F319160; F322970•Vincent M. Lorusso, Jr. & Kathryn A. Lorusso v. Board of Assessors of the Town of Concord
Vincent M. Lorusso, Jr. & Kathryn A. Lorusso v. Board of Assessors of the Town of Concord
F319160; F322970Masstaxbd
Full text
COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD
VINCENT M.LORUSSO, JR. v. BOARD OF ASSESSORS OF
& KATHRYN A.LORUSSO THE TOWN OF CONCORD
Docket Nos.: F319160 Promulgated:
F322970 June 9, 2016
These are appeals 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 Board of Assessors of the Town of Concord ("appellee" or "assessors") to abate taxes on certain real estate in Concord, owned by and assessed to Vincent M. and Kathryn Lorusso ("appellants") under G.L. c. 59, §§ 11 and 38, for fiscal years 2013 and 2014 ("fiscal years at issue").
Commissioner Good heard these appeals. Chairman Hammond and Commissioners Scharaffa, Rose and Chmielinski joined her in the decisions for the appellant.
These findings of fact and report are made pursuant to the requests under G.L. c. 58A, § 13 and 831 CMR 1.32 of the appellants and the appellee.
Stephen M. Politi, Esq. for the appellants.
R. Lane Partridge, Chairman, for the appellee.
Findings of Fact and Report
On January 1, 2012, the relevant assessment date for fiscal year 2013, Choo Choo LLC was the owner of a 10.98-acre improved parcel of land, identified by the appellee as Parcel ID 1403/4 and with an address of 1437-1 Monument Street in Concord ("subject property"). The appellants became the owners of the subject property on December 31, 2012, paying a purchase price of $2,775,000. For fiscal year 2013, the assessors valued the subject property at $4,102,800 and assessed a tax thereon, at the rate of $14.07 per thousand, in the total amount of $57,726.40. In accordance with G.L. c. 59, § 57A, the appellants paid the tax due without incurring interest. On January 14, 2013, in accordance with G.L. c. 59, § 59, the appellants timely filed an abatement application for the subject property with the assessors, which they granted in part on February 28, 2013, reducing the subject property's assessment to $4,000,000 for fiscal year 2013. In accordance with G.L. c. 59, §§ 64 and 65, the appellants seasonably filed a petition with the Appellate Tax Board ("Board") on May 3, 2013. On the basis of these facts, the Board found and ruled that it had jurisdiction to hear and decide the appeal for fiscal year 2013.
On January 1, 2013, the relevant assessment date for fiscal year 2014, the appellants were the assessed owners of the subject property. For fiscal year 2014, the assessors valued the subject property at $4,190,000 and assessed a tax thereon, at the rate of $14.45 per thousand, in the total amount of $60,545.50. In accordance with G.L. c. 59, § 57A, the appellants paid the tax due without incurring interest. On January 9, 2014, in accordance with G.L. c. 59, § 59, the appellants timely filed an abatement application for the subject property with the assessors, which they denied on February 27, 2014. In accordance with G.L. c. 59, §§ 64 and 65, the appellants seasonably filed a petition with the Board on May 16, 2014. On the basis of these facts, the Board found and ruled that it had jurisdiction to hear and decide the appeal for fiscal year 2014.
The appellants presented their case-in-chief through the testimony and appraisal report of James C. Marchant, whom the Board qualified as an expert in the area of real estate valuation, as well as the testimony of appellant Vincent Lorusso. The appellee presented its case-in-chief through the testimony and valuation summary of Lane Partridge, the Chairman of the Board of Assessors. Additionally, at the request of the assessors, the hearing officer took a view of the subject property. On the basis of all of the evidence, including the testimony and documentary exhibits entered into the record and the hearing officer's view, the Board found the following facts.
The subject property is located in the Upper Monument Street neighborhood of Concord, an area of mixed-style older dwellings as well as many large, newer Colonials. Monument Street is a very exclusive and highly prestigious address, so much so that homeowners have arranged to build their homes off of long shared driveways, which has resulted in many hyphenated addresses like the subject property. The subject property's area is serene, wooded and secluded. Immediately across from the subject property is a pond, of which the subject property enjoys "seasonal" views, as the view is somewhat compromised by the wooded buffer zone surrounding the pond.
The subject property is improved with a single-family home with an above-grade, gross living area of 8,913 square feet ("subject home"). The subject home was originally built in 1987 with a two-story addition built in 2001 that increased the size of the subject home by about 1,780 square feet of living area to its present size. The first and second levels of the subject home are comprised of a total of 15 rooms, including seven bedrooms, as well as five full bathrooms and three half-bathrooms.
The first level contains 5,082 square feet of living area and features hardwood flooring throughout with the exception of marble in the full bathroom and the two-story foyer that includes a curved staircase. The first floor has an open-concept construction that includes the kitchen, eating area and family room with a vaulted ceiling. The subject home's modern kitchen features two sub-zero refrigerators, two stainless-steel dishwashers, a six-burner Thermador gas range with hood, two sinks and granite counter tops with tile backsplash. A long hallway leads to the master-bedroom suite, which includes a den with a vaulted ceiling. Another wide hallway provides access to the addition, which includes a guest bedroom and a full bathroom.
The second level contains 3,831 square feet of living area and includes a media room above the detached four-car garage. The basement contains an additional 3,000 square feet of finished living area, including: a large family/play area; a professionally equipped exercise room; a music room; an arts and crafts room, and a children's theater area complete with a stage and velvet curtain. The basement also features a number of cedar closets and other storage and utility areas; a large laundry room equipped with several washers and dryers; one full bathroom, and a sauna. The subject home's other amenities include central air conditioning, an auxiliary generator, two fireplaces, a wooden deck, and a large screened-in porch.
The subject property also includes a separate dwelling that contains 2,270 square feet of living space ("carriage home"). The first level of the carriage home is predominantly garage space for four cars, the second level is the main living area that includes a kitchen, dining room, a full bathroom and another half bathroom, and the third level is a small half-story containing two bedrooms. The carriage home also includes two decks, one off the kitchen and one off the dining room. The carriage home had once been used as a stable for horses, and the grounds immediately surrounding it still include a large, fenced-in, paddock area.
The subject property's grounds are comprised of 10.98 acres, about 30% of which is wetlands consisting of a small pond. The subject property also abuts forest land owned by Harvard University to the west. On the relevant dates of valuation, the grounds included a tennis court and an in-ground pool, which has since been filled in. When considering the 100-foot buffer zone around the pond and the 60-foot buffer zone on the western lot boundary, an estimated 5 acres, or about 20% of the subject property's grounds, are buildable.
1. The Appellants' Valuation Evidence
a. Mr. Marchant's appraisal report and testimony.
i. Fiscal year 2013.
Mr. Marchant completed a sales-comparison analysis to value the subject property. For fiscal year 2013, he utilized seven purportedly comparable properties. A summary of his analysis is presented in the following charts:
Comparable
79 Macone Farm Ln.
#1 Adj. 350 Musketaquid Rd
#2 Adj. 1352 Monument St.
#3 Adj. Sale price $2,400,000 $2,300,000 $2,800,000 Sale date 06/23/2011 01/18/2011 12/26/2012 Location Slightly inferior $ 400,000 Slightly superior -$ 100,000 Good Site size 8.45 acre -$ 75,000 0.96 acre $ 150,000 3.19 acre $ 60,000 Views Residential/ woods Residential Residential Quality of Construction Slightly superior -$ 100,000 Good Slightly superior -$ 50,000 Condition Slightly superior -$ 300,000 Slightly superior -$ 100,000 Slightly inferior $ 50,000 Room count
bed/bath 12 rooms
6/5.2 $ 6,000 12 rooms
5/4.1 $ 24,000 20 rooms
5/7.2 -$ 18,000 Above-grade living area 6,869 sf $ 275,940 6,407 sf $ 338,310 9,587 sf -$ 90,990 Basement and finished rooms below grade Full basement; finished:
1 room,
1 bathroom $ 16,000 Full basement; finished: 2 rooms $ 18,000 Partial;
Finished:
1 lrg room,
1 bathroom $ 12,000 Functional utility None $ 10,000 None $ 10,000 None $ 10,000 Garage/ carport 4-car, attached $ 16,000 3-car, attached $ 20,000 3-car attached heated $ 20,000 Porch/patio/ deck Covered porch; patio $ 3,000 Porch, patio $ 3,000 Encl. porch, terrace -$ 2,000 Fireplaces 5 -$ 6,000 2 3 -$ 3,000 Amenities Lawn irrigation $ 5,000 Lawn irrigation $ 5,000 Pool, cabana, patio -$ 5,000 Amenities None $ 30,000 None $ 30,000 Tennis court $ 25,000 Net adjustments $ 280,940 $ 398,310 $ 8,010 Adjusted sale price $2,680,940 $2,698,310 $2,808,010
Comparable
1373-4 Monument St.
#4 Adj. 368 Strawberry Hill Rd.
#5 Adj. 315 Musketaquid Rd
#6 Adj. Sale price $4,700,000 $3,325,000 $2,828,000 Sale date 08/28/2012 08/28/2012 06/29/2012 Location Good Slightly inferior $ 400,000 Slightly superior -$ 100,000 Site size 8.47 acre -$ 75,000 12.03 acre -$ 30,000 1.76 acre $ 80,000 Views Meadow -$ 10,000 Residential; pond -$ 10,000 Residential Quality of Construction Superior -$1,000,000 Superior -$ 700,000 Slightly superior -$ 100,000 Condition Superior -$ 500,000 Superior -$ 400,000 Superior -$ 500,000 Room count
bed/bath 13 rooms
5/3.2 $ 30,000 11 rooms
5/3.2 $ 30,000 10 rooms
5/5.1 $ 12,000 Above-grade living area 6,647 sf $ 305,910 6,784 sf $ 287,415 5,949 sf $ 400,140 Basement and finished rooms below grade Partial; 3 rooms,
1 bathroom $ 8,000 Full; unfinished $ 26,000 Full; unfinished $ 26,000 Functional utility Aux. generator Unfinished walk-up attic -$ 5,000 None $ 10,000 Garage/ carport 6-car, built-in detached $ 8,000 3-car detached $ 20,000 3-car attached $ 20,000 Porch/patio/ deck Wood deck, porch, patio Deck, porch, terrace Open porch; patio $ 3,000 Fireplaces 4 -$ 6,000 4 -$ 6,000 3 -$ 3,000 Amenities Heated pool; lawn irrigation -$ 5,000 Pool, spa,
hot tub -$ 3,000 Lawn irrigation $ 5,000 Amenities Carriage house $ 5,000 4-stall barn $ 15,000 None $ 30,000 Net adjustments $1,239,090 $ 375,585 $ 116,860 Adjusted sale price $3,460,910 $2,949,415 $2,711,140
Comparable
246 Lindsay Pond Rd.
#7 Adj.
Sale price $2,100,000
Sale date 07/02/2012
Location Inferior $ 700,000
Site size 1.84 acre $ 80,000
Views Residential
Quality of Construction Slightly superior -$ 100,000
Condition Superior -$ 500,000
Room count
bed/bath 11 rooms
5/4.1 $ 24,000
Above-grade living area 6,483 sf $ 328,100
Basement and finished rooms below grade Full; unfinished $ 26,000
Functional utility None $ 10,000
Garage/ carport 3-car attached $ 20,000
Porch/patio/ deck Open porch; patio $ 3,000
Fireplaces 1 $ 3,000
Amenities Lawn irrigation $ 5,000
Amenities None $ 30,000
Net adjustments $ 629,100
Adjusted sale price $2,729,100
In analyzing the above comparable properties, Mr. Marchant made a few notable adjustments. First, he considered the subject property's "effective" lot size to be 5 acres, rather than 10.98 acres, opining that only 5 acres of the subject property were actually "usable" as the remainder was wooded, wetland, or buffer area and thus unbuildable. When making his adjustments for the lot sizes of the purportedly comparable properties, Mr. Marchant thus considered the subject's lot size to be 5 acres. Second, Mr. Marchant considered the value of the subject property's carriage house to be just $25,000, and he used that value to adjust his purportedly comparable properties without a carriage house. He explained that the carriage house, in his opinion, added comparatively little value to the subject property because the main dwelling was so large.
Mr. Marchant determined that the best comparable sales were those from fiscal year 2011, Comparables #1 and #2. Of the remaining five sales from fiscal year 2012, all but Comparable #3 required more than what he classified as the "recommended" adjustment. Mr. Marchant thus gave the most weight to Comparables #1, #2 and #3. Those purportedly comparable properties yielded adjusted sale prices ranging from $2,680,940 to $2,808,010. Mr. Marchant selected $2,700,000 as the fair market value for the subject property under the sales-comparison approach for fiscal year 2013.
Mr. Marchant also performed a cost-approach analysis for the subject property. The value he obtained from that analysis was $3,148,100, but he placed no weight on the value obtained from that method, opining that there were only a limited number of recent sales of building lots available for review in the subject property's community. Therefore, Mr. Marchant considered only the sales-comparison approach and selected a fair market value for the subject property at $2,700,000 for fiscal year 2013.
ii. Fiscal year 2014
For fiscal year 2014, Mr. Marchant utilized eight purportedly comparable properties, six of which were the same ones used in his analysis for fiscal year 2013. A summary of his analysis is presented in the following charts:
Comparable
1352 Monument St.
#1 Adj. 1373-4 Monument St.
#2 Adj. 368 Strawberry Hill Rd.
#3 Adj. Sale price $2,800,000 $4,700,000 $3,325,000 Sale date 12/26/2012 08/28/2012 08/28/2012 Location Good Good Slightly inferior $ 400,000 Site size 3.19 acre $ 60,000 8.47 acre -$ 75,000 12.03 acre -$ 30,000 Views Residential Meadow -$ 10,000 Residential; pond -$ 10,000 Quality of Construction Slightly superior -$ 50,000 Superior -$1,000,000 Superior -$ 700,000 Condition Slightly inferior $ 50,000 Superior -$ 500,000 Superior -$ 400,000 Room count
bed/bath 20 rooms
5/7.2 -$ 18,000 13 rooms
5/3.2 $ 30,000 11 rooms
5/3.2 $ 30,000 Above-grade living area 9,587 sf -$ 70,770 6,647 sf $ 237,930 6,784 sf $ 223,545 Basement and finished rooms below grade Partial;
Finished:
1 lrg room,
1 bathroom $ 12,000 Partial; 3 rooms,
1 bathroom $ 8,000 Full; unfinished $ 26,000 Functional utility None $ 10,000 Aux. generator Unfinished walk-up attic -$ 5,000 Garage/ carport 3-car attached heated $ 20,000 6-car, built-in detached $ 8,000 3-car detached $ 20,000 Porch/patio/ deck Encl. porch, terrace -$ 2,000 Wood deck, porch, patio Deck, porch, terrace Fireplaces 3 -$ 3,000 4 -$ 6,000 4 -$ 6,000 Amenities Pool, cabana, patio -$ 5,000 Heated pool; lawn irrigation -$ 5,000 Pool, spa,
hot tub -$ 3,000 Amenities Tennis court $ 25,000 Carriage house $ 5,000 4-stall barn $ 15,000 Net adjustments $ 28,230 $1,307,070 $ 439,455 Adjusted sale price $2,828,230 $3,392,930 $2,885,545
Comparable
315 Musketaquid Rd.
#4 Adj. 246 Lindsay Pond Rd.
#5 Adj. 79 Macone Farm Ln.
#6 Adj. Sale price $2,828,000 $2,100,000 $2,400,000 Sale date 06/29/2012 07/02/2012 06/23/2011 Location Slightly superior -$ 100,000 Inferior $ 700,000 Slightly inferior $ 400,000 Site size 1.76 acre $ 80,000 1.84 acre $ 80,000 8.45 acre -$ 75,000 Views Residential Residential Residential/ woods Quality of Construction Slightly superior -$ 100,000 Slightly superior -$ 100,000 Slightly superior -$ 100,000 Condition Superior -$ 500,000 Superior -$ 500,000 Slightly superior -$ 300,000 Room count
bed/bath 10 rooms
5/5.1 $ 12,000 11 rooms
5/4.1 $ 24,000 12 rooms
6/5.2 $ 6,000 Above-grade living area 5,949 sf $ 311,220 6,483 sf $ 255,150 6,869 sf $ 214,620 Basement and finished rooms below grade Full; unfinished $ 26,000 Full; unfinished $ 26,000 Full basement; finished;
1 room,
1 bathroom $ 16,000 Functional utility None $ 10,000 None $ 10,000 None $ 10,000 Garage/ carport 3-car attached $ 20,000 3-car attached $ 20,000 4-car, attached $ 16,000 Porch/patio/ deck Open porch; patio $ 3,000 Open porch; patio $ 3,000 Covered porch; patio $ 3,000 Fireplaces 3 -$ 3,000 1 $ 3,000 5 -$ 6,000 Amenities Lawn irrigation $ 5,000 Lawn irrigation $ 5,000 Lawn irrigation $ 5,000 Amenities None $ 30,000 None $ 30,000 None $ 30,000 Net adjustments $ 205,780 $ 556,150 $ 219,620 Adjusted sale price $2,622,220 $2,656,150 $2,619,620
Comparable
210 Monument Farm Rd.
#7 Adj. 98 Caterina Hghts
#8 Adj.
Sale price $4,680,000 $2,170,000
Sale date 07/26/2013 04/30/2013
Location Slightly superior -$ 100,000 Inferior $ 500,000
Site size 5.84 acre -$ 300,000 1.85 acre $ 80,000
Views Residential Residential
Quality of Construction Superior -$1,000,000 Good
Condition Slightly superior -$ 300,000 Good
Room count
bed/bath 16 rooms
6/7.1 -$ 12,000 15 rooms
5/5.1 $ 12,000
Above-grade living area 9,262 sf -$ 36,600 8,295 sf $ 64,000
Basement and finished rooms below grade Full basement; finished;
4 rooms,
1 half bathroom $ 7,000 Full basement; finished; 1 room,
1 bathroom $ 16,000
Functional utility Heated driveway -$ 10,000 None $ 10,000
Garage/ carport 5-car, attached $ 12,000 3-car, attached $ 20,000
Porch/patio/ deck Porch; patio; spa -$ 3,000 Porch, wood deck $ 3,000
Fireplaces 3 -$ 3,000 5 -$ 9,000
Amenities
In-ground pool; putting green -$ 10,000 Lawn irrigation $ 5,000
Amenities Guest house; tennis court Garden, shed $ 20,000
Net adjustments $1,755,600 $ 721,900
Adjusted sale price $2,924,400 $2,891,900
As in the previous fiscal year, Mr. Marchant's adjustments in fiscal year 2014 reflected his determinations that the subject property's "usable" site was only 5 acres and that the subject property's carriage house should be valued at $25,000.
Mr. Marchant placed the most weight on Comparable #1, a sale from the subject property's immediate neighborhood and the only purportedly comparable property that did not require more than what Mr. Marchant deemed a recommended adjustment amount. Comparable #1 yielded an adjusted sale price of $2,828,230. Mr. Marchant selected $2,800,000 as the value obtained from the sales-comparison approach for the subject property for fiscal year 2014.
Mr. Marchant also performed a cost-approach analysis for fiscal year 2014, but again, citing a limited number of recent sales of building lots available for review, Mr. Marchant relied only upon the value he obtained from his sales-comparison approach. Mr. Marchant thus determined a fair market value for the subject property of $2,800,000 for fiscal year 2014.
b. Mr. Lorusso's testimony.
The appellants' second witness was appellant, Vincent Lorusso, who testified to the circumstances surrounding the appellants' purchase of the subject property. Mr. Lorusso testified that when he and his wife began investigating the possibility of purchasing property in Concord, the subject property's listing price of $3.7 million dollars was beyond their budget. However, the appellants considered that the subject property had been on the market for approximately 700 days and in Mr. Lorusso's opinion, the common knowledge among home buyers in Concord was that the asking price was not reflective of the subject property's market value. Mr. Lorusso explained that this understanding led the appellants to visit the subject property.
Upon their visit, the appellants discovered that, while the subject property had an address on Monument Street, "it's one of those setback where we have no frontage on Monument Street" and thus, in Mr. Lorusso's opinion, lacked the "curb appeal" of Monument Street. Moreover, Mr. Lorusso testified that the subject property was located as close to Carlisle as it was to Concord Center and thus did not have what he deemed to be the most desirable location on Monument Street.
Mr. Lorusso acknowledged that the prior owner, best-selling author Patricia Cornwell (acting through the entity Choo Choo LLC), had purchased the subject property for $4,900,000 on August 18, 2006. However, Mr. Lorusso opined that the prior owner may have had needs for certain features that did not hold the same value for the appellants, particularly the separate carriage house, which Ms. Cornwell used to house security personnel that she, as a public figure, required. Mr. Lorusso considered this feature to be an over improvement that did not add any value to the subject property, at least for the appellants' circumstances, and yet still required maintenance: "It's a negative value for us. And that's not applicable to everyone."
Mr. Lorusso further testified that he considered the subject property's effective land size to be far less than its listed 10.94 acres, because its wetlands and buffer zones were not land "that we can work with."
With their perspective of the subject property's location, over-improvements and effective land size, the appellants decided to make an offer to the seller and entered into negotiations, which Mr. Lorusso testified to being a "very drawn out" process involving many people, including the seller's real estate agent, financial advisors and attorneys. "We debated very granular - seemingly granular aspects of the selling price." The lengthy sales process culminated with the appellants' purchase of the subject property on December 31, 2012 for the price of $2,775,000.
2. The Appellee's Valuation Evidence
Lane Partridge testified on behalf of the assessors. He first emphasized that Monument Street was a uniquely prestigious and valuable neighborhood in Concord. As evidenced by the many hyphenated addresses built off of long driveways that would otherwise be classified as their own street, residents of Concord have sought to have an address on Monument Street. Mr. Partridge thus opined that a sale of a property on Monument Street was not easily comparable to a sale in any other neighborhood in Concord.
Mr. Partridge next testified that he had been suspicious of how much lower the subject property had sold to the appellants when compared with other recent sales of properties on Monument Street. He submitted copies of newspaper articles as evidence to suggest that the previous owner was experiencing financial turmoil and thus may have been eager to sell the subject property, therefore suggesting that the sale price did not reflect market value.
Mr. Partridge next testified to the summary valuation report that he had prepared for the hearing. He had performed a sales-comparison analysis selecting three purportedly comparable properties located on or very close to the subject property's street: #1373-4 Monument Street, #1199 Monument Street, and #210 Monument Farm Road. A summary of Mr. Partridge's valuation analyses for both fiscal years at issue is presented in the charts below:
Fiscal year 2013
Comparable #1 Adj. Comparable #2 Adj. Comparable #3 Adj. Address 1373-4 Monument St. 1199
Monument St. 210 Monument Farm Rd. Sale price $4,700,000 $3,221,000 $4,680,000 Sale date 08/28/2012 09/27/2012 07/26/2013 Land size 80,000 sf 80,000 sf 80,000 Excess land 6.63 acre $ 173,300 1.92 acre $ 498,200 4.0 acre $ 354,700 Condition Very good Very good Excellent -$ 62,000 Grade 8 $ 327,480 5 $ 862,350 9 Living area 6,049 sf $ 400,000 5,001 sf $ 513,864 9,262 sf $ 53,676 Rooms
Bed/bath 12 rooms
5/4.2 $ 50,000 12 rooms
5/3.1 $ 80,000 11 rooms
5/7.0 $ 10,000 Style Contemporary -$ 30,245 Century -$ 260,052 Custom -$ 435,314 Garage 4-car under 1-car detached $ 60,000 4-car attached Tennis court None $ 25,000 None $ 25,000 Yes Pool Yes Yes Yes Detached garage/apt
living area Detached-garage/work area of 567 sf $ 197,100 Barn/apartment/workout -$ 90,000 Garage/apart/
Pool house -$ 209,400 Net adj. $1,143,315 $1,689,362 -$ 288,338 Adjusted sale price $5,843,315 $4,910,362 $4,391,662
Fiscal year 2014
Comparable #1 Adj. Comparable #2 Adj. Comparable #3 Adj. Address 1373-4 Monument St. 1199
Monument St. 210 Monument Farm Rd. Sale price $4,700,000 $3,221,000 $4,680,000 Sale date 08/28/2012 09/27/2012 07/26/2013 Land size 80,000 sf 80,000 sf 80,000 Excess land 6.63 acre $ 173,300 1.92 acre $ 498,200 4.0 acre $ 354,700 Condition Very good Very good Excellent -$ 62,000 Grade 8 $ 327,480 5 $ 862,350 9 Living area 6,049 sf $ 415,520 5,001 sf $ 532,896 9,262 sf $ 55,664 Rooms
Bed/bath 12 rooms
5/4.2 $ 50,000 12 rooms
5/3.1 $ 80,000 11 rooms
5/7.0 $ 10,000 Style Contemporary $ 12,098 Century -$ 265,053 Custom -$ 444,576 Garage 4-car under 1-car detached $ 60,000 4-car attached Tennis court None $ 25,000 None $ 25,000 Yes Pool Yes Yes Yes Detached garage/apt
living area Detached-garage/work area of 567 sf $ 197,100 Barn/apartment/workout -$ 90,000 Garage/apart/
Pool house -$ 209,400 Net adj. $1,200,498 $1,703,393 -$ 295,612 Adjusted sale price $5,900,498 $4,924,393 $4,391,662
In explaining some of his adjustments, Mr. Partridge testified that, while the appellants may not be utilizing the carriage house, it nonetheless had value in the subject property's market. Based on his analyses, Mr. Partridge's three purportedly comparable properties sold at above $500 per square foot, while the subject property sold for just $284 per square foot. In Mr. Partridge's opinion, the sale of the subject property was not reflective of its market value. Instead, Mr. Partridge, based on his analysis, opined that the subject property's fair market value was $4,400,000 for both fiscal years at issue.
3. The Board's Reconciliation.
On the basis of all of the evidence, the Board found that the appellants met their burden of demonstrating that the assessed value of the subject property exceeded its fair cash value for the fiscal years at issue. In reaching this conclusion, the Board credited Mr. Partridge's testimony that Monument Street is a uniquely prestigious location within Concord, such that properties located elsewhere within Concord provided a less reliable indication of market value for the subject property. The Board therefore placed weight on only those comparable properties located directly on Monument Street, in addition to 210 Monument Farm Road, which was in the immediate area of Monument Street and nearly abutted the subject property.
Among the Monument Street sales that the Board gave weight to was the actual sale of the subject property. This sale occurred on December 31, 2012, making it particularly timely for fiscal year 2014 and still relevant for fiscal year 2013. After it had been on the market for a protracted amount of time, the appellants purchased the subject property for $2,775,000. The assessors attempted to discredit this sale as less than arm's length, suggesting that the seller was in dire fiscal straits and sold the subject property under duress. However, the Board found that the news articles submitted by the assessors merely reflected the general knowledge that the prior owner, who held many assets beyond the subject property, was engaged in a dispute with her financial advisor. These stories made no specific showing that she felt any pressure to sell the subject property in particular, a property which she did not use as her primary residence. Moreover, Mr. Lorusso's testimony concerning the lengthy negotiation process, which the Board found credible, contradicted any suggestion that the sale was made with an imbalance of bargaining from either side and therefore not at arm's length. The Board thus found that the actual sale of the subject property was timely and made at arm's length, and accordingly it was relevant in the determination of fair cash value for both of the fiscal years at issue.
However, because a single sale does not conclusively establish market price, the Board looked to other comparable sales to help determine the subject property's fair market value. The properties that the Board found most probative were 1373-4 Monument Street, 1352 Monument Street, and 210 Monument Farm Road.
1352 Monument Street was not only a very timely sale, having occurred in December of 2012, but it was also close in proximity to the subject property. In addition, the dwelling was large in size like the subject property, although it had a much smaller lot size and was slightly inferior in condition. That property sold for $2,800,000 and the Board gave weight to that sale price in reaching its determination of fair cash value.
1373-4 Monument Street and 210 Monument Farm Road shared many fundamental similarities to the subject property, including location, large lot sizes, significant finished living area, and additional amenities such as pools, multi-car garages and separate detached structures offering additional living or working space. Those properties sold for $4.7 million and $4.68 million, respectively, during 2012 and 2013, respectively, and the Board gave weight to those sales in reaching its determination of fair cash value.
After giving weight to each of these sales, the Board concluded a fair cash value for the subject property of $3,350,000 for both of the fiscal years at issue.
Although it relied on many of the comparable sales offered by both parties, the Board rejected several of the adjustments made by both Mr. Marchant and Mr. Partridge in reaching its determination of value. First, the Board disagreed with Mr. Marchant's conclusion that the "effective" size of the subject property's lot was only 5 acres because much of the actual 10.98-acre parcel consisted of unbuildable wooded, wetland, and buffer area. While it is true that the appellants could not build on the excess land, neither could anyone else. Thus the Board found that the excess land enhanced the appeal and value of the subject property as it provided a very private and bucolic setting. The Board therefore rejected Mr. Marchant's adjustments based on the subject property having a lot size of only 5 acres and instead adopted Mr. Partridge's methodology of valuing the first 80,000 square feet as the subject property's primary site and the remaining parcel as excess property. This methodology better reflected the principal that, while it did not hold the same value as the primary site, the remaining acreage nevertheless added value to the subject property.
The Board also rejected Mr. Marchant's valuation of the carriage house at just $25,000. While Mr. Lorusso testified that the carriage house was not useful to the appellants, the Board found that the presence of a carriage house - particularly one with a four-car garage, two bedrooms, one and one-half bathrooms, ample living space and quality finishes -- nonetheless carried a value to properties similar to the subject property, as evidenced by the fact that many of the properties offered for comparison also had carriage houses. Such structures frequently add value and use as residences for groundskeepers, au pairs, or in-laws, as stables for horses, or as home offices, and the Board found that Mr. Marchant's valuation of this amenity at just $25,000 was too low.
The Board likewise found fault with some of Mr. Partridge's adjustments to the comparable properties, particularly those for quality and grade of construction. With respect to 1373-4 Monument Street, Mr. Partridge rated it as in "very good" condition with a grade of 8 as compared to the subject property's "very good" condition with a grade of 9. However, the property record card for 1373-4 Monument Street listed it as a grade-10 property with "excellent" and "luxury" finishes, as compared with the property record card's classification of the subject property's "modern" and "very good" finishes, demonstrating that even the assessors considered 1373-4 Monument Street to be superior to the subject property.
The flaws in Mr. Partridge's adjustments to this property were manifest. Though he concluded an adjusted sale price for this property of between $5.8 and $5.9 million for the fiscal years at issue, the Board noted that its assessed values for those years were significantly lower, at $2.75 million for fiscal year 2013 and $3.98 million for fiscal year 2014. These assessed values presented another curiosity, namely, that a property which sold for nearly $2 million more than the subject property had lower assessed values than it for both of the fiscal years at issue. The Board found that these anomalies provided but another indication that the assessed values of the subject property were overstated.
In addition, the Board disagreed with Mr. Partridge's adjustments to 210 Monument Farm Road for style and condition. That property was close in size to the subject property, and it had many of the same amenities, including the attached 4-car garage and the separate guest home with additional garage space and two-story finished living area. However, 210 Monument Farm Road's custom/contemporary style was superior to the subject property's Cape-Cod style, and its "excellent" and "luxury" finishes were superior to the subject property's "modern" and "very good" finishes. The assessors' adjustment to 210 Monument Farm Road for condition was -$62,000, which the Board found to be too modest, based on the record in its totality and on its own expertise. Accordingly, the Board rejected this adjustment.
After giving weight to the sale of the subject property, as well as the comparable-sale properties from Monument Street and 210 Monument Farm Road, the Board arrived at a fair cash value of $3,350,000 for the subject property for both of the fiscal years at issue. Accordingly, the Board issued decisions for the appellants in these appeals, and granted abatements of $9,282.69, inclusive of the CPA surcharge, for fiscal year 2013 and of $12,320.07, inclusive of the CPA surcharge, for fiscal year 2014.
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 in a free and open market 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 [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 sustain the burden of proving the contrary.'" General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 598 (1984) (quoting Schlaiker, 365 Mass. at 245).
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)).
In the present appeals, the appellants contended that the subject property was overvalued. They first argued that the price that they paid on December 31, 2012, one day before the relevant assessment date for fiscal year 2014, reflected its fair market value more accurately than did the subject assessments. Usually, 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 (1981) (quoting First Nat'l Stores, Inc. v. Assessors of Somerville, 358 Mass. 554, 560 (1971)). See also 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). However, when there is compulsion, the sale of the subject is not the best indication of fair market value. The Board has previously found that the sale of a subject property by a highly-motivated seller did not qualify as an arm's-length sale and thus should be excluded from a comparable-sales analysis. Bolduc v. Assessors of Norfolk, Mass. ATB Findings of Fact and Reports 2012-1163, 1172 (finding that relocation assistance provided by the seller's employer, together with the need of the seller to relocate for employment purposes, "provided [the seller] with motivation to accept less than fair market value for the subject property.").
In the instant appeals, the assessors contended that the sale of the subject to the appellants was not made at arm's length, because the seller was involved in a much publicized dispute over her assets with her former financial manager. However, given that the subject home was only one of many assets owned by the seller, and that she was not even using it as her primary home, the Board found that there was insufficient evidence to support a finding of compulsion. Moreover, Mr. Lorusso refuted the suggestion of duress when he testified to the appellants' lengthy, in his words, "drawn out," negotiating process to purchase the subject property from the seller. He further testified that the seller was well represented in that process by agents, accountants and attorneys. The Supreme Judicial Court has "given a narrow definition to the 'compulsion' that requires exclusion of evidence of a sale." The Westwood Group, Inc. v. Board of Assessors of Revere, 391 Mass. 1012, 1013 (1984) (citing United-Carr, Inc. v. Cambridge Redevelopment Auth., 362 Mass. 597, 600 (1972)). The Board found that Mr. Lorusso's credible testimony contradicted the assessors' suggestion that the sale of the subject property was not made at arm's length.
However, while the Board found the sale of the subject to be relevant evidence of its fair market value, the Board is also guided by the principle that a "single sale does not necessarily reflect market value." Appraisal Institute, The Appraisal of Real Estate 317 (13th ed. 2008). The Board thus looked beyond the sale of the subject property to sales of other comparable property in the relevant market area. "[S]ales of property usually 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). Sales of comparable realty in the same geographic area and within a reasonable time of the assessment date generally contain probative evidence for determining the value of the property at issue. Graham v. Assessors of West Tisbury, Mass. ATB Findings of Fact and Reports 2007-321, 400 (citing McCabe v. Chelsea, 265 Mass. 494, 496 (1929)), aff'd 73 Mass. App. Ct. 1107 (2008).
Properties are "comparable" when they share "fundamental similarities" with the subject property, including age, location and size. See Lattuca v. Robsham, 442 Mass. 205, 216 (2004). "[B]asic comparability is established upon considering the general character of the properties." New Boston Garden Corp., 383 Mass. at 470. "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."
In the present appeals, the Board first found credible Mr. Partridge's testimony that Monument Street was a uniquely prestigious and valuable neighborhood in Concord, and that properties not located on Monument Street required too many adjustments to lend themselves to meaningful comparison with those on Monument Street. The Board, therefore, looked only to the appellants' and appellee's comparable properties on Monument Street as well as 210 Monument Farm Road, which nearly abutted the subject property.
With respect to the comparable-sale properties, however, the Board disagreed with several key adjustments made by both the appellants' expert and by the assessors. As it has in past appeals, the Board rejected the appellants' contention here that woods, wetlands and buffer area have little to no value because they are unbuildable. See e.g., Lareau v. Assessors of Norwell, Mass. ATB Findings of Fact and Reports 2013-1066, 1085 (citing Mashpee Wampanoag Indian Tribal Council, Inc. v. Assessors of Mashpee, 370 Mass. 420, 421 (1980)); Cline v. Assessors of Canton, Mass. ATB Findings of Fact and Reports 1996-677, 681; Autumn Gates Estates, LLC & Fox Gate LLC v. Assessors of Millbury, Mass. ATB Findings of Fact and Reports 2013-822, 861. Instead, the Board found that the subject property's excess land provided privacy and an appealing sylvan setting for the subject property, thereby enhancing its market value.
The Board likewise rejected Mr. Marchant's adjustments for the value of the carriage house and Mr. Partridge's adjustments for quality and grade of construction and for style and condition. The mere qualification of a person as an expert does not endow his testimony with any magic qualities. Boston Gas Co., 334 Mass. at 579. "The board [is] not required to believe the testimony of any particular witness but it [can] accept such portions of the evidence as appear[] to have the more convincing weight. Assessors of Quincy v. Boston Consolidated Gas Co., 309 Mass. 60, 72 (1941). See also North American Philips Lighting Corp. v. Assessors of Lynn, 392 Mass. 296, 300 (1984); New Boston Garden Corp., 383 Mass. at 473; Jordan Marsh v. Assessors of Malden, 359 Mass. 106, 110 (1971).
After giving weight to the timely sale of the subject property along with others located on Monument Street and 210 Monument Farm Road, and making adjustments to account for various differences, the Board arrived at a fair cash value of $3,350,000 for the subject property for both fiscal years at issue.
In evaluating the evidence before it, the Board selected among the various elements of value and formed its own independent judgment of fair cash value. General Electric Co., 393 Mass. at 605; North American Philips Lighting Corp., 392 Mass. at 300. The Board need not specify the exact manner in which it arrived at its valuation. Jordan Marsh, 359 Mass. at 110. The fair cash value of property cannot be proven with "mathematical certainty and must ultimately rest in the realm of opinion, estimate and judgment." Boston Consolidated Gas Co., 309 Mass. at 72.
Based on the evidence presented, the Board found and ruled that the fair market value of the subject property was $3,350,000 for both fiscal years at issue. Accordingly, the Board issued decisions for the appellant in these appeals and granted abatements of $9,282.69, inclusive of the CPA surcharge, for fiscal year 2013 and $12,320.07, inclusive of the CPA surcharge, for fiscal year 2014.
THE APPELLATE TAX BOARD
By: ________________________________
Thomas W. Hammond, Jr., Chairman
A true copy,
Attest: ____________________________
Clerk of the Board
This amount does not include the Community Preservation Act ("CPA") surcharge of $844.79.
This amount does not include the CPA surcharge of $886.51.
There was some discrepancy between the appellants' expert and the assessors as to the above-grade living area. The property record card for the subject property, maintained by the appellee, lists the above-grade living area as 9,759 square feet. However, Mr. Marchant testified that he measured the subject home himself and noted that, with the subject home's Cape style, there was a significant amount of eave space. Considering that Mr. Marchant measured the subject home himself, the Board found his above-grade living area to be more persuasive and thus adopted 8,913 square feet as the above-grade living area for the subject home.
However, Mr. Partridge's claim is based on the appellee's measurement of the subject property's living area, which the appellant's expert testified, and the Board so found, included a significant amount of unusable eave space and therefore should not be included as part of the gross living area. Using the gross living area found by the Board, the sale price per square foot is actually about $311.
The Board did not give weight to the sale of 1199 Monument Street, which was offered for comparison by the assessors, finding that it was too dissimilar from the subject to provide a reliable indicator of the subject's value.
ATB 2016-287
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