Thomas P. Schulz & Anne E. Schulz v. Board of Assessors of the Town of Great Barrington (October 2, 2014)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD


THOMAS P. SCHULZ &     		 v. 	   BOARD OF ASSESSORS OF THE ANNE E. SCHULZ					   TOWN OF GREAT BARRINGTON


Docket No. F318436	 	             Promulgated:
							   October 2, 2014

 
	This is an appeal filed under the formal procedure pursuant to G.L. c. 58A, § 7 and G.L. c. 59, §§ 64 and 65 from the refusal of the Board of Assessors of the Town of Great Barrington ("assessors" or "appellee") to abate taxes on certain real estate located in the Town of Great Barrington owned by and assessed to Thomas P. Schulz and Anne E. Schulz ("appellants") under G.L. c. 59, §§ 11 and 38 for fiscal year 2013 ("fiscal year at issue").
	Commissioner Chmielinski heard this appeal. Chairman Hammond and Commissioners Scharaffa, Rose, and Good joined him in the decision for the appellee.
 These findings of fact and report are made pursuant to a request by the appellants under G.L. c. 58A, § 13 and 831 CMR 1.32.

Thomas P. Schulz, pro se, for the appellants.

Christopher J. Lamarre, principal assessor, for the appellee.  
FINDINGS OF FACT AND REPORT
On the basis of testimony and exhibits offered into evidence at the hearing of this appeal, the Appellate Tax Board ("Board") made the following findings of fact.
On January 1, 2012, the relevant assessment date for the fiscal year at issue, the appellants were the assessed owners of an improved parcel of real estate located at 19 East Mountain Road in Great Barrington ("subject property").  For assessment purposes, the subject property is identified on map 37 as lot 45-12. The assessors valued the subject property at $946,600 and assessed a tax in the amount of $12,438.32, which the appellants paid without incurring interest. On October 24, 2012, the appellants timely filed an abatement application with the assessors, and on November 15, 2012, the assessors granted an abatement of $2,498.02, having reduced the subject property's valuation to $756,492. On December 11, 2012, the appellants seasonably filed a Petition Under Formal Procedure with the Board seeking a further reduction in value. On the basis of these facts, the Board found and ruled that it had jurisdiction over this appeal.  
The subject property consists of a 3.97 acre parcel of real estate improved with a contemporary cape-style, single-family dwelling. The dwelling contains seven rooms including four bedrooms, four full bathrooms and one half bathroom, as well as a covered porch and a two-car garage. The home was built in 2005, has a finished living area of 3,481 square feet, and is located in an upscale, wooded neighborhood that is accessed via a private road.
The appellants argued that the subject property's assessed value was excessive and did not adequately reflect market conditions. Thomas P. Schulz, one of the property owners, testified on behalf of the appellants and submitted several exhibits, including property record cards, MLS listings, and photographs. To establish the fair cash value of the subject property, Mr. Schulz presented four sales of purportedly comparable properties. Relevant details of these sales are reproduced below:
	Address	Sale Price	Sale Date	Living Area (sq.ft.)	Land Area (acres)	
Subject	19 East Mountain Rd	-	-	3,481	3.97	
Sale# 1	7&9 East Mountain Rd	$624,712	12/23/2011	2,814	5.78	
Sale# 2	313 Division St	$665,000	05/31/2011	3,480	2.16	
Sale# 3	41 Seekonk Rd	$585,000	06/06/2011	3,166	7.62	
Sale# 4	4 Buttondown Ln	$565,500	04/22/2011	3,024	4.49	
The appellants relied primarily on sale one, which they asserted was essentially identical to the subject property and was described by the appellants as "a perfect comparable." The remaining three sales played a secondary, supporting role in the appellants' analysis. Sale one shares several similarities with the subject property. It is located on the same street, has a similar layout, was built by the same builder immediately before he commenced building the dwelling on the subject property, and was sold approximately a week before the relevant assessment date. The appellants testified that the differences between the subject property and sale one were minor and offset each other. The Board, however, rejected the appellants' contention of "a perfect comparable" and found that the differences between sale one and the subject property were more substantial than the appellants claimed. In particular, the subject property had approximately twenty-four percent more finished living area than sale one, a difference the Board found was significant and required an appropriate adjustment. The appellants, however, failed to make an adjustment for this factor in their analysis.  Rather, the appellants refused to recognize that any adjustment at all was warranted. 
The appellants offered sales two through four as secondary support for sale one. While sales two through four were similar to the subject property in certain respects, they also possessed significant differences, which the appellants conceded. For sales two and three, the appellants introduced adjustments contained in a bank appraisal report conducted not for the subject property, but for sale one. The Board afforded no weight to the appraisal's adjustments because they constituted unsubstantiated hearsay as the author of the appraisal was not present at the hearing and available for cross-examination or for questioning by the Board. More importantly, the appellants' application of the appraisal's adjustments to the subject property suffered from a major flaw in that the adjustments contained in the appraisal accounted only for differences between sale one and sales two and three, not for differences between sale one and the subject property. Given that the Board found greater dissimilarity than that asserted by the appellants between sale one and the subject property, the appellants' use of the appraisal's adjustments to account for differences with sale one was flawed and without probative value. Finally, the appellants failed to account in any manner for differences between the subject property and sale four. In sum, for all of the above stated reasons, the Board gave virtually no weight to the appellants' comparable-sales analysis.  
The appellants also cited three factors that they claimed negatively affected the value of the subject property. First, most of the land on the property is not usable as it is located on a steep grade on the side of East Mountain. Second, the subject property is subject to a right of way for the benefit of the Commonwealth. Lastly, the subject property can only be accessed via a driveway that the appellants testified is steep and often unusable in the winter. The appellants failed, however, to demonstrate to what degree, if any, these factors diminished the value of the subject property. Further, the assessors offered testimony and photographs which, contrary to the appellants' assertions, indicated that the subject property's driveway is not excessively steep, and that any problems associated with its winter use likely resulted from insufficient maintenance.  Moreover, the appellants failed to demonstrate how and to what degree any of the three factors, even if they were to be credited by the Board, negatively impacted the fair market value of the subject property. 
On the basis of the foregoing, the Board found and ruled that the evidence presented by the appellants did not provide a reliable basis to establish the fair cash value of the subject property. The Board therefore found and ruled that the appellants failed to meet their burden of proving that the subject property had been overvalued for the fiscal year at issue.  Accordingly, the Board issued a decision for the appellee in this appeal.

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 appellants have the burden of proving that property has a lower value than that assessed. "'The burden of proof is upon the petitioner to make out [his] 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 the Board, taxpayers "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. "Sales of comparable realty in the same geographic area and within a reasonable time of the assessment date contain credible data and information for determining the value of the property at issue." Giard v. Assessors of Colrain, Mass. ATB Findings of Fact and Reports 2009-115, 123 (citing McCabe v. Chelsea, 265 Mass. 494, 496 (1929)). Properties are "comparable" to the subject property when they share "fundamental similarities" with the subject property, including location, size, quality, and date of sale.  Lattuca v. Robsham, 442 Mass. 205, 216 (2004). When comparable sales are considered, adjustments must be made for various differences among the properties which would otherwise cause disparities in the properties' sale prices. See Pembroke Industrial Park Co., Inc. v. Assessors of Pembroke, Mass. ATB Findings of Fact and Reports 1998-1072, 1082. 
In the present appeal, the appellants sought to establish that the subject property was overvalued primarily through submission of a comparable-sales analysis. This analysis, however, was flawed in several respects. Assuming that the appellants' chosen sales were comparable to the subject property, the appellants' analysis failed to account for differences between the subject property and their chosen sales comparables. More specifically, sale one, which the appellants described as essentially identical to the subject property, contained finished living area that was significantly smaller than the subject property, for which no adjustment was made. Adjustments offered for sales two and three were not only unsubstantiated hearsay, but were based on comparison to sale one and not to the subject property. The appellants' use of adjustments to sale one, and not to the subject property, was thus flawed.  Lastly, the appellants offered no adjustments for sale four. Consequently, the Board found that the appellants' comparable-sales evidence did not provide a reliable basis to establish the fair cash value of the subject property for the fiscal year at issue. 
The Board also found unpersuasive the appellants' claim that certain physical factors negatively affected the value of the subject property. Not only did the appellants fail to demonstrate to what degree, if any, these factors diminished the fair market value of the subject property, but evidence presented by the assessors contradicted the appellants' factual assertion that the subject property's driveway was excessively steep, thereby impacting winter access.  

For the reasons detailed above, the Board found and ruled that the appellants failed to meet their burden of proving that the fair cash value of the subject property was less than its assessed value for the fiscal year at issue. Accordingly, the Board issued a decision for the appellee in this appeal.  


					THE APPELLATE TAX BOARD

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


A true copy,

Attest: ____________________________
		  Clerk of the Board

 The appellants previously filed an appeal with the Board for fiscal year 2011. In a decision for the appellants, the Board reduced the subject property's assessed value from $946,600 to $781,500 and granted the corresponding abatement. The appellants submitted a request for findings of fact and report, which they subsequently withdrew.
 Property record cards for fiscal years prior to the fiscal year at issue indicated that the finished living area of the property located at 7&9 East Mountain Road was 3,305 square feet. As part of an inspection of the property during February 2012, the assessors determined the property's finished living area was 2,814 square feet.
 The right of way appears to be "dormant" and would only be used in the event of a forest fire.

ATB 2014-745