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Taxpayer challenge denied due to untimely, unsupported financing appraisal.

Galina Jakobovitch sought to reduce the valuation assigned to her property by Cuyahoga County. The Cuyahoga County Board of Revision (BOR) and the Board of Tax Appeals (BTA) both retained the fiscal officer's valuation. Jakobovitch appealed the BTA's decision, on both value-related arguments and procedural arguments. The Beachwood City School District Board of Education (BOE) sought retention of the fiscal officer's valuation.

Jakobovitch's property is a single-family dwelling situated on a roughly 0.45-acre parcel in Beachwood. For tax year 2013, Jakobovitch filed a complaint seeking to reduce the fiscal officer's valuation of the property from $1,429,100 to $850,000. Although Jakobovitch also presented a financing appraisal of $1,050,000 as of July 2010, the appraiser did not appear to testify at any of the proceedings.

At the BOR proceedings, when asked to justify a valuation of $850,000, Jakobovitch's counsel responded that the request was "just a prayer," but cited a limited market for the subject property due to both the excessive size and the religious features of the house. No analysis was offered to quantify how these attributes affect the property's value. The BOE argued that the financing appraisal that Jakobovitch submitted should be discounted because the appraisal did not value the property as of the 2013 tax-lien date, the appraiser did not appear to testify, and the comparables identified in the appraisal were not located near the subject property. The BOR retained the fiscal officer's valuation. Jakobovitch appealed to the BTA. After the BTA affirmed the fiscal officer's valuation Jakobovitch appealed to the court.

Jakobovitch argued most prominently that the BTA misapplied the standards governing her burden of proof. The court noted that case law provided that "the party challenging the board of revision's decision at the BTA has the burden of proof to establish its proposed value as the value of the property." And "The burden is on the taxpayer to prove his right to a deduction. He is not entitled to the deduction claimed merely because no evidence is adduced contra his claim." To meet that burden, the appellant must furnish "competent and probative evidence" of the proposed value.

Jakobovitch argued that the BTA erred in disregarding her July 2010 financing appraisal. But the court, which had confronted a similar argument under analogous circumstances before, reached the opposite results.

First, the appraisal submitted by Jakobovitch opined a value as of July 2010 and did not coincide with the 2013 tax-lien date. The court noted that the vintage of an appraisal matters because "the essence of an assessment is that it fixes the value based upon facts as they exist at a certain point in time." Second, the court noted that Jakobovitch "did not introduce testimony alongside [her] appraisal to explain its application to the tax-lien date." Lastly, the appraisal was performed for financing purposes. The court found that in the absence of supporting testimony, applying a financing appraisal in the tax-valuation setting is problematic because it may not necessarily represent a "complete and thorough evaluation of the property." The court affirmed the BTA's decision.

by Scott B. Mueller, JD

Jakobovitch v. Cuyahoga County Board of Revision

Supreme Court of Ohio

December 6, 2017

2017 WL 6048255
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Title Annotation:Recent Court Decisions on Real Estate and Valuation
Author:Mueller, Scott B.
Publication:Appraisal Journal
Geographic Code:1U3OH
Date:Mar 22, 2018
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