Abraham W. & Linda F. Haddad v. Board of Assessors of the City of Worcester (July 21, 2015) and Nava Ermolieff v. Board of Assessors of the City of Worcester (July 21, 2015)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



ABRAHAM W. & LINDA F. HADDAD    v.	    BOARD OF ASSESSORS OF THE 
    CITY OF WORCESTER
Docket No. F320754
			   

NAVA ERMOLIEFF				  v.     BOARD OF ASSESSORS OF THE 
    CITY OF WORCESTER
Docket No. F320786

							    Promulgated:			
							    July 21, 2015


	These are appeals 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 City of Worcester ("appellee" or "assessors") to abate taxes on certain real estate in Worcester owned by and assessed to Abraham W. & Linda F. Haddad and also Nava Ermolieff (collectively, "appellants") under G.L. c. 59, §§ 11 and 38, for fiscal year 2013 ("fiscal year at issue").  
	Commissioner Rose ("Presiding Commissioner") heard these appeals under G.L. c. 58A, § 1A and 831 CMR 1.20 and issued single-member decisions for the appellee.      
	These findings of fact and report are made pursuant to requests by the appellants under G.L. c. 58A, § 13 and 831 CMR 1.32.  
	Kenneth W. Gurge, Esq. for the appellants.

	John F. O'Day, Jr., Esq. for the appellee.



FINDINGS OF FACT AND REPORT
These findings of fact and report involve two consolidated appeals of two residential condominium units located in the same condominium complex in the city of Worcester.  The appellants were represented by the same attorney and their appeals were heard consecutively on the same day; they also offered the same real estate valuation expert and used essentially the same valuation analysis.  Because of the similarities of the properties and issues, the Presiding Commissioner, with the consent of the parties, consolidated these appeals.  
The properties are referred to herein by their corresponding street addresses or, in the proper context, each as the "subject unit."  Collectively, these properties are referred to as the "subject units."
On the basis of the testimony and exhibits offered into evidence at the hearing of these appeals, the Presiding Commissioner made the following findings of fact. 
On January 1, 2012, the relevant assessment date for the fiscal year at issue, Abraham W. and Linda F. Haddad were the assessed owners of a condominium unit located at 13 Summerland Way, Unit #43, in Worcester.  For assessment purposes the subject unit is identified as map 50, block 23, lot 05-07.  The subject unit is an end-unit, two-story, townhouse-style condominium with a total of seven rooms, including two bedrooms and also two full bathrooms and one half bathroom, with a total living area of 2,435 square feet.  Additional amenities include central air conditioning, a fireplace, a deck, and a two-car attached garage.  The Haddads purchased the subject unit on June 30, 2011 for $500,000.  
On January 1, 2012, Nava Ermolieff was the assessed owner of an end-unit, two-story, townhouse-style condominium located at 7 Newington Lane, Unit #5, in Worcester. For assessment purposes the subject unit is identified as map 50, block 23, lot 43-13.  The subject unit	has a total of six rooms, including two bedrooms and also two full bathrooms and one half bathroom, with a total above-grade living area of 1,954 square feet.  Additional amenities include central air conditioning, a fireplace, a deck, a two-car attached garage, and a full finished basement.    
For the fiscal year at issue, the assessors valued the subject units and assessed taxes as follows.
Docket Number	Address	Assessed Value	Tax Rate 	Tax Assessed	
F320754	13 Summerland Way	$452,400	$18.58	$8,405.59	
F320786	 7 Newington Lane	$360,500	$18.58	$6,698.09	

The Collector of Taxes for Worcester mailed the actual tax bills for the fiscal year at issue on December 31, 2012, and, in accordance with G.L. c. 59, § 57C, the appellants paid the taxes due without incurring interest. On February 1, 2013, in accordance with G.L. c. 59, § 59, the appellants timely filed Applications for Abatement with the assessors, which were denied by the assessors on April 1, 2013. In accordance with G.L. c. 59, §§ 64 and 65, the appellants seasonably filed their petitions with the Board on June 28, 2013. On the basis of these facts, the Presiding Commissioner found and ruled that the Appellate Tax Board ("Board") had jurisdiction to hear and decide these appeals.
	In support of their claims that the subject units were overvalued for the fiscal year at issue, the appellants offered the testimony and summary appraisal reports of Robert Sandell, a certified real estate appraiser whom the Presiding Commissioner qualified as an expert witness in the field of real estate valuation.  For his sales-comparison analyses, Mr. Sandell used the same four purportedly comparable properties, three of which were located in the same development as the subject units and one that was located in nearby Holden.  These properties sold between January 27, 2011 and May 31, 2012, with sale prices that ranged from $286,483 to $303,613.  In each of his appraisal reports, Mr. Sandell made adjustments to his purportedly comparable units' sale prices to account for differences with the subject properties, including: location, living area, finished basement, garage spaces, condominium position (end unit v. middle unit) and model upgrades.  Based on his sales-comparison analyses, Mr.  Sandell determined that the subject units' fair market values for the fiscal year at issue were as follows: $372,000 for 13 Summerland Way; and $350,000 for 7 Newington Lane. 
Mr. Sandell noted in his appraisal reports that 13 Summerland Way sold on June 30, 2011, six months prior to the relevant valuation date, for $500,000, which is more than the subject units' assessed values.  Mr. Sandell observed that this transaction was a cash sale, which did not require an appraisal report, and, therefore, in his opinion, it was not indicative of the market.  
	For their part, the assessors offered into evidence the requisite jurisdictional documents and also a copy of the deed for the sale of 13 Summerland Way.
Based on all of the evidence, the Presiding Commissioner found and ruled that the appellants failed to meet their burden of proving that the subject units were overvalued for the fiscal year at issue.  The Presiding Commissioner found that the sale of 13 Summerland Way on June 30, 2011 for $500,000 was entitled to significant weight in his analyses. The appellants' real estate valuation expert submitted no evidence indicating that the sale was made under compulsion or was in any other way not an arm's-length transaction.  Moreover, the Presiding Commissioner found that Mr. Sandell's testimony that the Haddads overpaid for their subject unit was unsubstantiated and therefore, not credible.  Accordingly, as a freely-entered, arm's-length sale, the Presiding Commissioner found that the sale price of 13 Summerland Way, which occurred approximately six months prior to the relevant date of assessment, was the best evidence of the subject units' fair cash values for the fiscal year at issue.
The Presiding Commissioner also found that Mr. Sandell did not sufficiently articulate or support how he arrived at his adjustments for location, living area, finished basement, garage spaces, condominium position, and model upgrades.  Although he testified that these adjustments were based on market data, he did not provide any evidence to support this assertion.  Accordingly, the Presiding Commissioner found that Mr. Sandell's adjustments were unsubstantiated and, therefore, not persuasive.
Therefore, based on all of the evidence, as well as his subsidiary findings, particularly in light of the sale of one of the subject units, the Presiding Commissioner found and ruled that the appellants failed to meet their burden of proving that the subject units were overvalued for the fiscal year at issue. As a result, the Presiding Commissioner issued decisions for the appellee in these appeals.
                        OPINION
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 appellants have the burden of proving that property has a lower value than that assessed.  "'The burden of proof is upon the petitioner[s] to make out [their] 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)).  In appeals before this Board, taxpayers may sustain their burden by introducing evidence of fair cash value, or by proving that the assessors erred in their method of valuation.  General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 600 (1984) (citing Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983)).  
	It is well settled that actual sales of the subject property are "'very strong evidence of fair market value, for they represent 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).  In the present appeals, the Presiding Commissioner found that the sale of 13 Summerland Way on June 30, 2011 for $500,000 was entitled to significant weight.  The Presiding Commissioner further found that there were no facts in the record to indicate that Mr. Haddad's purchase of 13 Summerland Way was anything but an arm's-length transaction consummated under no compulsion.  
	The appellants' real estate valuation expert advanced sales-comparison analyses in an effort to prove that the subject units were overvalued for the fiscal year at issue.  "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) (internal quotation marks omitted).  Properties are considered "comparable" when they share "fundamental similarities" with the subject property, including age, location, and size. 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."  New Boston Garden Corp., 383 Mass. at 470.  
	In the present appeals, the Presiding Commissioner found that the appellants' real estate expert did not sufficiently articulate how he arrived at his adjustments for location, living area, finished basement, garage spaces, condominium position, and model upgrades.  Although he testified that these adjustments were based on market data, he did not provide any evidence to support this assertion.  Thus, the Presiding Commissioner found that Mr. Sandell's comparable-sales analyses were not persuasive indicators of the fair market value of the subject units for the fiscal year at issue. 
	Based on all of the evidence presented, as well as his subsidiary findings, the Presiding Commissioner found and ruled that the appellants failed to meet their burden of proving a fair market value for the subject units that was less than their assessed values for the fiscal year at issue.  Accordingly, the Presiding Commissioner issued decisions for the appellee in these appeals.

				        THE APPELLATE TAX BOARD

  				    By:	   			______	  
				       James D. Rose, Commissioner



A true copy,


Attest:	______		_____
	    Clerk of the Board

ATB 2015-401