Phebe D. Ham v. Board of Assessors of the Town of Concord (March 10, 2010)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


PHEBE D. HAM               v. 	   BOARD OF ASSESSORS OF     
	   THE TOWN OF CONCORD

Docket No. F298270				   Promulgated:
        						   March 10, 2010


This is an appeal filed under the informal procedure pursuant to G.L. c. 58A, § 7A and G.L. c. 59, §§ 64 and 65, from the refusal of the Board of Assessors of the Town of Concord ("appellee" or "assessors"), to abate taxes on certain real estate in the Town of Concord, owned by and assessed to Phebe D. Ham ("appellant" or "Ms. Ham") under G.L. c. 59, §§ 11 and 38 for fiscal year 2008 ("fiscal year at issue").
Commissioner Egan heard this appeal.  Chairman Hammond and Commissioners Scharaffa, Rose and Mulhern joined her in the decision for the appellant.  
	These findings of fact and report are made pursuant to requests by the appellant and appellee under G.L. c. 58A, § 13 and 831 CMR 1.32.

	Phebe D. Ham, pro se, for the appellant. 

	Kevin D. Batt, Esq. for the appellee.



			   FINDINGS OF FACT AND REPORT

Introduction and Jurisdiction
On the basis of the exhibits and testimony offered into evidence at the hearing of this appeal, the Appellate Tax Board ("Board") made the following findings of fact.  On January 1, 2007, the appellant was the owner of a 43,587 square-foot parcel of land, improved with a wood-framed, single-family home, located at 80 Musterfield Road in Concord, Massachusetts ("subject property").  For the fiscal year at issue, the assessors valued the subject property at $992,600 and assessed a tax thereon, at the rate of $10.72 per $1,000, in the total amount of $10,784.20.  On February 28, 2008, the Collector of Taxes for Concord mailed out the actual fiscal year 2008 tax bills.  The appellant timely paid the tax due without incurring interest.  On March 31, 2008, the appellant timely filed an abatement application with the assessors, which they denied on April 10, 2008.  On June 30, 2008, the appellant timely filed her appeal with the Board.    Based on the foregoing, the Board found and ruled that it had jurisdiction to hear and decide this appeal.  
The dwelling on the subject property is a one and one-half story structure built in what is known as the "Acorn style" in 1972.  It has a concrete foundation, vertical wood siding, and an asphalt-shingled roof.  The house has four rooms, including one bedroom, as well as one bathroom.  Interior features include vaulted ceilings, a ceramic-tiled fireplace, and hardwood and linoleum flooring.  The house has baseboard, electric heating, an electric hot water tank, and a 200-amp circuit breaker electrical system.  There is also an unfinished basement.  The total finished living area of the home is approximately 837 square feet.  
Prior Proceeding Concerning the Fiscal Year 2007 Assessment of the Subject Property

For fiscal year 2007, the fiscal year immediately preceding the fiscal year at issue, the assessors valued the subject property at $725,400.  Ms. Ham filed an application for abatement with the assessors contesting the assessed value of the subject property.  When that abatement application was denied, she filed an appeal under the informal procedure with the Board.  On the basis of the evidence of record in the fiscal year 2007 appeal, the Board found that the fair cash value of the subject property was $597,900, and therefore, issued a decision for the appellant in that appeal.  
C. The Assessors' Case-in-Chief
Because the assessors increased the subject property's assessment over the value determined by the Board for the preceding fiscal year, the burden of proof shifted to the assessors to show that an increase in value was warranted.  See G.L. c. 58A, § 12A.  To meet that burden, the assessors called three witnesses to testify on their behalf.  Those witnesses were Evelyn Masson, the Assessor for Concord; John Minty, the Building Commissioner for Concord; and John Neas, a certified real estate appraiser.  The Board found each of them to be credible.  Based on his education and experience, the Board qualified Mr. Neas as an expert residential real estate appraiser.  Mr. Neas' Summary Appraisal Report was also entered into the record.  
Ms. Masson testified that the assessors conducted a town-wide revaluation process in setting the fiscal year 2008 assessments.  Evidence entered into the record showed that the median value of a single-family residence in Concord increased from $718,550 in fiscal year 2007 to $735,650 in fiscal year 2008.  In addition, evidence was entered into the record establishing that the assessed value of the subject property had, in the past, been reduced to account for the parcel's slightly odd configuration.  Ms. Masson testified that the mass appraisal system used by the assessors no longer considered that criteria in setting the value of the subject property, and therefore, the same depreciation factor was not applied to the land value of the subject property for fiscal year 2008.    
Mr. Minty, who inspected the subject property and met with Ms. Ham prior to testifying at the hearing of this appeal, testified that the dwelling at 80 Musterfield Road was much smaller than the majority of the homes in the Nashawtuc Hill neighborhood of Concord, where the subject property is located.  Mr. Minty testified that, under applicable zoning requirements, the parcel could accommodate a house with over 4,000 square feet of living area, akin to the home on the adjacent lot at 74 Musterfield Road.  Mr. Minty substantiated this assertion by introducing a document with a plot plan of the subject property, onto which he superimposed a cut-out of the footprint of the home at 74 Musterfield Road.  Mr. Minty also testified that he conducted a similar exercise using footprints of other, larger, homes in the subject's neighborhood to show that local zoning would allow for the parcel to be developed to accommodate those homes.  Accordingly, Mr. Minty concluded that the subject property's dimensional constraints would not preclude the construction of a home much larger than the home on the subject parcel.  
Mr. Neas, who inspected the subject property as part of his appraisal, testified that Nashawtuc Hill is surrounded by three rivers, which limit vehicular access to the neighborhood.  Mr. Neas noted that, because of its setting, Nashawtuc Hill enjoys a tranquility and natural beauty, yet is conveniently located close to the town center, commercial shops, and transportation.  Mr. Neas opined that Nashawtuc Hill is one of the most desirable neighborhoods in Concord.  
Mr. Neas found the highest and best use of the subject property to be its use as a newly constructed, single-family residence, comparable to other, larger residences in the Nawshatuc Hill neighborhood.  In valuing the subject property, Mr. Neas considered the three usual approaches to value, but concluded that the sales-comparison analysis was the most appropriate method with which to value the subject property.  
Mr. Neas initially selected sales of fourteen different properties for comparison, but ultimately focused on seven sales, all of which took place in Concord between September 15, 2005 and September 14, 2007.  The following tables contain the relevant data for those seven sales as well as Mr. Neas' adjustments thereto:
















MR. NEAS' SALES-COMPARISON PROPERTIES ONE THROUGH FOUR

	Subject Property	118 Fairhaven 
Road	Adj.
($)	24 
Southfield 
Road	Adj.
($)	236 
Garfield 
Road	Adj.
($)	162 
Indepen-dence
Road
	Adj. ($)		Sale Date	N/A	9/2005		11/2005		8/2007		4/2007			Sale 
Price ($)	N/A	511,750		530,000		680,000		778,000			Apprec. ($)	N/A 	 	-31,984		-29,150		 23,800		 11,670		Location	Very Good	Good	255,875	Good	212,000	Good	136,000	Good	155,600		Lot Size 
(sq. ft.)	43,587	 21,020	 25,000	14,600	 35,000	1.43 acres	-25,000	22,047	 25,000		View	Good	Good		Good		Good		Good			Design	Contemp.	Ranch		Cape/Ranch		Contemp.		Ranch			Quality	Good	Good		Good		Good		Good			Year Built	1972	1954		1958		1976		1950			Condition	Average 	Good	-25,000	Average		Average		Average			Rooms/Beds
Baths	4/1/1	5/2/1		4/2/1		5/3/1.5	 -5,000	5/2/2	-10,000		Living Area	1,008	1,110		884		861		1,213	-20,500		Basement	Unfinished	Playroom	 -5,000	None	 25,000	Finished	-25,000	Unfinished			Heating/
Cooling	Electric/
None	Hot Water/
None		Hot Water/
None		Hot Water/
None		Hot Air/
None			Garage	None	2-car detach.	-20,000								Porch/
Patio/
Deck	Deck Area	Patio		Screen Porch	 -2,500	Screen 
Porch	 -2,500	Screen Porch	 -2,500		Fireplace	Fireplace	Fireplace		Fireplace		Fireplace		Fireplace			Total Adjustment 			198,891		240,350		 97,300		149,270		Indicated Value ($)		710,641		770,350		777,300		927,270			







	Subject Property	63 Revolutionary Road
	Adj. ($)	201 Independence 
Road	Adj. ($)	291 
Musterfield
Road	Adj. ($)		Sale Date	N/A	4/2007		5/2006		9/2007			Sale Price ($)	N/A	831,000		875,000		1,575,000			Apprec.
($)	N/A		 12,465		-26,250		 -55,125		Location	Very Good	Good	166,200	Good	175,000	Very Good			Lot Size 
(sq. ft.)	43,587	20,000	 25,000	2.39 acres	-75,000	2.6 acres	 -75,000		View	Good	Good		Good		Good			Design	Contemp.	Cape/Ranch		Ranch		Contemp.			Quality	Good	Good		Good		Good			Year Built	1972	1955		1943		1976			Condition	Average 	Good	-25,000	Average		Good	-100,000		Rooms/Beds/
Baths	4/1/1	6/3/2	-10,000	6/2/2	-10,000	9/3/2.5.5	 -20,000		Living Area	1,008	1,390	-38,200	1,653	-64,500	3,493	-248,500		Basement	Unfinished	Playroom	 -5,000	None	 25,000	2 Finished Rooms	  20,000		Heating/
Cooling	Electric/
None	Hot Water/
None		Hot Water/
None	 	Hot Air/
Central Air	  20,000		Garage	None	2-Car Attached	 20,000	1-Car Detached	 10,000	2-Car Attached	  20,000		Porch/
Patio/
Deck	Deck	Screen Porch	 -2,500	Screen Porch	-2,500	Deck			Fireplace	Fireplace	Two Fireplaces	 -$5,000	Fireplace		Two Fireplaces	 -$5,000		Total Adjustments			 97,965		11,750		-453,375		Indicated Value		928,965		886,750		1,121,625			MR NEAS'SALES-COMPARISON PROPERTIES ONE THROUGH FOUR


Based on his sales-comparison analysis, Mr. Neas' opinion of the fair cash value for the subject property for fiscal year 2008 was $950,000, or $42,600 less than its assessed value.  
D. The Appellant's Case-in-Chief
	Ms. Ham testified on her own behalf at the hearing of this appeal and also offered the testimony of James Doherty, a real estate appraiser, who assisted Ms. Ham in presenting her case.  
In addition to the testimony of these two witnesses, Ms. Ham offered several exhibits into evidence at the hearing of this appeal.  Those documents included: a Town of Concord Proposed Budget Summary for Fiscal Year 2010; a plot plan of the subject property with building footprint; two documents entitled "FY08 Qualified Sales - Single Family Residences, Concord, MA"; various property record cards for the subject property and other properties in Concord; and, finally, a sales-comparison analysis featuring three properties in addition to the subject property, along with the property record cards and/or MLS sales information for the three sales-comparison properties.  
	The sales-comparison properties offered by Ms. Ham were all single-family residences in Concord which sold between February and August of 2006, with sale prices ranging from $625,000 to $765,000.  However, no adjustments were made to the sale prices of these properties to account for differences with the subject property.  For example, although the appellant's sales-comparison chart acknowledged that the subject property had a superior location to each of the sales-comparison properties, no adjustment was made to account for the difference in location.  
Ms. Ham opined that the highest and best use of the subject property was its continued use as a single-family residence.  Ms. Ham's opinion of value for the subject property for fiscal year 2008 was $625,000.
E. The Board's Ultimate Findings of Fact
	On the basis of all of the evidence, the Board found and ruled that the highest and best use of the subject property was its continued use as a single-family residence.  Because the fiscal year 2008 assessed value of the subject property exceeded its fair cash value as determined by the Board for fiscal year 2007, the assessors had the burden to show that the increase was warranted in the present appeal.  The Board found that the assessors presented substantial, credible evidence to show that the fair cash value of the subject property was in excess of the value determined by the Board for the previous fiscal year.   
	The Board found Mr. Neas' testimony and sales-comparison analysis to be highly probative evidence of the subject property's fair cash value.  Mr. Neas selected a number of comparable properties and made appropriate adjustments to account for differences between those properties and the subject property.  
Specifically, the Board found Mr. Neas' analysis of three properties in Concord - 236 Garfield Road, 162 Independence Road, and 63 Revolutionary Road - to be highly persuasive.  Those three properties sold for between $680,000 and $831,000 in 2007, and the dwellings on each property were raised for the construction of newer, larger homes.  Mr. Neas considered the location of those three properties "good," while he considered the subject property's location "very good."  Moreover, the lot size of 162 Independence Road, which sold for $778,000, was nearly half the size of the subject property's lot.  The Board found that the sale prices of these comparable properties provided strong support for the land valuation of the subject property, which was $895,400, and also provided persuasive evidence of the overall fair cash value of the subject property.  
Further, the Board found that evidence in the record concerning other properties on Musterfield Road provided strong support for Mr. Neas' opinion of value.   291 Musterfield Road was purchased for $1,575,000 in 2007.  Although the dwelling was not demolished following the purchase, significant renovations and an addition were added to the dwelling thereafter.   In addition, although he did not use it in his sales-comparison analysis, Mr. Neas included information in his appraisal report about 191 Musterfield Road.  That property sold for $1,775,000 in January of 2007, almost simultaneously with the relevant date of assessment for the fiscal year at issue in this appeal.  191 Musterfield Road was demolished for the construction of a new home with over 10,000 square feet of gross living area.  
Finally, the property record card for 74 Musterfield Road, which abuts the subject property, was entered into the record.  For fiscal year 2008, the assessed land value of 74 Musterfield Road was $1,126,200 for a lot size of 1.79 acres.  This valuation was generally consistent with the subject's land valuation, which was $895,400 for approximately 43,587 square feet of land. The Board found that this evidence, regarding the property directly adjacent to the subject property, supported both the assessed land value of the subject property, which was $895,400, as well as Mr. Neas' overall opinion of value for the subject property.  
Accordingly, the Board agreed with Mr. Neas' well-supported opinion of value, and found that the fair cash value of the subject property for fiscal year 2008 was $950,000.
Although the assessors had the burden of proof in the present appeal, the burden of persuasion remained with the appellant.  The appellant's opinion of the subject property's fair cash value for fiscal year 2008 was $625,000.  However, the evidence offered by the appellant failed to successfully rebut the evidence presented by the assessors or otherwise establish that the fair cash value of the subject property was $625,000.    
The sales-comparison analysis offered by the appellant made no adjustments to account for differences between the sales-comparison properties and the subject property.  In particular, although the appellant acknowledged that the location of the subject property was superior to that of her comparable properties, she made no adjustments to account for this difference.  Mr. Neas stated in his report, and the Board found, that the value of real property in Concord was greatly impacted by its location.  Moreover, there was substantial, credible evidence that the subject property's Nawshatuc Hill neighborhood was among the most prestigious locations in Concord.  The Board therefore found that the appellant's failure to account for the subject property's superior location significantly undermined the reliability of her sales-comparison analysis.  
 	On the basis of all of the evidence, the Board found and ruled that the fair cash value of the subject property for fiscal year 2008 was $950,000.  Because the assessed value of the subject property for fiscal year 2008 was $992,600, the Board decided this appeal for the appellant, and ordered an abatement of $463.52.  

				    OPINION
Assessors are required to assess real estate at its fair cash value as of the first day of January preceding the fiscal year at issue.  G.L. c. 59, § 38.  Fair cash value is defined as the price upon which a willing buyer and a willing seller will agree if both are fully informed and under no compulsion.  Boston Gas Co. v. Assessors of Boston, 334 Mass. 549, 566 (1956).  
The appellant has the burden of proving that the property has a lower value than that assessed. "'The burden of proof is upon the petitioner to make out its right as [a] matter of law to [an] abatement of the tax.'" Schlaiker v. Assessors of Great Barrington, 365 Mass. 243, 245 (1974) (quoting Judson Freight Forwarding Co. v. Commonwealth, 242 Mass. 47, 55 (1922)). "[T]he Board is entitled to 'presume that the valuation made by the assessors [is] valid unless the taxpayers . . . prove the contrary.'" General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 598 (1984) (quoting Schlaiker, 365 Mass. at 245).
If, however, within the two preceding fiscal years, the Board has determined the fair cash value of the subject property and the assessment at issue exceeds the Board's prior determination, then "the burden shall be upon the [assessors] to prove that the assessed value was warranted." G.L. c. 58A, § 12A. The Board took judicial notice of its fiscal year 2007 decision and finding of value and ruled in this appeal that the burden of justifying the increase in the assessment from the previous fiscal year was on the assessors. See generally Beal v. Assessors of Boston, 389 Mass. 648 (1983); see also Cressey Dockham & Co., Inc. v. Assessors of Andover, Mass. ATB Findings of Fact and Reports 1989-72, 86-87 ("Once a prior determination of the Board of the fair cash value of the same property [for one of the prior two fiscal years] has been placed in evidence . . . the statute requires the [assessors] to produce evidence to 'satisfy the Board that the increased valuation was warranted.'")  
The fair cash value of property may be determined by recent sales of comparable properties in the market. McCabe v. Chelsea, 265 Mass. 494, 496 (1929).  Actual sales generally "furnish strong evidence of market value, provided they are arm's-length transactions and thus fairly represent what a buyer has been willing to pay for the property to a willing seller." Foxboro Associates v. Assessors of Foxborough, 385 Mass. 679, 682 (1982); New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 469 (1981); First National Stores, Inc. v. Assessors of Somerville, 358 Mass. 554, 560 (1971).  
	In the present appeal, the assessors offered the testimony and report of their expert appraiser, John Neas, which featured an analysis of seven comparable properties that sold in Concord between September 15, 2005 and September 14, 2007. The Board found that Mr. Neas made appropriate adjustments to account for differences between those seven properties and the subject property.  The adjusted sales prices of those properties ranged from $710,641 to $1,121,625, and his opinion of value of the subject property, $950,000, was in the middle of that range.    
The Board found particularly persuasive evidence regarding the sales of 236 Garfield Road, 162 Independence Road, and 63 Revolutionary Road in Concord.  Those properties were sold in 2007 for prices ranging from $680,000 to $831,000, and the dwellings on each property were demolished following the sale for the construction of a newer, larger home.  Although the sales prices of these three properties were lower than the assessed value of the subject property for fiscal year 2008, the Board noted that the three properties were located in less desirable neighborhoods than the subject property, and, at least one of those properties had a lot size which was approximately half that of the subject property.    
In addition, sales and assessment data regarding several properties located on the same street as the subject property provided strong support for Mr. Neas' opinion of value.  291 Musterfield Road sold for $1,575,000 in September of 2007.  Although it was not demolished following its sale, it underwent a substantial renovation, including a large addition to the dwelling.  191 Musterfield Road sold for $1,775,000 in January of 2007, and was demolished for the construction of a home with over 10,000 square feet of living area.  These properties were located on the same street as the subject property and were sold close to the relevant date of assessment.  The Board found this data to be probative evidence of the fair cash value of a parcel similar in location to the subject property.  
Finally, the property record card for 74 Musterfield Road, which abuts the subject property, was entered into evidence.  For fiscal year 2008, the land value of 74 Musterfield Road was $1,126,200 for a lot size of 1.79 acres.  The Board found that this valuation was consistent with the subject's land valuation, which was $895,400 for approximately 43,587 square feet of land.  Further, the Board found that this evidence also provided support for Mr. Neas' valuation of the subject property.  Based on the foregoing, the Board adopted Mr. Neas' well-supported opinion of value and found and ruled that the fair cash value of the subject property for fiscal year 2008 was $950,000.  
Notwithstanding the shift in the burden of production in the present appeal, the burden of persuasion on the issue of fair cash value remained on the appellant. See Johnson v. Assessors of Lunenburg, Mass. ATB Findings of Fact and Reports 1992-1, 8; Cressey Dockham, Mass. ATB Findings of Fact and Reports 1989 at 86-87. "In appeals before this Board, a taxpayer 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., 393 Mass. at 600 (quoting Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983)).  The Board found and ruled in the present appeal that the appellant failed to present sufficient evidence of value to rebut the evidence presented by the assessors.  
The evidence introduced by the appellant did not support the conclusion that the subject's land valuation was excessive, nor did it convince the Board that the subject property's overall fair cash value was less than $950,000.  The vast majority of the subject assessment lay in its land value, which was $895,400.  The Board found and ruled that there was substantial evidence in the record to support that valuation, particularly the evidence regarding 236 Garfield Road, 162 Independence Road, and 63 Revolutionary Road, as well as the other properties located on the same street as the subject.  
In her testimony and documentary submissions in this appeal, Ms. Ham emphasized the modesty of her four-room home.  Assessed value, however, is based upon a property's fair market value, or in other words, the price the property would command if it were put on the market.  See generally Boston Gas Co., 334 Mass. at 566.  The evidence of recent sales of comparable properties in Concord, including sales of properties on Musterfield Road, established that the fair market value of the subject property was $950,000.  
	On the basis of all of the evidence, the Board found and ruled that the fair cash value of the subject property for fiscal year 2008 was $950,000.  Because the assessed value of the subject property for fiscal year 2008 was $992,600, the Board decided this appeal for the appellant, and granted an abatement of $463.52.
  
                          THE APPELLATE TAX BOARD


By: __________________________________
                       Thomas W. Hammond, Jr., Chairman






A true copy,

Attest:  ________________________________
              		 Clerk of the Board

 The appellant originally filed a petition under the informal procedure with the Board.  Subsequently, on July 21, 2008, the assessors elected to transfer this appeal to the formal docket.  Pursuant to G.L. c. 58A, § 7, the assessors, "within 30 days of the date of service of the [petition], may elect to have the appeal heard under the formal procedure."  
 Ms. Ham is the Trustee of the Phebe D. Ham Revocable Trust, which is the record owner of the subject property.  
 This amount includes a Community Preservation Act Tax. 
 Per G.L. c. 59, §§ 59 and 57C, when assessors have mailed the actual tax bills after December 31st, taxpayers have until the later of May 1st or 30 days from the date of mailing to file an abatement application.  The appellant's abatement application was therefore timely filed on March 31, 2008.  
 The Board took judicial notice in the present appeal of its decision and finding of value in the fiscal year 2007 appeal.  
 There was a slight discrepancy between the subject property's gross living area as reported by Mr. Neas and as recorded on the property record card.  The Board found that the property record card was the most reliable evidence of the gross living area of the subject property, and therefore found that it had 837 square feet.   

ATB 2010-238