Jeffrey J. Cohen, Trustee v. Board of Assessors of the Town of Weston (May 11, 2010)

COMMONWEALTH OF MASSACHUSETTS

		      APPELLATE TAX BOARD


JEFFREY J. COHEN, TRUSTEE	v.	   BOARD OF ASSESSORS OF  
 							   THE TOWN OF WESTON			   
Docket Nos. F280819, F284377		   Promulgated:
		  F292415, F294465		   May 11, 2010
							   
							
	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 appellee, Board of Assessors of the Town of Weston ("assessors"), to abate taxes on certain real estate located in the Town of Weston, owned by and assessed to the appellant under G.L. c. 59, §§ 11 and 38, for fiscal years 2005, 2006, 2007 and 2008.
	Commissioner Egan heard these appeals.  Chairman Hammond and Commissioners Scharaffa, Rose, and Mulhern joined her in decisions for the appellee in Dockets F280819 and F294465 (fiscal years 2005 and 2008, respectively) and in decisions for the appellant in Dockets F284377 and F292415 (fiscal years 2006 and 2007, respectively). 
These findings of fact and report are made pursuant to a request by the appellant under G.L. c. 58A, § 13 and 831 CMR 1.32.  
	

Mark F. Murphy, Esq. for the appellant.
	Ellen M. Hutchinson, Esq. for the appellee.

FINDINGS OF FACT AND REPORT
On the basis of the testimony and exhibits offered into evidence at the hearing of these appeals, the Appellate Tax Board ("Board") made the following findings of fact.
On January 1, 2004, January 1, 2005, January 1, 2006 and January 1, 2007, Jeffrey J. Cohen, Trustee of the Winsor Meadow Realty Trust ("appellant") was the assessed owner of a certain parcel of real estate located at 50 Winsor Way in the Town of Weston ("subject property").  For fiscal year 2005, the assessors valued the subject property at $5,719,400 and assessed a tax thereon, at the rate of $9.46 per $1,000, in the total amount of $54,105.52.  The appellant timely paid the tax in full without incurring interest.  On January 10, 2005, the appellant timely applied to the appellee for an abatement, claiming that the subject property was overvalued.  The appellee denied the appellant's request on April 5, 2005.  The appellant seasonably filed his petition with the Board on June 27, 2005.  Accordingly, the Board found and ruled that it had jurisdiction to hear and decide the appeal for fiscal year 2005.
For fiscal year 2006, the appellee valued the subject property at $6,952,000 and assessed a tax thereon, at the rate of $9.95 per $1,000, in the total amount of $69,172.40.  The appellant timely paid the tax in full without incurring interest.  On January 26, 2006, the appellant timely applied to the appellee for an abatement, claiming that the subject property was overvalued.  The appellee denied the appellant's request on March 21, 2006.  The appellant seasonably filed his petition with the Board on June 6, 2006.  Accordingly, the Board found and ruled that it had jurisdiction to hear and decide the appeal for fiscal year 2006.
For fiscal year 2007, the appellee valued the subject property at $6,898,800 and assessed a tax thereon, at the rate of $10.26 per $1,000, in the total amount of $70,781.68.  The appellant timely paid the tax in full without incurring interest.  On February 1, 2007, the appellant timely applied to the appellee for an abatement, claiming that the subject property was overvalued.

The appellant's application was deemed denied on May 1, 2007.  The appellant seasonably filed his petition with the Board on July 12, 2007.  Accordingly, the Board found and ruled that it had jurisdiction to hear and decide the appeal for fiscal year 2007.
For fiscal year 2008, the appellee valued the subject property at $7,033,500 and assessed a tax thereon, at the rate of $10.67 per $1,000, in the total amount of $77,298.87.  The appellant timely paid the tax in full without incurring interest.  On February 1, 2008, the appellant timely applied to the appellee for an abatement, claiming that the subject property was overvalued.  The appellee denied the appellant's request on March 4, 2008.  The appellant seasonably filed his petition with the Board on April 25, 2008.  Accordingly, the Board found and ruled that it had jurisdiction to hear and decide the appeal for fiscal year 2008.
The appellant presented his appeal through the testimony of three witnesses: (1) Stephen Ozahowski, whom the Board qualified as an expert in real estate valuation; (2) the appellant; and (3) Eric Josephson, the Principal Assessor for the Town of Weston.  The appellee did not call any witnesses but cross-examined each of these witnesses.  
The Town of Weston ("Weston") is a desirable suburban community, located west of Boston, which contains many luxury homes and estate properties.  The subject property is located in a neighborhood in Weston that has among the highest property values in the Town and also abuts a golf course.  The subject property has excellent access to Routes 16, 9, 20, 27, 30, Interstate 90 (Massachusetts Turnpike) and Interstate 95.  The subject property contains 2.23 acres of land.  
The appellant purchased the subject property in July, 2001 for $2,000,000.  The appellant demolished the older home that was on the subject site and began construction of the home that is currently on the site in September, 2001.  The property record cards submitted into evidence indicate that, on the date of purchase, the subject property's address was 299 Meadowbrook Road.  The subject property's address changed to 50 Winsor Way on April 9, 2003.  
After construction was completed in April, 2008, the subject home contained 9,839 square feet of living space.  The home is a two-story, modern, Colonial-style home with a stucco-on-wood exterior and a wood-shingle gable/hip roof.  The home is heated by forced air and radiant heating and is equipped with a custom HVAC system, which includes central air conditioning.  The home also features a central vacuum system.  The subject property has public water and a septic system, because there is no public sewer in Weston. 
The home has seventeen rooms, including five bedrooms, as well as seven full bathrooms, three half bathrooms and four fireplaces.  The master bathroom includes high-end fixtures, marble tile, and a large shower area with a separate whirlpool tub.  The main entrance opens to a grand reception hall foyer, with two coat closets and a half bathroom, which leads to a living room with a fireplace, a library with a fireplace, a conservatory, a gallery, a two-story family room with a fireplace, a dining room and a gourmet kitchen with commercial-grade appliances, an adjoining butler's pantry, and a separate breakfast/informal dining area.  Additional rooms on the first floor include the master bedroom suite, which contains a master bedroom with a fireplace and the master bathroom, a laundry room, a mud room, and an exercise room.  The first floor has hardwood flooring, with the exception of the master bathroom and two half bathrooms, which have marble tiling.  Additionally, the grand reception hall foyer and the conservatory have honed limestone flooring.  The ceiling height on the first floor is approximately 10 feet, and the ceilings in the gallery are vaulted.   
The second floor hall has a view overlooking the grand reception hall foyer and a door opening to an exterior balcony overlooking the private backyard grounds.  The second floor has four bedrooms, each with its own private bathroom and closet; two of the bedrooms have their own separate dressing closet.  Additional rooms on the second floor include the second floor laundry room, a half bathroom, a small media room, a sitting room, and a billiards room with a cathedral ceiling.  The second floor living space is carpeted.  
Eighty percent of the basement is finished; the remainder is a small area for utility and storage.  The basement includes a large family room, a recreation room with a wet bar, a walk-in wine cellar, a custom home theater, two full bathrooms, and a sauna.  The utility and storage area includes a large walk-in luggage storage closet.    
The home includes a 1,102 square-foot patio with an outside fireplace/barbeque, a 56 square-foot porch, a 256 square foot deck, and an attached four-car finished and heated garage.  The grounds are professionally landscaped.  
The appellant's real estate valuation witness, Mr. Ozahowski, testified that the subject property is a "luxury" home, and that luxury homes are characterized by many amenities like custom cabinetry, high-end workmanship, commercial-grade appliances, extra rooms like wine cellars and home theaters, and many finishes completed to the taste of the owner.  Mr. Ozahowski also testified that as of the first relevant assessment date of these appeals, the subject property's neighborhood was beginning to change.  Older "estate" properties - properties that include large parcels of land and older homes built in the early 1900s -  were being sold, and the older homes were being demolished and replaced with much larger luxury homes like the subject home.  
The following details the evidence of record concerning the state of construction of the subject home and the evidence of value presented by the witnesses for each fiscal year at issue.

Fiscal year 2005
Mr. Cohen testified to the condition of the home as of June 30, 2004.  He explained that, as of the relevant assessment date, the subject home was still under construction.  The home was weather-tight, the interior drywall, blueboard and skimcoating had been installed, utilities were mostly installed, and the kitchen and bathroom cabinetry and fixtures were on site.  However, many rooms remained incomplete.  In particular, the library, the rooms over the garage, and the basement rooms were incomplete.  Mr. Cohen also explained that some of the features of the home's construction were defective and in need of repair, particularly the exterior stucco, many of the interior floors and trim, and the HVAC system.  
Mr. Ozahowski performed a comparable-sales analysis.  Mr. Ozahowski testified that he selected the properties to include in his analysis by reviewing Multiple Listing Service ("MLS") data and choosing the highest valued sales in Weston.  For fiscal year 2005, Mr. Ozahowski selected five purportedly comparable sales in Weston - 32 Cart Path Road, 41 Skating Pond Road, 445 Concord Road, 18 Stonecroft Circle, and 22 Pelham Road.  The closest comparable-sale property was one block away and the farthest was 3.5 miles from the subject property.  The comparable-sale properties ranged in size from 2.02 acres to 3.52 acres and were improved with luxury homes ranging in gross living area from 5,165 square feet to 11,274 square feet.  After applying his adjustments, the adjusted sale prices for these five sales yielded a range from $4,264,700 to $4,983,700.  Mr. Ozahowski did not review the deeds for his comparable-sale properties, relying instead solely upon the MLS listings.  However, the sale prices for two of his comparable-sale properties - 41 Skating Pond Road and 445 Concord Road - were incorrectly listed on the MLS listings.  
Mr. Ozahowski made a $500,000 adjustment to each of his comparable-sale properties for functional utility, to take into account the incomplete state of the subject home.  Mr. Ozahowski based his $500,000 functional utility adjustment on a 2004 an earlier appraisal of the subject property prepared on behalf of Citizens Bank for financing purposes.  The Addendum to this appraisal gave a range of $500,000 to $750,000 for the cost to complete the various items listed.  Based on the adjusted sale prices of his comparable properties, Mr. Ozahowski testified that the subject property's value as of the relevant assessment date was $4,500,000, which was about the median of his adjusted sale prices for his comparable-sale properties.
Mr. Josephson, Weston's assessor, inspected the subject home on June 30, 2004, and using a construction checklist, he determined that the home was 79 percent completed.  Mr. Josephson's report details a comparable-sale analysis using three comparable sales in Weston - 41 Skating Pond Road, 4 Nottingham Lane, and 22 Pelham Road.  The comparable-sale properties ranged in size from 2.35 acres to 5.84 acres and were improved with luxury homes ranging in gross living area from 7,512 square feet to 8,947 square feet.  The closest comparable-sale property was one block away and the farthest was 2.25 miles from the subject property.   Two of his comparable-sale properties - 41 Skating Pond Road and 22 Pelham Road - were also used by Mr. Ozahowski as comparable-sale properties.  After applying his adjustments, the adjusted sale prices for Mr. Josephson's three comparable sales yielded a range from $4,899,900 to $5,960,800.  Based upon his comparable-sale analysis and his determination of the home's completion, Mr. Josephson concluded that the subject property's assessed value for fiscal year 2005 should be $5,719,400.  The property record card on file indicates that the fiscal year 2005 assessment accounted for the fact that the property was about 79 percent completed for fiscal year 2005.  

Fiscal year 2006
Mr. Cohen testified to the condition of the subject home as of June 30, 2005.  He explained that the subject home was nearing completion, but many items still remained incomplete, and defects in the original construction of the home had become evident.  Repairs to the construction, estimated at about $200,000, needed to be completed on the subject home.  In particular, the HVAC system was inadequate, moisture was entering the home and creating mold, the walls were cracking even after they were repaired, the floors were defective, cabinets were still not installed, some lighting fixtures still needed installation, trim and stairways were being repaired, and the exterior stucco had been installed incorrectly.  Painting inside the home also was not completed.  Mr. Cohen testified that the subject home was a "work zone," with some rooms closed off with plastic sheeting.  Mr. Cohen also testified that he and his family vacated the subject home during the summer so that the builders could complete repairs.  The family moved back to the subject home in September, 2005.    
Mr. Ozahowski performed a comparable-sale analysis for fiscal year 2006.  He selected five purportedly comparable properties in Weston - 1 Dogwood Road, 36 Love Lane, 211 Westerly Road, 103 Rolling Lane, and 66 Doublet Hill Road.  The closest comparable-sale property was 0.25 miles and the farthest was 2.5 miles from the subject property.  The comparable-sale properties ranged in size from 1.44 acres to 4.29 acres and were improved with luxury homes ranging in gross living area from 6,590 square feet to 10,168 square feet.  After applying his adjustments, the adjusted sale prices for these five sales yielded a range from $4,468,700 to $6,030,600.  For two of his comparable-sale properties, Mr. Ozahowski applied over $1,000,000 in adjustments to the sale prices.  Based on the adjusted sale prices of his comparable properties, Mr. Ozahowski concluded that the subject property's value as of the relevant assessment date was $5,750,000.  
Again, Mr. Ozahowski applied a functional utility adjustment to all of his comparable-sale prices, this time in the amount of $200,000, to each of his comparable properties.  In his appraisal report, Mr. Ozahowski stated that the appellants were completing a punch list of items that were either not complete or defectively installed in the subject home, including interior painting, trim and moldings, two rooms and one bathroom in the basement which needed to be completed, and the defective exterior stucco.  Mr. Ozahowski's report stated that the owners estimated that $300,000 to $400,000 worth of work would be required to complete the subject home, but that Mr. Ozahowski considered a more reasonable estimate to be $200,000.  
The assessors valued the subject property at $6,952,000 for fiscal year 2006.  Mr. Josephson's report details a comparable sales analysis using four purportedly comparable sales in Weston: 148 Highland Street, 103 Rolling Lane, 16 Sanderson Lane, and 4 Willow Road.  The closest comparable property was 0.25 miles from the subject property and the farthest comparable property was 2 miles from the comparable property.  One of the properties was in the same neighborhood as the subject property and two others were in the immediately adjacent neighborhood.  The comparable properties ranged in size from 1.45 acres to 6.33 acres and were improved with luxury homes ranging in gross living area from 6,798 square feet to 11,228 square feet.  One of Mr. Josephson's comparable-sale properties required adjustments of over $1,000,000.  After applying his adjustments, Mr. Josephson's comparable properties ranged in adjusted sale prices from $6,353,000 to $7,465,700.  
Mr. Josephson admitted in his testimony that his photographs of the subject property and his descriptions of the subject home's interior in each of his four reports (one for each fiscal year at issue) were based on his last inspection of the subject property, which occurred on June 30, 2004.  The property record card for fiscal year 2006, like the one for fiscal year 2005, stated that, in the opinion of the assessors, the subject property was about 79 percent completed for fiscal year 2005, and that a temporary certificate of occupancy had been issued on September 16, 2004.  The Board found that, based on Mr. Josephson's admission and the lack of relevant information as to the state of construction of the subject home as of the relevant assessment date, the assessors did not inspect the property during the relevant assessment period for fiscal year 2006.



Fiscal year 2007
Mr. Cohen testified that, as of the relevant assessment date, many of the items on the punch list were still not completed.  The basement rooms, particularly the home theater and wine cellar, were still not completed.  Moreover, the walls were bulging because they were installed improperly, the hardwood floors were still not repaired properly, the trim and molding were still not repaired, and the driveway and landscaping were not complete.  The stucco also was still defective.  
Mr. Ozahowski performed a comparable-sale analysis for fiscal year 2007.  He selected three purportedly comparable properties in Weston - 103 Rolling Lane, 148 Highland Street, and 16 Sanderson Lane.  The closest comparable-sale property was 0.5 miles and the farthest was 2.5 miles from the subject property.  The comparable properties ranged in size from 1.45 acres to 2.51 acres and were improved with luxury homes ranging in gross living area from 6,798 square feet to 10,168 square feet.  After applying his adjustments, the adjusted sale prices for these three sales yielded a range from $5,850,800 to $6,395,600.  Based on the adjusted sale prices of his comparable-sale properties, Mr. Ozahowski stated that the subject property's value as of the relevant assessment date was $6,000,000. 
Again, Mr. Ozahowski applied a functional utility adjustment, this time in the amount of $100,000, to each of his comparable properties.  In his appraisal report, Mr. Ozahowski noted that, as of the relevant assessment date, interior painting was not complete, two of the four rooms and one of the two bathrooms in the basement were not yet complete, and negotiations were underway to remedy the exterior stucco.  Mr. Cohen also testified that much work was performed in the home during the Fall of 2006 and the Winter of 2007, after the relevant assessment date for fiscal year 2007, to complete the home theater and wine cellar.  Mr. Ozahowski believed that, as of the relevant assessment date, a reasonable estimate to complete the property was $100,000.  
The assessors valued the subject property at $6,898,800.  Mr. Josephson's report details a comparable- sales analysis using four comparable-sale properties in Weston -- 140 Meadowbrook Road, 180 Highland Street, 100 Meadowbrook Road, and 103 Rolling Lane - all of which were between 0.125 and 0.25 miles from the subject property.  The comparable-sale properties ranged in size from 1.96 acres to 3 acres and were improved with luxury homes ranging in gross living area from 6,562 square feet to 10,168 square feet.  Both Mr. Ozahowski and Mr. Josephson selected as a comparable-sale property 103 Rolling Lane, which Mr. Josephson had also selected for the previous  fiscal year.  After applying his adjustments, Mr. Josephson's comparable-sale properties ranged in adjusted sale prices from $6,734,000 to $7,821,400.  
As described earlier, Mr. Josephson admitted in his testimony that his descriptions of the subject home's interior in his report were based on his last inspection of the subject property, which occurred on June 30, 2004.  The property record card for fiscal year 2007 indicates that, in the opinion of the assessors, the subject property was about 79 percent completed for fiscal year 2005, and that a temporary certificate of occupancy had been issued on September 16, 2004.  The Board found that, based on Mr. Josephson's admission and the lack of relevant information as to the state of construction of the subject home as of the relevant assessment date, the assessors did not inspect the subject property during the assessment period for fiscal year 2007.  



Fiscal year 2008
Mr. Cohen testified that the subject's home theater was completed by the end of January, 2007, and the wine cellar was completed sometime in January or February, 2007.  The appellant also presented a punch list, prepared sometime in March, 2007, by the engineering firm of Simpson Gumpertz Heger, Inc., with input from the appellant and his wife, which contained over one thousand items to be completed.  Mr. Cohen testified that the builders completed construction of the subject home sometime in April of 2008, and while some of the items on the punch list were still not completed, he and his wife had grown "construction weary" and decided to cease further work to the home. 
Mr. Ozahowski prepared a comparable-sales analysis.  Mr. Ozahowski's report cited six purportedly comparable-sale properties in Weston - 5 Winsor Way, 180 Highland Street, 36 Love Lane, 60 Nobscot Road, 451 Wellesley Street, and 38 Winsor Way.  The closest comparable-sale property abutted the subject property and the farthest was 3 miles from the subject property.  The comparable-sale properties ranged in size from 1.38 acres to 6.28 acres and were improved with luxury homes ranging in gross living area from 5,650 square feet to 17,802 square feet.  After applying his adjustments, the adjusted sale prices for these six sales yielded a range from $5,080,500 to $7,235,500.  Based on the adjusted sale prices of his comparable-sale properties, Mr. Ozahowski stated that the subject property's value as of the relevant assessment date was $6,000,000.      
Again, as he had for the previous fiscal years, Mr. Ozahowski applied a functional utility adjustment, in the amount of $100,000, to his comparable properties.  Mr. Ozahowski's appraisal indicates that the subject home was "complete and occupied" as of the relevant assessment date.  However, the appraisal notes that the exterior stucco was still found to be defective as of January 1, 2007.  His appraisal reports that the stucco was remedied during the summer of 2007, at a cost of $150,000.  
The assessors valued the subject property at $7,033,500.  Mr. Josephson performed a comparable-sale analysis, citing the same four comparable-sale properties which he had cited for fiscal year 2007:  140 Meadowbrook Road, 100 Meadowbrook Road, 180 Highland Street, and 103 Rolling Lane.  These properties were all within 0.25 miles of the subject.  The comparable properties ranged in size from 1.96 acres to 3 acres and were improved with luxury homes ranging in gross living area from 6,562 square feet to 10,168 square feet.  After applying his adjustments, Mr. Josephson's comparable properties ranged in adjusted sale prices from $6,734,000 to $7,821,400.  
The comparable-sale properties which the Board found to be most similar to the subject property was 140 Meadowbrook Road, located only 0.125 miles from the subject property and in the same neighborhood for assessment purposes as the subject property. This property consists of a 1.96-acre parcel of land improved with a Colonial-style home with a gross living area of 9,569 square feet.  It contains a total of ten rooms, including five bedrooms, as well as five full bathrooms and three half bathrooms.  The comparable property includes a finished basement containing one recreation room, and extra amenities include an attached three-car garage as well as six fireplaces.  The comparable property sold on February 4, 2005 for $7,480,000.  Mr. Josephson arrived at an adjusted sales price as detailed below: 
140 Meadowbrook Road
                              
    Adjustments:		       Appellee's values

    Above grade room count:     	 $100,000
    Gross living area:	           $ 81,000
    Rooms below grade: 			 $150,000
    Garage size				 $ 20,000
    Fireplaces				     -$  9,600

    Net adjustment:	                $341,400
    Adjusted sale price:          $7,821,400

On the basis of the above facts submitted into evidence, the Board made the following findings of fact for each of the fiscal years at issue.

Fiscal year 2005
The Board was not persuaded by Mr. Ozahowski's comparable-sales analysis.  First, Mr. Ozahowski did not review the deeds for his comparable-sale properties, and two of his comparable-sale properties' sale prices were incorrectly listed on the MLS upon which he relied for his sales figures.  Moreover, the Board found that his $500,000 functional utility adjustment was too high and not supported by the actual state of the subject home as of the relevant assessment date for fiscal year 2005.  Mr. Ozahowski admitted that he simply extrapolated the $500,000 figure from a previous appraisal performed for financing purposes by a third-party appraiser who was not present at the hearing of these appeals to explain how he arrived at this adjustment.  
By contrast, Mr. Josephson inspected the home on June 30, 2004, and using a construction checklist, he determined that the home was 79 percent completed.  The property record card for fiscal year 2005 also indicates that the assessment for fiscal year 2005 accounted for the fact that the subject home was 79 percent completed.  The Board found that Mr. Josephson's method of using a construction checklist was a reliable and accepted means of measuring the degree of completion of the home, and the property record card reflected that the assessors took the degree of completion into account in valuing the home for fiscal year 2005.  The Board also found that Mr. Josephson's comparable-sale properties were sufficiently similar to the subject property to be probative evidence of the subject property's fair market value.  
The Board thus found that the appellant failed to establish that the home's degree of completion was not taken into account in the subject assessment.  Therefore, the Board found that the appellant failed to meet his burden of proving that the subject property's assessed value was in excess of its fair market value.  Accordingly, the Board issued a decision for the appellee for fiscal year 2005. 

Fiscal year 2006
The Board was not persuaded by Mr. Ozahowski's comparable-sales analysis by which he determined a fair market value for the subject property of $5,750,000.  Two of Mr. Ozahowski's comparable-sale properties required over $1,000,000 in adjustments to their sale prices, thus rendering them insufficiently comparable to the subject property to be probative evidence of the subject property's fair market value.  However, the Board found that Mr. Cohen and Mr. Ozahowski documented and proved that defects in the subject home as of the relevant assessment date would cost $200,000 to repair before an owner could sell the subject property on the open market for the prices suggested by Mr. Josephson's comparable-sales analysis.  Further, the assessors failed to inspect the home after June, 2004 and were, therefore, unaware of the state of completion of the home and its defects as of the relevant assessment date for fiscal year 2006.  The Board, therefore, found that, because the fiscal year 2006 assessment did not take into account the state of completion or significant defects, the appellant's $200,000 functional utility deduction to the assessed value of the subject property was warranted.  The Board thus deducted $200,000 from the fiscal year 2006 assessment to arrive at a fair cash value for the subject property of $6,752,000 and issued a decision for the appellant abating $2,049.70 in tax for fiscal year 2006.

Fiscal year 2007
The Board was not persuaded by Mr. Ozahowski's comparable-sales analysis by which he determined a fair market value of $6,000,000.  The Board found that two of the sales that Mr. Ozahowski selected - 148 Highland Street and 16 Sanderson Lane - were selected because they were lower in value than other comparable-sale properties in Weston.  As revealed by the sale of 103 Rolling Lane, as well as the three other sales selected by Mr. Josephson -- 140 Meadowbrook Road, 180 Highland Street, and 100 Meadowbrook Road, which were located in the same or immediately adjoining neighborhood to the subject property - sales of comparable properties in Weston were higher than Mr. Ozahowski portrayed them to be in his comparable-sale analysis.  The Board found that by neglecting to include these comparable-sale properties, which were located in the same or adjoining neighborhood to the subject property, Mr. Ozahowski's comparable-sale analysis was incomplete, skewed towards the lower end of the range of comparable property sales, and therefore insufficient to provide probative evidence of the subject property's fair market value.  By contrast, the Board found that Mr. Josephson's comparable-sales analysis was more complete, his sales were in very close proximity to the subject property, and therefore, his analysis was more reliable than Mr. Ozahowski's comparable-sale analysis. The Board also found that that the subject's assessed value of $6,925,000 was well within the range of $6,734,000 to $7,821,400, which Mr. Josephson determined in his comparable-sales analysis.   
However, the Board found that Mr. Cohen and Mr. Ozahowski documented and proved that defects in the subject home's stucco as of the relevant assessment date would cost $100,000 to repair before an owner could sell the property on the open market for the prices suggested by Mr. Josephson's comparable-sales analysis.  Further, the assessors failed to inspect the home after June, 2004, and were, therefore, unaware of the state of completion of the home and its defects as of the relevant assessment date for fiscal year 2007.  The Board, therefore, found that the fiscal year 2007 assessment did not take into account the state of completion or significant defects.  The Board thus found that the appellant's $100,000 functional utility deduction to the assessed value of the subject property was warranted.  Accordingly, the Board valued the subject property at $6,798,800 and issued a decision for the appellant abating $1,056.78 in tax for fiscal year 2007.

Fiscal year 2008
As indicated in Mr. Ozahowski's appraisal report, the subject home was essentially complete as of the relevant assessment date.  The only issue which the appellant supported with documentation was the exterior stucco, which was remedied during the summer of 2007.  
The Board found that, at $7,033,500, the subject's assessed value was well within the range of adjusted sales prices of Mr. Josephson's comparable-sale properties, which were all located in the same neighborhood or immediately adjoining neighborhood as the subject and all contained new or almost-new luxury homes.  The Board also found that 140 Meadowbrook Road, cited by the appellee, was particularly comparable to the subject property.  It was located within 0.125 miles of the subject property, in the same neighborhood for assessment purposes, and many of its features were very similar to those of the subject property: a 1.96-acre parcel of land, as compared with the subject's 2.23-acre parcel of land; a Colonial-style home with a gross living area of 9,569 square feet, as compared with the subject's Colonial-style home with a gross living area of 9,839 square feet; and the comparable property's five bedrooms, five full bathrooms and three half bathrooms, as compared with the subject's five bedrooms, seven full bathrooms and three half bathrooms.  The Board also found that Mr. Josephson made appropriate adjustments for differences between the two properties, including number of bathrooms, rooms below grade, and extras like fireplaces and size of the garages.  The Board thus found that Mr. Josephson established comparability between his comparable property and the subject property.  The Board found that the comparable-sale property's adjusted value of $7,821,400 supported an assessed value of at least $7,033,500 for the subject property for fiscal year 2008, even considering the defective state of the stucco on the subject home.  The Board thus found that the appellant failed to prove that the fair cash value of his property was less than its assessed value for fiscal year 2008.  Accordingly, the Board issued a decision for the appellee for fiscal year 2008.
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).  Generally, real estate valuation experts and the Massachusetts courts rely upon three approaches to determine fair cash value of property: income capitalization, sales comparison, and cost reproduction. Correia v. New Bedford Redevelopment, 375 Mass. 360, 362 (1978).  "The 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 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 . . . 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)). 
"[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. Board of 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 2008-321, 400 (citing McCabe v. Chelsea, 265 Mass. 494, 496 (1929)), aff'd 73 Mass. App. Ct. 1107 (2008).  
When comparable sales are used, however, allowances must be made for various factors which would otherwise cause disparities in the comparable property's sale prices.  See Pembroke Industrial Park Co., Inc. v. Assessors of Pembroke, Mass. ATB Findings of Fact and Reports 1998-1072, 1082 (and the cases cited therein).  Functional utility is an allowance made to account for "an impairment of the functional capacity of a property or building according to current market tastes and standards."  The Appraisal Institute, the appraisal of real estate (13th ed. 2008) 262.  An assessment's failure to account for functional defects will warrant a reduction in assessed value to account for the costs to cure the defects.  See, e.g., Hughes v. Board of Assessors of the City of Quincy, Mass. ATB Findings of Fact and Reports 2005-420, 424-25, 428 (finding that assessment was excessive because the assessors failed to consider documented deficiencies in subject property). 
For fiscal years 2006 and 2007, the subject property's assessed values were within the range of adjusted sale prices in Mr. Josephson's comparable-sales analyses, which the Board found to be based upon comparable sale properties that were sufficiently similar to the subject property to be probative of the subject property's fair cash value.
However, Mr. Ozahowski and Mr. Cohen accurately documented that the subject home had several serious defects - particularly the HVAC system, exterior stucco, and interior flooring, stairs and millwork - that substantially reduced the subject property's fair market value.  The Board found and ruled that Mr. Ozahowski considered the state of completion of the subject home, including the many defects in workmanship and utilities, during the relevant assessment periods, and the reasonable costs to cure these defects.  By contrast, the Board found that the assessors were not aware of, nor did they take into account, the state of completion of the subject home or its defects in the subject assessments.  Therefore, the Board found and ruled that the appellant exposed flaws in the assessors' method of valuation and introduced affirmative evidence that functional utility adjustments of $200,000 and $100,000 were warranted for fiscal years 2006 and 2007, respectively.  Accordingly, the Board found and ruled that the appellant met his burden of proving overvaluation for fiscal years 2006 and 2007.
The Board was not persuaded by Mr. Ozahowski's functional utility adjustment for fiscal year 2005.  Mr. Ozahowski simply adopted an adjustment from a prior financing appraisal, prepared by a third-party appraiser who was not present to explain his adjustment.  By contrast, Mr. Josephson inspected the property and used a construction checklist as an accurate measure of the state of completion of the subject home.  The property record card documents that the subject assessment reflected the state of completion of the subject home during the relevant assessment period.  The Board thus found and ruled that the appellant failed to expose meaningful flaws or errors in the assessors' valuation.  Therefore, the Board found and ruled that the appellant failed to meet his burden of proving overvaluation for fiscal year 2005.
Because the subject home was essentially completed as of the relevant assessment date for fiscal year 2008, the Board did not consider functional utility adjustments.  The Board was most persuaded by Mr. Josephson's analysis of 140 Meadowbrook Road, located within a very close proximity of the subject property.  As previously explained, the Board found that Mr. Josephson established comparability between his comparable property and the subject property.  On the basis of this comparable sale, the Board found and ruled that the comparable property's adjusted sale price of $7,821,400 supported an assessed value of at least $7,033,500 for the subject property for fiscal year 2008, even considering the defective state of the stucco on the subject home.  The Board, therefore, found and ruled that the appellant failed to meet his burden of proving that the subject property was overvalued for fiscal year 2008.  
On the basis of the foregoing, the Board: (1) issued decisions for the appellant for fiscal years 2006 and 2007, reducing the subject assessments by $200,000 and $100,000 and granting abatements in the amounts of $2,049.70 and $1,056.78, respectively; and (2) issued decisions for the appellee for fiscal years 2005 and 2008.

APPELLATE TAX BOARD




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


A true copy, 


Attest: _______________________________
	                  Clerk of the Board                                                                                                                                                                                                                                                        

  The address of the subject property, before the fiscal years at issue, was 299 Meadowbrook Road.
  The notice of abatement determination states that the abatement application was deemed denied on May 2, 2007.  However, an abatement application is deemed denied "[w]henever a board of assessors, before whom an application in writing for the abatement of a tax is pending, fails to act upon said application . . . prior to the expiration of three months from the date of filing of such application."  G.L. c. 58A, § 6.  Three months from February 1, 2007 is May 1, 2007.  The appellant nonetheless filed his fiscal year 2007 petition timely, because he filed within three months of May 1, 2007.  See id.
  The appellant also owns a contiguous parcel of land which contains 0.02 acres.  The two parcels effectively operate as one parcel.  The second parcel is not part of this appeal.
  Pursuant to G.L. c. 59, § 2A, "buildings and other things erected on or affixed to land during the period beginning on January second and ending on June thirtieth of the fiscal year preceding that to which the tax relates shall be deemed part of such real property as of January first," if a city or town so elects.  It is not contested that Weston adopted § 2A and, therefore, the subject assessment may include construction progress as of June 30 for each of the fiscal years at issue in these appeals.
  Mr. Ozahowski also performed a cost analysis.  However, he testified that he relied almost entirely on his comparable sales analysis and used the cost approach primarily as a check on his comparable sales analysis.  
  See note 4, supra. 
  See note 5, supra.
  See note 5, supra.
  See note 4, supra.
 See note 5, supra.
  While Mr. Ozahowski's report notes that the stucco was "removed and re-applied," Mr. Cohen testified that the removal of the stucco would have been too invasive a project, so the appellants instead opted to apply a plastic stucco that had an ability to stretch.  At any rate, the Board found that the stucco needed to be remedied as of the relevant assessment date. 
  As noted previously in footnote 1, the prior address of the subject property, before the fiscal years at issue, was 299 Meadowbrook Road.
  The oldest home Mr. Josephson cited was at 103 Rolling Lane, which was 3 years old.

ATB 2010-445