David J. & Diane C. Freniere v. Board of Assessors of the Town of Wellesley (February 17, 2012)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


DAVID J. & DIANE C.         v.	   BOARD OF ASSESSORS OF 
FRENIERE				   THE TOWN OF WELLESLEY

Docket No. F306982	 			   Promulgated:  
		  					   February 17, 2012
			   				
 					
	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 Wellesley (the "assessors" or the "appellee"), to abate taxes on certain real estate located in the Town of Wellesley owned by and assessed to David J. and Diane C. Freniere (the "appellants") under G.L. c. 59, §§ 11 and 38, for fiscal year 2010.
	Commissioner Egan heard this appeal.  She was joined by Commissioners Scharaffa, Rose and Mulhern in the decision for the appellee. 
These findings of fact and report are promulgated  pursuant to the appellants' request under G.L. c. 58A, § 13 and 831 CMR 1.32.  
	
David J. and Diane C. Freniere, pro se, for the appellants.
 
James A. Goodhue, Esq. for the appellee.
FINDINGS OF FACT AND REPORT
On the basis of the testimony and exhibits offered into evidence at the hearing of this appeal, the Appellate Tax Board (the "Board") made the following findings of fact.
On January 1, 2009, the appellants were the assessed owners of a 36,793-square-foot parcel of real estate located in Wellesley at 72 Abbott Road, a quiet street with only light traffic (the "subject property").  According to the property record card on file with the appellee, the subject property was improved with two houses: the primary dwelling, a single-family, 2.25-story Colonial, built in 1890, which contained approximately 5,120 square feet of living area; and a secondary dwelling, a single-family two-story structure, built in 1896, which contained approximately 2,142 square feet of living area.  
The primary dwelling had a total of fourteen rooms, including five bedrooms, as well as four full bathrooms and one half bathroom.  There was no attic and the full basement was unfinished.  The primary dwelling's amenities included central air conditioning, four first-floor wooden decks, four second-floor wooden decks, a first-floor open-mason porch, a second-floor open-frame porch, five fireplaces, and a carport.  The property record card quoted a 2006 real estate listing, which indicated that the primary dwelling was "impeccably restored & renovated for discerning buyers yet retains intricate detail of its time."  The property record card rated the primary dwelling as in "good" condition with a grade of "AA-." 
The secondary dwelling had a total of five rooms, including two bedrooms, as well as one full bathroom.  According to the property record card, the secondary dwelling was originally used as a carriage house, and it was converted to a two-bedroom apartment sometime prior to the 1980s.  The property record card rated the secondary dwelling as in "above average" condition with a grade of  "A-." 
For fiscal year 2010, the assessors valued the subject property at $2,839,000 and assessed to the appellants a tax thereon, at the rate of $10.48 per $1,000, in the total amount of $30,039.77, which the appellants timely paid without incurring interest. On February 1, 2010, in accordance with G.L. c. 59, § 59, the appellants timely filed an abatement application with the assessors.  On March 3, 2010, the assessors denied the appellants' abatement request.  In accordance with G.L. c. 59, §§ 64 and 65, the appellants seasonably filed an appeal with the Board on June 3, 2010.  On the basis of these facts, the Board found and ruled that it had jurisdiction over the instant appeal.
The appellants contended that the subject property was overvalued.  The appellants purchased the subject property for $2,820,000 on May 26, 2008, approximately six months prior to the relevant assessment date.  They argued, however, that they had signed the Purchase and Sale Agreement one month earlier, in April, and that since that time, the real estate market had declined significantly both locally and nationally.  They estimated that, as of the relevant assessment date, real estate values in the price range of the subject property were down by about 15% from April, 2008.  The appellants' opinion of value for the subject property was $2,413,150, which represents a decrease of about 14% from the sale price.  The appellants further claimed that this valuation was more in keeping with the assessments of similar properties on Abbott Road.  
In support of their contention, the appellants both testified, and they also submitted three schedules which they compiled to compare purportedly comparable properties with the subject property.  The first, entitled "Schedule of Comparable Home Sales in 2008 On Abbott Road and in the Immediate Neighborhood," consisted of two separate schedules.  One schedule listed the subject property and eleven purportedly comparable properties, two of which were located on Abbott Road, and compared their 2008 sale price with their fiscal year 2009 and fiscal year 2010 assessments to arrive at a percentage of variance for both fiscal years.  The other schedule listed for each property: the 2008 sale price and 2010 assessment; the total number of rooms, bedrooms and bathrooms; total living area; lot size; and the overall condition.  Attached to the two schedules were copies of parcel summary printouts -- downloaded from a real estate website -- for each of the purportedly comparable properties listed.  
The appellants' second schedule was a list of twenty-three sales, including the sale of the subject, which had occurred on six select streets in Wellesley, including Abbott Road, from January 1, 2008 to December 31, 2009.  The schedule listed each property's address, date of sale, sale price, and the assessed values for both fiscal year 2009 and fiscal year 2010.
The third schedule, entitled "Schedule of Comparable Homes on Abbott Road," listed the subject property together with fourteen purportedly comparable properties and provided for each property: fiscal year 2010 assessment; number of rooms, bedrooms and bathrooms; total living area; lot size; and overall condition.  Attached to this schedule were copies of parcel summary printouts -- downloaded, again, from a real estate website -- for each of the purportedly comparable properties listed. 
The assessors' evidence consisted of: the testimony of Donna McCabe, the assessor for Wellesley; the official property record card for the subject; a copy of an article from Elegant Homes from June, 1999 describing the subject property as a "magnificent 'Turn of the Century' home with a Carriage House" that "has been beautifully restored to its original charm," complete with "exquisite exterior gardens and patio areas [that] are perfect for summer entertaining and relaxation," and listing its then-sale price at $2,500,000; the May 28, 2008 deed transferring the subject to the appellants for $2,839,000; and several copied photographs of the subject property's interior and exterior.  The assessors did not present any evidence of comparable sales or assessments.
On the basis of the evidence presented, the Board found that the $2,820,000 actual sale price of the subject, approximately six months before the relevant assessment date, was the best evidence of the subject property's fair market value.  The assessment represented an increase in fair market value of just 0.6%. 
 The appellants contended that the assessed value of the subject property should be reduced to reflect a decline in the real estate market between their purchase of the subject property and the relevant assessment date. Nevertheless, the evidence did not establish a decline in high-end, specialty properties like the subject property, an "impeccably restored," turn-of-the-century, high-end residence with a separate cottage house converted into a two-bedroom apartment.  The appellants' schedules simply listed sale prices for a total of twenty-two purportedly comparable properties located on six streets in Wellesley, including Abbott Road, which had sold at various times during calendar years 2008 and 2009.  The Board noted that for sixteen of these properties, the fiscal year 2010 assessed values were less than their purchase prices, while the remainder, like the subject property, had higher assessed values than purchase prices.  The Board found that this variation in values was inconclusive evidence of the overall market condition and did not support a finding that the subject property's fair case value decreased after the appellants' purchase.  
Moreover, the appellants' schedules of purportedly comparable-sale properties lacked any adjustments for crucial differences -- including, among others, lot size, living area, and location -- between those properties and the subject property.  Likewise, the appellants' "Schedule of Comparable Homes on Abbott Road," although it listed the differences between the properties with respect to number of rooms and bathrooms, living area, lot size and condition, also lacked adjustments.  Absent such adjustments, no meaningful comparison of these properties with the subject property could be made.  Therefore, the appellants' evidence lacked persuasive value.  
The Board thus found that the appellants failed to meet their burden of proving a fair market value less than the value assessed for the subject property.  Accordingly, the Board issued a decision for the appellee in the instant appeal.

OPINION
The assessors are required to assess real estate at its fair cash value as of the first day of January preceding the start of the fiscal year.  G.L. c. 59, §§ 2A and 38.  Fair cash value is defined as the price on which a willing seller and a willing buyer in a free and open market will agree if both of them are fully informed and under no compulsion.  Boston Gas v. Assessors of Boston, 334 Mass. 549, 566 (1956).  
	The appellants have 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 . . . prov[e] the contrary.'" General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 598 (1984) (quoting Schlaiker, 365 Mass. at 245).
Generally, real estate valuation experts, the Massachusetts courts, and this Board rely upon three approaches to determine the fair cash value of property: income capitalization; sales comparison; and cost reproduction.  Correia v. New Bedford Redevelopment Auth., 375 Mass. 360, 362 (1978).   However, "[t]he board is not required to adopt any particular method of valuation."  Pepsi-Cola Bottling Co. v. Assessors of Boston, 397 Mass. 447, 449 (1986).  
The actual sale of the subject property itself is "ʽvery strong evidence of fair market value, for [it] represent[s] what a buyer has been willing to pay to a seller for [the property under appeal].'"  New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 469 (quoting First Nat'l Stores, Inc. v. Assessors of Somerville, 358 Mass. 554, 560 (1971)).  See Kane v. Assessors of Topsfield, Mass. ATB Findings of Fact and Reports 2000-409, 411 (finding that a sale of the subject property three months before the relevant assessment date was the best evidence of the subject's fair cash value absent any evidence of compulsion).  
In the present appeal, the subject property sold, approximately six months prior to the relevant assessment date of January 1, 2009, for $2,820,000.  The appellants made no attempt to argue that the sale was made under compulsion or was in any other way not an arm's-length transaction.  As a freely-entered arm's-length sale, the Board found and ruled that the subject property's sale price was the best evidence of its assessment at $2,839,000.  Moreover, the assessment represented an increase in fair market value of just 0.6% within the six-month period from the sale date to the relevant assessment date, which the Board found to be reasonable, particularly given the unique attributes of the subject property.  See Antonino v. Assessors of Shutesbury, Mass. ATB Findings of Fact and Reports 2008-54, 68 (ruling that general market trends are not necessarily applicable to unique properties).    
The appellants, however, contended that market conditions justified a reduction in the sale price from the date of signing the Purchase and Sale Agreement to the relevant assessment date.  The means by which they attempted to prove the decline in the real estate market was through comparison of the subject property with sales and assessments of purportedly comparable properties.  "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).  Properties are "comparable" to the subject property when they share "fundamental similarities" with the subject property, including similar age, locations, sizes and dates of sale.  Id.  The appellants bear 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, 225 (quoting Fleet Bank of Mass. v Assessors of Manchester, Mass. ATB Findings of Fact and Reports 1998-546, 547). "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., 383 Mass. at 470.
In the instant appeal, the appellants presented a schedule that listed the purportedly comparable properties' 2008 sale prices, their assessments for fiscal years 2009 and 2010, and the variance between the 2008 sale price and the fiscal year 2010 assessment.  Another schedule listed some of the comparable-sale properties' features, namely, the total number of rooms, bedrooms and bathrooms, total living area, lot size and condition grade.  Although the appellants' schedules provided basic information about their purportedly comparable properties, and the supplemental printouts provided more detailed descriptions of those properties, the appellants made no attempt to make adjustments to the comparable sales and assessments, where adjustments would have been required.  See id. ("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.").  "Adjustments for differences in the elements of comparison are made to the price of each comparable property . . . .  The magnitude of the adjustment made for each element of comparison depends on how much that characteristic of the comparable property differs from the subject property."  Appraisal Institute, The Appraisal of Real Estate 322 (13th ed., 2008).  The Board found that, without the necessary adjustments, the appellants' comparable-sales and comparable-assessments analyses were fundamentally flawed and thus carried little weight. 
For the reasons stated above, the Board found and ruled that the appellants failed to meet their burden of proving an assessed value lower than that assessed for the fiscal year at issue.  Accordingly, the Board issued a decision for the appellee in the instant appeal.

				       THE APPELLATE TAX BOARD



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



A true copy,

Attest: _______________________________
        Clerk of the Board

 This amount includes a Community Preservation Act ("CPA") surcharge equal to 1% of the subject property's assessed value.
 For reasons that were not presented to the Board, the quitclaim deed was not recorded until June 16, 2008.

ATB 2012-124