjustment
is to make up for the alleged low-pricing or lack of market exposure, then it casts doubt as to
whether it is even a suitable comparable in the first place. Therefore, the expert’s 10% subjective
adjustment to the commonly used comparable’s sale price is rejected.
The court is also not persuaded that the expert’s comparable 3 should be adjusted upward
by $62,000 for inferior condition. First, the expert relied upon the MLS pictures for this
conclusion, and the broker’s statement that the comparable was dated. Second, a comparison of
the MLS pictures of this comparable with the pictures of the Subject tells this court that the
comparable’s interior appears to be in a similar condition as that of the Subject, which this court
has found to be in an average to good condition. Therefore, this adjustment for an inferior
condition as compared to the Subject is rejected.
As to the lot size adjustment, the court finds it problematic due to the source of the data.
There was no information whether the land sales were located in the same R-30 zone as the Subject
(which per the Township’s zoning ordinance has a minimum lot requirement of 30,000 SF or about
0.68 acres). The first and third lots were sized 0.25 and 0.17 acres. The court has no information
whether these would be even considered as buildable lots in the R-30 zone. 5 While land sale #2
had 2.29 acres (although the zone is unknown), it is problematic because it was sold as one lot,
with a promise, but no certainty of obtaining a minor sub-division (with a variance) to split it into
two buildable lots. Thus, as of its September 2016 sale date, it is unclear why the expert would
5
The County Board’s website lists the land sale with a non-usable (“NU”) code 10 (“sale by guardians, trustees,
executors, and administrators”). Land Sale #2 was also marked as NU-10.
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deem this to be a “similar sized buildable lot” as either the Subject or the other land sale
comparables. Land sale #4 is not credible since it was not even exposed to the market. 6
Based on the above analysis of adjustment removals, the adjusted sale prices of the expert’s
comapables 1 to 3 are $685,000; $734,000; $635,000. Placing least emphasis on plaintiffs’ 2014
comparables due to their remoteness to the assessment date, and most weight to sales closer to the
assessment date, the court finds Subject’s value for 2016 as $690,000.
For tax year 2017, with similar removals of adjustments, but retaining an adjustment for
the 780 SF of GLA difference between the Subject and the expert’s comparable 4, since this is a
sizable difference, and also reducing the half-bathroom adjustment, which is incorrectly by listed
the expert as $20,000 instead of $10,000 in comparables 5 and 6, the adjusted sale prices of the
expert’s comapables 4 to 6 are $652,000; $767,000; and $710,000. Placing equal weight to the
three sales, and none to plaintiffs’ 2014 comparables, due to their remoteness to the assessment
date, the court finds the Subject’s value in 2017 to be $700,000.
CONCLUSION
For the aforementioned reasons, the court reduces the 2016 and 2017 assessments of the
Subject to $690,000 and $700,000, respectively. An Order and final judgment will be entered
accordingly.
Very truly yours,
Mala Sundar, J.T.C.
6
Plaintiffs’ argument that a difference of 0.3 acres in a neighborhood, which requires 0.68 acre lot sizes, should not
require adjustment is well-taken. A review of both parties comparables does not appear to support a conclusion that
the market for homes located on lots sized about .70 acres will pay additional monies for a lot size difference of 0.30
acres.
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