Tadeusz & Janina Surowiec v. Board of Assessors of the City of Chicopee (June 21, 2011)

			COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



TADEUSZ & JANINA SUROWIEC 	v.      BOARD OF ASSESSORS OF
							   THE CITY OF CHICOPEE

Docket No. F305246				   Promulgated:
							        June 21, 2011


	This is an appeal filed under the formal procedure pursuant to G.L. c. 58A, § 7 and G.L. c. 59, §§ 64 and 65 from the refusal of the appellee to abate a tax on real estate in the City of Chicopee owned by and assessed to the appellants under G.L. c. 59, §§ 11 and 38, for fiscal year 2010.
	Commissioner Egan heard this appeal under G.L. c. 58A, § 1A and 831 CMR 1.20, and issued a single-member decision for the appellee.  
	These findings of fact and report are made pursuant to a request by the appellants under G.L. c. 58A, § 13 and 831 CMR 1.32.

	Tadeusz Surowiec, pro se, for the appellants.
	Laura McCarthy, assessor, for the appellee.

FINDINGS OF FACT AND REPORT
	On January 1, 2009, Tadeusz and Janina Surowiec (the "appellants") were the assessed owners of a parcel of real estate, improved with a four-family house, located at 76 Park Street in the City of Chicopee (the "subject property").  For fiscal year 2010, (the "fiscal year at issue") the Board of Assessors of Chicopee (the "assessors") valued the subject property at $157,900 and assessed a tax thereon at the rate of $13.63 per thousand, in the amount of $2,152.18.  The assessors attributed $44,300 to the subject property's land component and $113,600 to its building component.  
On November 14, 2009 and April 1, 2010, Chicopee's City Collector mailed the first- and second-half real estate tax bills, respectively.  The appellants timely paid the first-half tax, but incurred $13.62 of interest on the second-half tax.  The Presiding Commissioner ruled, however, that where, as here, the yearly tax payment is $3,000 or less, timely payment is not a prerequisite for the jurisdiction of the Appellate Tax Board (the "Board").  See G.L. c. 59, §§ 64 and 65 (providing, in pertinent part that: "if the tax due for the full fiscal year on a parcel of real estate is more than $3,000, said tax shall not be abated unless the full amount of said tax due has been paid without the incurring of any interest charges.").  On December 4, 2009, the appellants timely filed with the assessors an Application for Abatement.  The assessors denied the abatement application on December 22, 2009, and on March 22, 2010, the appellants seasonably filed a Petition Under Formal Procedure with the Board.  On the basis of these facts, the Presiding Commissioner found and ruled that the Board had jurisdiction over this appeal.
The subject property consists of a 0.115-acre parcel of real estate improved with a 2,710-square-foot, two-story four-family house that was built circa 1900.  The house contains a total of two two-bedroom and two one-bedroom units.  There is one two-bedroom unit and one one-bedroom unit on each 1,355-square-foot floor.   There is also a 1,446-square-foot unfinished basement.  The bathrooms and kitchens were renovated about ten years ago.  The exterior has asbestos siding.
The appellants claimed that the subject property was overvalued by $37,000.  However, the Presiding Commissioner found that they failed to introduce sufficient evidence to support that contention.  They simply relied on testimony that one unit was vacant, another was rented for a nominal amount to their son, the third was owner occupied, and the fourth was rented for $600 per month.  They did not introduce any documentary evidence - no comparable-sale or comparable-assessment information, no complete actual or market income and expense data, no deeds, and no property record cards for the subject property or other properties.       
	In support of their assessment, the assessors offered into evidence testimony, property record cards, and photographs pertaining to the subject property and several other multi-family properties in Chicopee.  The Presiding Commissioner found that two of these properties, 21 and 42 Abbey Street, were sufficiently comparable to the subject property.  Those two properties were assessed at $203,600 and $179,100, respectively, compared to the subject property's assessment of $157,900.  The assessors also supported the subject property's assessment with an income approach which assumed a market rent of $550 per unit, based on income and expense submissions from other local taxpayers with purportedly comparable properties.  The assessors' income approach resulted in an indicated value in excess of the assessment.
	Based on the testimony and exhibits offered into evidence, the Presiding Commissioner found that the appellants failed to meet their burden of proving that the subject property was overvalued for the fiscal year at issue.  The appellants offered no documentary evidence and essentially relied on the near bare assertion that the property was overvalued.  To the extent that they tried to demonstrate that the property earned little income and should therefore have a lower value, the Presiding Commissioner found that they did not show that any of the units were uninhabitable, unrentable, subject to governmentally imposed or deed restrictions, or only capable of earning below-market rent.  Rather, the Presiding Commissioner found that they only showed that one unit was vacant, a second unit earned below-market rent because it was rented to their son, and a third unit had no income because the appellants used it as their home.  The fourth unit earned more than the fair market rental that even the assessors had attributed to it in their income approach.  Moreover, the Presiding Commissioner found that the comparable-assessment information relating to at least two other multi-family rental properties in Chicopee offered into evidence by the assessors supported the subject property's assessment, as did the value derived from the assessors' income approach.  
Based on all of the evidence, the Presiding Commissioner found that the appellants failed to meet their burden of proving that the subject property was overvalued for the fiscal year at issue.  The Presiding Commissioner further found that the evidence submitted by the assessors supported the assessment.  Accordingly, the Presiding Commissioner issued a decision for the appellee.

OPINION
	The assessors are required to assess real estate at its fair cash value.  G.L. c. 59, § 38.  Fair cash value is defined as the price on which a willing seller and a willing buyer will agree if both of them are fully informed and under no compulsion.  Boston Gas Co. v. Assessors of Boston, 334 Mass. 549, 566 (1956).
	The assessment is presumed valid unless the taxpayers sustain their burden of proving otherwise.  Shlaiker v. Board of Assessors of Great Barrington, 356 Mass. 243, 245 (1974).  Accordingly, the burden of proof is upon the appellants to make out their right as a matter of law to an abatement of the tax.  Id.  The appellants must show that the assessed valuation of their property was improper.  See Foxboro Associates v. Board of Assessors of Foxborough, 385 Mass. 679, 691 (1982).  In appeals before this Board, appellants "may present persuasive evidence of overvaluation either by exposing flaws or errors in the assessors' method of valuation or by introducing affirmative evidence of value which undermines the assessors' valuation."  General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 600 (1984).
In their attempt to prove that the subject property was overvalued for the fiscal year at issue, the appellants offered no documentary evidence, and the Presiding Commissioner found that they essentially relied on the near bare assertion that the property was overvalued.  Unsubstantiated assertions do not carry the day.  See e.g., Brook Road Corp. v. Assessors of Needham, Mass. ATB Findings of Fact and Reports 2001-648, 657 (finding and ruling that the taxpayer's analysis was flawed and unreliable because it failed "to present any deeds or any other documentation to substantiate its . . . suppositions.").    
To the extent that the appellants tried to demonstrate that the property earned little income and should therefore have a lower value, the Presiding Commissioner found that they did not show that any of the units were uninhabitable, unrentable, subject to governmentally imposed or deed restrictions, or only capable of earning below-market rent.  Rather, the appellants simply showed that one unit was vacant, a second unit earned below-market rent because it was rented to their son, and a third unit earned no income because the appellants used it as their home.  The subject property's fourth unit earned more than the fair market rental value that even the assessors had attributed to it in their income approach.  Based on this record, the Presiding Commissioner found and ruled that the appellants did not adequately demonstrate that the subject property was incapable of earning market rents and therefore should have a lower value than its assessment. 
In making her finding and ruling, the Presiding Commissioner was guided by the now familiar principal that in determining the fair cash value of a property's fee-simple interest, the assessors and this Board should not reduce the fee-simple value of real property to account for below-market leases.  See Donovan v. City of Haverhill, 247 Mass. 69, 72 (1923) ("We do not think a determination of the fair cash valuation of real estate requires the assessors to make such a deduction [for the surrender value of a below-market lease]."); see also, Sisk v. Assessors of Essex, 426 Mass. 651, 654 (1998) ("[W]e have previously rejected a taxpayers' argument that a lease constituted an encumbrance that diminished the property's value for tax assessment purposes.")(citing Donovan, 247 Mass. at 71); accord Pepsi-Cola Bottling Co., 397 Mass. at 450.  It is the earning capacity of real estate, rather than its actual income, which is probative of fair market value. See Assessors of Quincy v. Boston Consolidated Gas Co., 309 Mass. 60, 64 (1941).    
The Presiding Commissioner further found that the comparable-assessment information for at least two properties in Chicopee and the income-approach value offered into evidence by the assessors were reliable indicators of the subject property's fair cash value and supported the subject property's assessment for the fiscal year at issue.  "At any hearing relative to the assessed fair cash valuation . . . of property, evidence as to the fair cash valuation . . . of property at which the assessors have assessed other property of a comparable nature or class shall be admissible."  G.L. c. 58A, § 12B.  The introduction of assessment evidence may provide adequate support for either the granting or denial of an abatement.  Chouinard v. Assessors of Natick, Mass. ATB Findings of Fact and Reports 1998-299, 307-308 (citing Garvey v. Assessors of West Newbury, Mass. ATB Findings of Fact and Reports 1995-129, 135-36; Swartz v. Assessors of Tisbury, Mass. ATB Findings of Fact and Reports 1993-271, 279-80); see also Turner v. Assessors of Natick, Mass. ATB Findings of Fact and Reports 1998-309, 317-18.  Additionally, an income approach is an acceptable method to use to value an income-producing property, like a multi-family residential dwelling. See Finer Realty Trust, Philip Finer, Trustee v. Assessors of Mansfield, Mass. ATB Findings of Fact and Reports 2008-1009, 1037-40 (acknowledging the acceptability of using an income approach to value a five-family dwelling, but instead using a sales-comparison approach because of better underlying market data); cf. Assessors of Lynnfield v. New England Oyster House, Inc., 362 Mass. 696, 698-701 (1972); Assessors of Weymouth v. Tammy Brook Co., 368 Mass. 810 (1975) (rescript).      
"The Board is not required to believe the testimony of any particular witness nor to adopt any particular method of valuation that an expert witness may suggest, but can accept those portions of the evidence which the Board determines have the more convincing weight."  Foxboro Associates, 385 Mass. at 683; New Boston Garden Corp. v. Board of Assessors of Boston, 383 Mass. 456, 473 (1981); Assessors of Lynnfield v. New England Oyster House, Inc., 362 Mass. 696, 701-702 (19721).  "The credibility of witnesses, the weight of evidence, and the inferences to be drawn from the evidence are matters for the Board."  Cummington School of the Arts, Inc. v. Assessors of Cummington, 373 Mass. 597, 605 (1977). 
Based on this record, these facts, and her subsidiary findings, the Presiding Commissioner found and ruled that the appellants failed to meet their burden of proving that the subject property was overvalued for the fiscal year at issue and, moreover, the evidence submitted by the assessors supported the assessment.  
Accordingly, the Presiding Commissioner issued a decision for the appellee.

					       APPELLATE TAX BOARD

					   By:			_			
					       Nancy T. Egan, Commissioner


A true copy,


Attest:			_____		
	      Clerk of the Board

ATB 2011-618