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Property owner successfully rebuts assessor's determination of value.

Plaintiff appeals the real market value of his residence for the 2013-2014 tax year. The home, built in 2006, is a 3,558 square foot, two-story house with four bedrooms and three bathrooms. The home has an oversized two-car garage and sits on a 0.27-acre site.

The Lane County Assessor (Assessor) inspected the property and realized the records did not accurately reflect the size of the home and garage, as well as the number of bedrooms. The Assessor set the real market value at $571,333 ($119,556 allocated to land and $451,777 allocated to improvements). Plaintiff appealed to the local county board of property tax appeals (Board).

The Board reduced the real market value to $557,000. Plaintiff appealed requesting a further reduction in real market value to $400,000.

Plaintiff submitted three exhibits at trial. First, plaintiff submitted an excerpt from an appraisal report for the subject property. The report included five comparable sales, all located within a few blocks of the home. All of these comparable home sales occurred before January 1, 2013. Second, plaintiff submitted multiple listing service information for four of the five comparable sales. Third, plaintiff submitted a table showing the fluctuation of "the average and median sale prices for all homes sold in Greater Lane County, Oregon." The table showed a rise in prices from December 2003 to a peak in June 2007, followed by a decline in prices until sometime between December 2011 and June 2012, followed by a low rise in prices through June 2013.

The Assessor also submitted exhibits at trial. One of the Assessor's exhibits contained a value estimate of the house calculated by trending back to January 1, 2013, the sum of newly discovered improvements and the Assessor's January 1, 2014, value of the property. Another of the Assessor's exhibits was a table of comparable sales using six comparable homes.

The Oregon Tax Court found that plaintiff established the real market value of the property was $400,000 by a preponderance of the evidence, rebutting the Assessor's valuation of $571,333 and the Board's valuation of $557,000.

The court noted plaintiff used five comparable sales of homes in the same neighborhood to establish value, with four of the five being homes built around the same time as his property.

The Assessor argued that plaintiff's home sits on an 11,761-square-foot lot, whereas the comparable sales sit on lots between 6,534 square feet and 9,147 square feet. Plaintiff argued his lot is an irregularly shaped flag lot and that much of the square footage is not usable. The court reviewed aerial photographs and found plaintiff's explanation persuasive.

The Assessor argued that there were insufficient adjustments made to plaintiff's comparable sales for differences in the sizes of garages. Three of plaintiff's five comparable sales had negative adjustments of $7,500 for differences in garages compared to the subject property. There were no adjustments for the two comparable sales that had smaller garages. Plaintiff responded by noting the negative $7,500 adjustment to the three comparables was due to the fact that they had "true" three-car garages with capacity to hold three cars, whereas his home had an oversized two-car garage and the adjustment was only one or two percent. The court found plaintiff's explanation persuasive.

The court found the Assessor's method of adjusting the 2014 preliminary value determination by adding the newly discovered improvements and additional square footage and trending backwards to the value on January 1,2015 to be a "mechanical process without merit."

The court found the Assessor's sales comparable approach unpersuasive because of the Assessor's simplistic methodologies. The Assessor time trended six comparable sales, derived a per-square-foot value range, and extracted an average value per square foot, which she then multiplied by the size of the property to arrive at a value estimate for plaintiff's home. The Assessor did not make adjustments for the differences between the comparables and the subject property.

In summary the court found that plaintiff established the real market value of the property was $400,000.

Hansen v. Lane County Assessor

Oregon Tax Court, Magistrate Division

October 31, 2014

2014 WL 5501226

by Alan M. Weinberger, JD, and Megan Murphy, JD

Alan M. Weinberger, JD, has been a professor at Saint Louis University School of Law since 1987. Previously, he practiced for twelve years with law firms in Detroit and Washington, DC, where he specialized in real estate transfer, finance, and development. Weinberger graduated magna cum laude from the University of Michigan Law School. He has published articles and chapters in the fields of real estate finance, partnership, and property law. He Is coauthor of Property Law Cases, Materials and Problems, 3rd ed., published by West Group. His most recent article, "Tools of Ignorance: An Appraisal of Deficiency Judgments," was published in the Spring 2015 issue of the Washington and Lee Law Review. Contact:

Megan Murphy, JD, is an attorney in the Denver law firm of Hackstaff & Snow, LLC. She graduated magna cum laude from Saint Louis University School of Law where she was the Mel Friedman Fellow in Real Estate Law.
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Title Annotation:Recent Court Decisions
Publication:Appraisal Journal
Geographic Code:1U9OR
Date:Mar 22, 2015
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