Sunset Realty Group of the Berkshires v. Board of Assessors of the Town of Peru (July 31, 2008)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



SUNSET REALTY GROUP 		v.	BOARD OF ASSESSORS OF
OF THE BERKSHIRES				THE TOWN OF PERU


Docket No. F293474				Promulgated:
							July 31, 2008
					


	This is an appeal filed under the informal procedure pursuant to G.L. c. 58A, § 7 and G.L. c. 59, §§ 64 and 65 from the refusal of the Assessors of the Town of Peru ("assessors" or "appellee") to abate taxes on real estate located in the Town of Peru, owned by and assessed to Sunset Realty Group of the Berkshires, Inc. ("appellant") under G.L. c. 59, §§ 11 and 38, for fiscal year 2007.
	Commissioner Mulhern ("Presiding Commissioner") heard the appeal and, in accordance with G.L. c. 58A, § 1 and 831 CMR 1.20, issued a single-member decision for appellant.
	These findings of fact and report are made pursuant to a request by the appellee under G.L. c. 58A, § 13 and    831 CMR 1.32.
	Robin Wadsworth, Director, pro se, for appellant.
	Karen Tonelli, assessor, for the appellee.
FINDINGS OF FACT AND REPORT
	Based on the testimony and exhibits offered into evidence at the hearing of this appeal, the Presiding Commissioner made the following findings of fact.
	On January 1, 2006, appellant was the assessed owner of six vacant unimproved parcels (collectively "the subject parcels") located in the Lafayette Drive subdivision (the "subdivision") in the Town of Peru.  For fiscal year 2007, the assessors valued the subject parcels and assessed taxes, at the rate of $16.92 per thousand, as follows:
Location	Lot	Size
(Acres)	Assessed Value	Tax Assessed	
 0 West Main Rd.	26-52	2.00	$52,000	$  879.84	
 1 Lafayette Dr.	26-10	2.03	$52,500	$  888.30	
 3 Lafayette Dr.	26-63	2.01	$52,300	$  884.92	
 4 Lafayette Dr.	26-53	2.00	$52,000	$  879.84	
11 Lafayette Dr.	26-59	2.07	$53,100	$  898.45	
12 Lafayette Dr.     
   (water view)	26-57	2.67	$70,400	$1,191.17	
Total			$332,300	$5,622.52	

On January 16, 2007, the Peru Collector of Taxes mailed the fiscal year 2007 tax bills. Appellant timely paid the taxes due without incurring interest.  On February 12, 2007, appellant filed a separate Application for Abatement for each of the six parcels.  The assessors denied the applications on April 23, 2007.  
Appellant sought and received permission from the Appellate Tax Board ("Board") to file a single appeal that included the six parcels and it timely filed its appeal on July 17, 2007.    On the basis of the foregoing, the Presiding Commissioner found that the Board had jurisdiction over this appeal.   
In support of its abatement claim, appellant offered the testimony of its President, Mr. William Tatro, and a member of its Board of Directors, Mr. Robin Wadsworth;  appellant also introduced several exhibits, including a summation of the development and sales history of the subdivision, a copy of the subdivision plan, a copy of the assessors' Map 26, a comparison of the subject parcels' fiscal years 2006 and 2007 assessments, a comparison of assessments on abutting lots for fiscal years 2006 and 2007, and property record cards for lots within the subdivision and also abutting lots on Marlow Drive and Ash Lane.
According to the subdivision plan, signed and approved by the Peru Planning Board on October 14, 1991, the subdivision consists of thirteen lots of at least 2 acres.  Seven of the lots provide a view of Lake Ashmere in Hinsdale.  As of the date of the hearing, only six lots had sold, five with water views and one with no water view.  The sales data is as follows:
Lot		Sale Date		Sale Price
	 4		 11/16/95		  $25,000
	 7		 05/02/96	 	  $30,000
	 3		 04/09/97		  $18,000  No view
	 9		 05/23/91		  $42,000
	10		 02/24/04		  $60,000
	 5		 04/13/04		  $55,000 

The parcels at issue in this appeal are the one remaining water-view lot and five of the six non-water-view lots which had not been sold as of the hearing date.  
For fiscal year 2006, all of the parcels at issue in this appeal, with the exception of lot 26-52, were classified by the assessors as Neighborhood 4.  Lot 26-52, located at the corner of Lafayette Drive and West Main Road, was classified as Neighborhood 1.  Appellant testified that there are two driveway cuts on West Main Road and a long-standing stone wall along the Lafayette Drive frontage which the developers had no intention of disturbing to create a driveway on Lafayette Drive.  Therefore, the lot had a West Main Road address and, unlike the Lafayette Drive properties, was included in Neighborhood 1.
For fiscal year 2007, the assessors reclassified all of the parcels at issue as Neighborhood 5.  As outlined in the following table, the assessed values increased substantially from fiscal year 2006 to fiscal year 2007.  
  Location	Parcel
Id.	FY 2006 Assessed Value	FY 2007
Assessed Value	
 0 West Main Rd.	26-52	$21,500	$52,000	
 1 Lafayette Dr.	26-10	$34,300	$52,500	
 3 Lafayette Dr.	26-63	$34,200	$52,300	
 4 Lafayette Dr.	26-53	$34,000	$52,000	
11 Lafayette Dr.	26-59	$34,600	$53,100	
12 Lafayette Dr.     
   (water view)	26-57	$45,700	$70,400	

In the present appeal, appellant argued that the         re-classification was unwarranted and, as a result, the subject parcels were overvalued for fiscal year 2007.
In valuing vacant unimproved lots in Peru, the assessors allowed a fifteen percent vacancy discount to account for the cost of installing a well and septic system.  Once the lot was improved with a well and septic system ("improved lot"), the assessors removed the discount.  Additionally, the assessors increased the value of water-view lots by a thirty percent influence adjustment.  Therefore, appellant argued, the fair market value of a vacant, unimproved, non-water-view lot is forty-five percent less than an improved, water-view lot.  Appellant offered into evidence the deeds for the most recent sales in the subdivision, two unimproved, water-view lots that sold on February 24, 2004 and April 13, 2004, for $60,000 and $55,000, respectively.  Relying on the average sale price of $57,500, appellant maintained that the fair market value of an improved, water-view lot, after removing the fifteen percent vacancy discount, is $67,700. Furthermore, appellant argued, the fair market value of a vacant, unimproved, non-water-view lot is $37,235, calculated at forty-five percent less than the value of an improved, water-view lot.  
Appellant also offered into evidence property record cards for abutting lots located on two adjacent streets, Marlow Drive and Ash Lane.  Although these lots are similar, to the subject parcels in terms of general location, size, and, with the exception of the one water-view parcel at issue in this appeal, lack of view, the abutting parcels remained classified as Neighborhood 4 and the fiscal year 2007 assessments remained stable.  Furthermore, the abutting parcels' fiscal year 2007 assessments were, on average, sixty-five percent less than the subject parcels.
In support of their assessments, the assessors offered the testimony of Karen Tonelli and various exhibits, including the requisite jurisdictional documents, assessors' meeting minutes for November 6 and 13, 2007, a sales history of the subdivision, and photographs of views of Lake Ashmere purportedly taken from lots in the subdivision.   
The assessors argued that the decision to reclassify the subject parcels was based on their general agreement that "the Lafayette Road neighborhood stood out" and "past vacant land sales as well as current house sales in that area."  The assessors also offered into evidence the sales data for the subdivision and maintained that this data supported the reclassification of the subject parcels and their fiscal year 2007 assessments.  The assessors offered no other affirmative evidence of value.
Based on the evidence presented, the Presiding Commissioner found there was sufficient credible evidence to support appellant's proposition that the subject parcels were overvalued for fiscal year 2007.  The Presiding Commissioner found that the 2004 sales of water-view lots supported a finding that the water-view lot at issue in this appeal, parcel 26-57, had a fair market value of $60,000 for fiscal year 2007.  	  
At their November 6, 2006 meeting, the assessors determined that land values in the Lafayette Drive neighborhood should be increased "due to past vacant land sales as well as current house sales in that area."  The assessors did not, however, offer any supporting sales data either in the immediate area or Town wide.  In fact, both appellant and the assessors were in agreement that the most recent sales within the subdivision occurred more than eighteen months prior to the relevant date of assessments.  Therefore, the Presiding Commissioner found that the evidence presented showed that the market was flat and that there was no indication of an increase in market value between the most recent sales in the subdivision and the relevant assessment date.    
The Presiding Commissioner further found that appellant's evidence, including property record cards and the assessors' map, provided further evidence to support a finding that the subject parcels were overvalued.
On this basis, the Presiding Commissioner found that appellant met its burden of proving that the subject parcels were overvalued for fiscal year 2007 as set forth in the following table.
Location	Parcel
Id.	Assessed Value	Fair Cash Value	
 0 West Main Rd.	26-52	$52,000	$34,000	
 1 Lafayette Dr.	26-10	$52,500	$34,000	
 3 Lafayette Dr.	26-63	$52,300	$34,200	
 4 Lafayette Dr.	26-53	$52,000	$34,000	
11 Lafayette Dr.	26-59	$53,100	$34,600	
12 Lafayette Dr.     
   (water view)	26-57	$70,400	$60,000	

In accordance with G.L. c. 58A, § 1, the Presiding Commissioner decided this appeal for appellant and abated $1,717.38 in real estate tax for fiscal year 2007.  

OPINION
The assessors are required to assess real estate at its fair cash value determined as of the first day of January of each 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 Co. v. Assessors of Boston, 334 Mass. 549,    566 (1956).  
	The appellant has the burden of proving that the subject 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 [B]oard 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). 
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 appeal, appellant challenged the value of the subject parcels by introducing evidence of sales within the subdivision and also the fiscal year 2007 assessments of comparable abutting parcels.  "At any hearing relative to the assessed fair cash valuation . . . of property, evidence as to the fair cash valuation . . . at which assessors have assessed other property of a comparable nature . . . shall be admissible."  G.L. c. 58A, § 12B.  The Presiding Commissioner found this evidence persuasive and credible to establish the fair cash value of the subject parcels for the fiscal year at issue.  In contrast, the appellee offered no credible evidence to challenge or contradict appellant's analysis.
Based on the evidence presented, the Presiding Commissioner found and ruled that appellant met its burden of proving that the subject parcels were overvalued for fiscal year 2007.  On this basis, the Presiding Commissioner issued a decision for appellant in this appeal.
	
						APPELLATE TAX BOARD


				By:	___________________________________
					Thomas J. Mulhern, Commissioner



A true copy,

Attest: ________________________________
         Clerk of the Board
	

 Pursuant to C. 58A, § 7A, the assessors elected to have appellant's appeal transferred from the Board's Informal Procedure to the Formal Procedure.
Although addressed on West Main Road, Lot 26-52 is identified as Lot 1 on the Lafayette Drive subdivision plan.  
Pursuant to G. L. c. 58A, § 7A, "[n]o statement under the informal procedure shall relate to an assessment on more than one parcel of real estate, except where the board shall specifically permit otherwise." 
 The Lafayette Drive parcels' assessments increased by approximately 54%, and the West Main Road assessment increased by approximately 142%.  

ATB 2008 -995