Hassan & Jean O. Afzali v. Board of Assessors of the Town of Plymouth (May 1, 2008)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


HASSAN & JEAN O. AFZALI       v.      BOARD OF ASSESSORS OF                        
							   THE TOWN OF PLYMOUTH
 
Docket No. F281350				   Promulgated:
		  		   			   May 1, 2008

	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 Board of Assessors of the Town of Plymouth ("appellee" or "assessors") to abate taxes on real estate located in the Town of Plymouth, owned by and assessed to appellants Hassan and Jean O. Afzali ("appellants") under G.L. c. 59, §§ 11 and 38, for fiscal year 2005.
Commissioner Gorton heard this appeal. With Commissioner Gorton materially participating in the deliberations of this appeal, Chairman Hammond and Commissioners Scharaffa, Egan, Rose, and Mulhern joined in the decision for the appellee.
These findings of fact and report are made on the Appellate Tax Board's ("Board's") own motion under G.L. c. 58A, § 13 and 831 CMR 1.32 and are promulgated simultaneously with its decision.

Hassan & Jean O. Afzali, pro se, for the appellants.
Cathy Salmon, assessor, for the appellee.

FINDINGS OF FACT AND REPORT
On January 1, 2004, appellants Hassan and Jean O. Afzali were the assessed owners of a parcel of real estate located at 123G Taylor Avenue in the Town of Plymouth ("subject property"). The parcel has a land area of 4356 square feet and is improved with a contemporary cottage-style dwelling. The subject property is situated at White Horse Beach, and is bounded by Cape Cod Bay on the east and Plymouth Bay on the west. 
The actual tax bill for the subject property was sent on December 31, 2004. Taxes due were timely paid without incurring interest. Appellants filed an Application for Abatement on January 31, 2005. The application was denied by a vote of the assessors on April 19, 2005. Appellants timely filed a Petition Under Formal Procedure with the Board on July 14, 2005. The foregoing facts establish the Board's jurisdiction over this appeal.
The assessed value of the subject property for fiscal year 2005 was $618,000. Of that total, $387,800 was attributable to the subject land, and $230,200 to the residence, according to information retrieved from the Internet by appellants. The structure has a wood shingle exterior and asphalt shingles cover the roof. The foundation is concrete. The dwelling is three-storied and has a total of nine rooms, including four bedrooms. There are two-and-one-half baths and the gross living area is 2,148 square feet. The kitchen and bathrooms are modern and have vinyl flooring, while the bedrooms are carpeted. The residence has gas-heat, was constructed approximately in 1993, and has a deck and a porch. The property is ocean-front with direct beach access.
Appellants offered a summary appraisal report for the subject property prepared by William D. Cogliano, a licensed trainee appraiser, and counter-signed by licensed appraiser Ray Brodley. The appraisal was dated on January 31, 2003, eleven months before the relevant valuation date. Neither appraiser appeared to testify about the report and undergo cross-examination. The assessors objected to the admission of the report; the report was admitted in evidence, but the opinion of value was accorded no weight because the appraiser was unavailable for cross examination.
The appraisal report relied on assertedly comparable sales transacted in 2002. The nearest comparison property was 3.3 miles from the subject. One allegedly comparable property was some 15.5 miles away from the subject property, while another was located in Wareham. The opinion of value was $516,000 as of January 31, 2003.
The appellants complained of leaking windows and broken seals. They offered in evidence a proposal for repair work appearing on the letterhead of Agricola Construction Co. of Mashpee, dated February 23, 2006. The estimated cost of repair work was $43,401, but the proposal was unsigned. The extent to which the defective conditions existed on January 1, 2004 was left unclear from the testimony. This unsigned document lacked probative force.
Apart from the hearsay appraisal report, the appellants principally relied on the October 24, 2003 sale of the property next door at 125G Taylor Avenue in Plymouth, which has a similar beachfront location. For documentation of this sale, the appellants offered an MLS Report obtained online. According to the MLS information, the property at 125G Taylor Avenue sold for $725,000. The lot was 5800 square feet, and was improved with a colonial-style cottage dwelling with 1920 square feet of gross living area. The residence, built in 1997, had four bedrooms and three baths. The structure is wood-frame, the exterior walls are wood shingles, and heating is by hot water baseboard systems. The residence has both a deck and a porch.
Appellants stressed the added amenities the 125G Taylor Ave. property has in comparison to the subject property. These features include a fireplace, central air conditioning, cathedral ceilings, and a sauna and steam room. 
Appellants proposed adjustments to the sale price of the 125G Taylor Avenue property to arrive at an indicated value for the subject property. The proposed adjustments were as follows:
Amenity	$$ Adjustment	
"Higher Quality/
Newer Windows"	 $43,401	
"Larger Lot"	 $25,000	
"Higher/Cathedral
Ceilings"	 $50,000	
"Third Bathroom"	 $10,000	
"Hot Tub/Steam Sauna"	 $10,000	
"Central Air"	 $15,000	
"Marble/Granite Finishes"	 $15,000	
"Fireplace"	 $ 7,500	
Total Adjustments	$175,901	


	The indicated value of the subject property using the appellants' sales comparison analysis was $549,099. Adjustments intended to account for the differences between the two residences would entail an indicated building value of $79,299 for the subject property, notwithstanding the relatively recent construction and the sizeable amount of living area at the subject property. Appellants failed to make adjustments to the sale price of 125G Taylor Avenue to account for the additional gross living area the subject property has compared to 125G Taylor Avenue. 
Moreover, the proposed adjustments for the differing interior amenities were not adequately explained by the appellants, and appeared excessive taken together. It strained credulity to assume that a $50,000 adjustment to take account of the cathedral ceilings, or $43,401 for the windows, would support a reliable indication of value for the subject property. Appellants did not elaborate on how they arrived at the amounts of the adjustments, so as to persuade the hearing officer, on whose observations the Board relied, that the adjustments were reasonable to bring the sale price in line with the features of the subject property. The sale of 125G Taylor Avenue did not support an indicated value for the subject property given the sizeable and insufficiently explained adjustments proposed by the appellants.
On the basis of the foregoing, relying on the hearing officer as to matters of witness credibility, the Board found and ruled that appellants did not meet their burden of proof to show that the subject property had a fair cash value less than that assessed for fiscal year 2005. The appraisal offered in evidence pertained to a date some eleven months before the relevant valuation date. The fact that the appraiser who prepared the report did not appear and testify at the hearing, leaving his conclusions untested on cross-examination, meant that his opinion of value was entitled to no weight.
Appellants' failure to supply property record cards and deeds made a finding of basic comparability between the subject property and 125G Taylor Avenue more tenuous. But even if basic comparability is assumed, appellants failed to provide credible adjustments to the sale price to arrive at an indicated value for the subject property. The proposed adjustments were excessive and inadequately justified. In the absence of any other evidence of comparable sales or comparable assessments, the solitary sale of 125G Taylor Avenue was an insufficient factual basis for a finding of value in the amount the appellants proposed.
Appellants failed to meet their burden of proof to establish a fair cash value for the subject property lower than the assessed value. Accordingly, the Board decided the instant appeal for the assessors.

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 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 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 . . . prov[e] the contrary.'"  General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 598 (1984) (quoting Schlaiker, 363 Mass. at 245).
	Real estate valuation experts, the courts, and this Board generally utilize three principal methods to arrive at fair cash value: the cost approach, income capitalization, and comparable sales analysis. See Correia v New Bedford Redevelopment Authority, 375 Mass. 360, 362 (1978). "In valuing owner-occupied residential property, this Board has tended to rely on the comparable sales or market approach to value."  Carney v. Assessors of Plymouth, Mass. ATB Reports 2008-443, 2008-450.   "Evidence of the sale prices of 'reasonably comparable property' is the next best evidence to the sale of the property in question." Lattuca v. Robsham, 442 Mass. 205, 216 (2004)(Citation omitted.) Required are "'fundamental similarities'" between the subject property and the comparison properties. See Lattuca, 442 Mass. at 216. (Citation omitted.)
"The appellant bears the burden of 'establishing the comparability of … properties [used for comparison] to the subject propert[ies].'" Wood v. Assessors of Fall River, Mass. ATB Findings of Fact and Reports 2008-213, 2008-225. (Citation omitted.) "Once basic comparability is established, it is then necessary to make adjustments for the differences, looking primarily to the relative quality of the properties, to develop a market indicator of value." New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 470 (1981). 
In the instant appeal, appellants offered a hearsay appraisal report on the subject property. The opinion of value stated in the appraisal report was entitled to no weight given that the appraiser did not appear to testify and was not qualified as an expert. Cf. Shillman v. Assessors of Weston, Mass. ATB Findings of Fact and Reports 2006-108, 2006-118. Appellant's case accordingly rested entirely on the comparison of the subject property to the property next door at 125G Taylor Avenue, which sold in October of 2003. 
A finding of basic comparability between 125G Taylor Avenue and the subject property was difficult to make on the instant record, given the appellants' failure to offer the relevant property record cards and deed of sale in evidence. However, even if basic comparability is assumed, the Board found and ruled that the sale of the property at 125G Taylor Avenue did not support a finding of value contrary to the assessed value. The adjustments appellants proposed to bring the comparison into line with the features of the subject property were excessive, not adequately explained, and unpersuasive in arriving at a reliable indication of value from the 125G Taylor Avenue sale. See W.A. Wilde & Co. v. Assessors of Holliston, Mass. ATB Findings of Fact and Reports 2008-86, 2008-112. ("The Board has ruled that adjustments which are 'excessive' in amount compromise[] the indicated values derived from [the] comparable sales methodology' and 'raise[] serious questions regarding the initial comparability of' properties utilized.")(Citation omitted.) On the evidence before the Board, it was equally plausible that the sale of 125G Taylor Avenue for $725,000, properly adjusted, would indicate that the assessed value corresponded to the fair cash value of the subject property. 
A single sales comparison is a slender basis for a finding of value where, as here, the transaction did not clearly support appellant's claim of overvaluation. "'The validity of a final estimate of market value depends to a great extent on how well it can be supported by market data.'" Wood, Mass. ATB Findings of Fact and Reports at 2008-224. (Citation omitted.)
"A finding of fair cash value by the Board requires factual support in substantial evidence." Carney, Mass. ATB Findings of Fact and Reports at 2008-454, citing General Electric, 393 Mass. at 610. "Substantial evidence is 'such evidence as a reasonable mind might accept as adequate to support a conclusion.'" RCN-BecoCom, LLC v. Commissioner of Revenue, 443 Mass. 198, 204 (2005). (Citation omitted.) "[T]he fair cash value of property 'could not be proved with mathematical certainty and must ultimately rest in the realm of opinion, estimate and judgment.'"  Montaup Electric Co. v. Assessors of Whitman, 390 Mass. 847, 854 (1984), quoting Assessors of Quincy v. Boston Consolidated Gas Co., 309 Mass. 60, 72 (1941).  "The credibility of witnesses, the weight of the evidence, and inferences that reasonably may be drawn from the evidence are matters for the board." General Mills, Inc. v. Commissioner of Revenue, 440 Mass. 154, 161 (2003).
The Board found and ruled that appellants failed to meet their burden of proving that the fair cash value of the subject property was contrary to the assessed value. The Board accordingly relied on the presumption favoring the validity of the assessed value, and decided the instant appeal for the appellee.

                  APPELLATE TAX BOARD

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



A true copy,

Attest: ____________________________
	      Clerk of the Board

 On September 11, 2006, Commissioner Gorton was sworn as a temporary member of the Appellate Tax Board pursuant to G.L. c. 58A, § 1, his status as a member of the Board having terminated on that date with the appointment and qualification of his successor. See G.L. c. 30, § 8. This appointment was renewed for an additional year commencing September 11, 2007. Commissioner Gorton's material participation in the deliberation of this appeal included, inter alia, drafting and distributing proposed Findings and giving a detailed report on the evidence and his observations as to witness credibility. He also made oral presentations of his recommendations to the Board members. 
 The assessors rested after the appellants presented their case.

ATB 2008-508