Bong Lian & Huey Chan v. Board of Assessors of the Town of Lexington (October 23, 2012)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


BONG LIAN & HUEY CHAN	      v.		BOARD OF ASSESSORS OF
								THE TOWN OF LEXINGTON

Docket Nos. F306108, F312936 			Promulgated:
		 						October 23, 2012


	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 Lexington ("assessors" or "appellee") to abate taxes on certain real estate owned by and assessed to Bong H. Lian & Huey S. Chan ("appellants") under G.L. c. 59, §§ 11 and 38 for fiscal years 2010 and 2011 ("fiscal years at issue").  
	Commissioner Mulhern heard these appeals.  Chairman Hammond and Commissioners Scharaffa, Rose, and Chmielinski joined him in the decisions 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.

	Bong H. Lian, pro se, for the appellants.
	Robert Lent, assessor 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, 2009 and January 1, 2010, the relevant dates of assessment, respectively, for the fiscal years at issue, the appellants were the assessed owners of a parcel of real estate located at 5 Royal Circle in Lexington (the "subject property").  Royal Circle is a cul-de-sac located approximately two miles north of Lexington center.  The subject parcel contains approximately 0.70 acres of land and is improved with a two-story, wood-frame, Colonial-style home that was built in 1991.  The dwelling has a total of ten rooms, including four bedrooms, as well as three full bathrooms and one half bathroom, with a total finished living area of 3,855 square feet.  The below-grade finished basement has a recreation room, and also an additional bedroom and a full bathroom.  The home is heated by an oil-fired, forced hot-air system, and cooled by central air conditioning.  The exterior of the dwelling has wood clapboard and shingle siding, and the roof has asphalt shingles.  Additional features include a two-car under garage, an open porch, a deck and two fireplaces.  
	For fiscal years 2010 and 2011, the assessors valued the subject property at $1,126,000 and $1,151,000, respectively.  The assessors assessed taxes on the subject property at the rates of $13.86 per $1,000 for fiscal year 2010 and $14.40 per $1,000 for fiscal year 2011, resulting in tax assessments of $16,032.97 for fiscal year 2010 and $17,028.43 for fiscal year 2011.  On December 31, 2009 and on January 21, 2011, Lexington's Collector of Taxes sent out the town's actual real estate tax bills for fiscal years 2010 and 2011, respectively. In accordance with G.L. c. 59, § 57C, the appellants paid the taxes due without incurring interest.  
	On January 13, 2010 and February 9, 2011, in accordance with G.L. c. 59, § 59, the appellants timely filed Applications for Abatement with the assessors for fiscal years 2010 and 2011, respectively.  The assessors denied the appellants' abatement application for fiscal year 2010 on March 5, 2010 and denied the appellants' abatement application for fiscal year 2011 on April 8, 2011.  In accordance with G.L. c. 59, §§ 64 and 65, the appellants seasonably appealed these denials by filing Petitions Under Formal Procedure with the Board on May 20, 2010 for fiscal year 2010 and June 21, 2011 for fiscal year 2011.  On the basis of these facts, the Board found and ruled that it had jurisdiction to hear and decide these appeals.
	In support of their claim that the subject property was overvalued for the fiscal years at issue, the appellants offered the testimony of the owner, Bong H. Lian, and submitted several documents, including two appraisal reports prepared by different appraisers who were not present and therefore did not testify at the hearing, and a lengthy written statement, which included several analyses conducted by Mr. Lian.  
	For fiscal year 2010, the appellants submitted an appraisal report prepared by Barry S. Nicoll of the appraisal firm Archer Appraisal Services.  Mr. Nicoll's appraisal report cited sales of five comparable properties that are located between 0.75 and 2.09 miles from the subject property.  These properties varied in parcel size from approximately 0.31 to 0.69 acres, with dwellings that ranged from 2,742 to 4,000 square feet in gross living area. The properties sold during 2008 for between $901,000 and $1,155,000.  Mr. Nicoll made several adjustments to the sale prices of the purportedly comparable properties to account for differences between the properties and the subject property.  After adjustments, Mr. Nicoll arrived at a final estimate of value for the subject property of $1,000,000 as of February 13, 2009.          
	For fiscal year 2011, the appellants submitted an appraisal report prepared by Donald L. Frigoletto, Jr., a licensed real estate appraiser, which cited sales of three comparable properties that are located between 0.08 and 0.78 miles from the subject property.  The parcels ranged in size from 0.68 to 1.09 acres, with dwellings that ranged in size from 2,964 to 3,986 square feet.  The properties sold during calendar year 2009 with sale prices that ranged from $928,000 to $1,120,000.  After making adjustments for differences between the subject property and the purportedly comparable properties, Mr. Frigoletto arrived at a final estimate of value for the subject property of $975,000 as of January 1, 2010.    
	The appellants also submitted a document entitled "Appeal Argument Summary," which included several analyses prepared by Mr. Lian.  First, the appellants maintained that according to Zillow.com Home Value Index for Lexington, property values in Lexington declined during the fiscal years at issue, compared to the subject property's assessment which increased from fiscal year 2010 to fiscal year 2011.      
	In addition, the appellants' compared the subject property's assessed value against the assessed values of homes in a "relevant market segment" control group.  Based on the subject property's November 2003 sale price of $1,100,000, the appellants defined the control group as homes built not more than 20 years before the subject property that sold in calendar years 2003 and 2004 with sale prices that ranged from $1,000,000 to $1,200,000.  The appellants identified a total of eight homes meeting these criteria.  The appellants compared the properties' sale prices and their respective fiscal year 2011 assessments to show that, on average, the eight properties were assessed 8.5% less than their original sale prices in late 2003 and early 2004.  The appellants further noted that using the same analysis the subject property was assessed 4.6% higher than its original sale price.  
	Finally, the appellants presented a listing of the assessed values of all six properties located on Royal Circle for the fiscal years at issue, which indicated that with the exception of the subject property, most other Royal Circle properties' assessments decreased from fiscal year 2010 to 2011.  The appellants did not submit into evidence any property record cards for any of the other Royal Circle properties.
	 The assessors offered no evidence of value but instead rested on their assessment.
Based on all of the evidence, the Board found and ruled that the appellants failed to meet their burden of proving that the subject property was overvalued for the fiscal years at issue.  First, the Board considered only the undisputed factual descriptions contained in the appellants' appraisal reports, and excluded the appraisers' opinions of value as well as the adjustments upon which those opinions were based.  The Board rejected these elements of the appraisal reports because they lacked adequate foundation, were unsubstantiated hearsay, and the authors were not present at the hearing or available for cross-examination by the assessors or questioning by the hearing officer.  Accordingly, the Board gave no weight to the opinions expressed in the appraisal reports.
The Board further found that the appellants' self-prepared analyses of the subject property's percentage increase in assessed values for the fiscal years at issue in comparison to (1) all single-family homes in the same zip code and (2) a self-defined "relevant market segment," which were based on information gleaned from Zillow.com, contained uncorroborated data, were too general in scope, and lacked detailed information about the properties included in the analyses.  The Board therefore found that these analyses were of no probative value in determining the subject property's fair market values for the fiscal years at issue. 
Lastly, without the property record cards for the other Royal Circle properties, the Board was not able to verify the data contained in the appellants' comparable-assessment analysis or the comparability of the cited properties.  Moreover, the appellants' did not provide any adjustments to account for differences between the subject property and the purportedly comparable properties.  Absent such adjustments, no meaningful comparison of these properties with the subject property could be made.  Therefore, the Board found that the appellants' comparable-assessment evidence lacked persuasive value. 
On this basis, the Board found that the appellants did not meet their burden of demonstrating that the subject property was overvalued for the fiscal years at issue.  Accordingly, the Board issued decisions for the appellee in these appeals.    

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 the 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)). "[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, 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 (quoting Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983)).  
	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). The properties used in a comparable-sales analysis must be comparable to the subject property in order to be probative of fair cash value. See Sroka v. Assessors of Monson, Mass. ATB Findings of Fact and Reports 2009-835, 846 (citing Lattuca v. Robsham, 442 Mass. 205, 216 (2004)). The appellants bear the burden of "establishing the comparability of . . . properties [used for comparison] to the subject property." Fleet Bank of Mass. v. Assessors of Manchester, Mass. ATB Findings of Fact and Reports 1998-546, 554. Accord New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 470 (1981). "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." Id. 
In the present appeals, the appellants presented two independent appraisal reports which included comparable-sales analyses that incorporated adjustments to several purportedly comparable properties and an estimate of the subject property's fair cash value.  The Board found and ruled that while undisputed factual information contained in the appraisal reports could be considered, the appraisers' opinions of value, as well as adjustments to their purportedly comparable properties upon which the opinions of value were based, were not competent evidence.  The Board found and ruled that these portions of the appraisal reports were hearsay, and were offered without proper foundation and without providing the assessors an opportunity for cross-examination or the hearing officer an opportunity for questioning.  The Board therefore rejected the appraisers' adjustments and opinion of value and gave the appraisal reports no weight.  See, e.g. Papernik v. Assessors of Sharon, Mass. ATB Findings of Fact and Reports 2011-600, 615 (ruling that hearsay opinion evidence, which, although not objected to by the assessors, was entitled to no weight because it was offered without proper foundation, qualification, or underlying factual support and without providing the assessors with an opportunity for cross-examination.)
Additionally, evidence of the assessed values of comparable properties may provide probative evidence of fair cash value. G.L. c. 58A, § 12B.  Purportedly comparable properties used in a comparable-assessment analysis, like those used in a comparable-sales analysis, must be adjusted for differences with the subject property. See Graham, Mass. ATB Findings of Fact and Reports at 2007-402, aff'd, 73 Mass. App. Ct. 1107 (2008) ("The assessments in a comparable assessment analysis, like the sale prices in a comparable sales analysis, must also be adjusted to account for differences with the subject."); Lupacchino v. Assessors of Southborough, Mass. ATB Findings of Fact and Reports 2008-1253, 1269 ("[W]ithout appropriate adjustments . . . the assessed values of [comparable] properties [do] not provide reliable indicator[s] of the subject's fair cash value.").  
In the present appeals, the Board found that the appellants failed to offer the property record cards or any other supporting documentation to verify and appropriately augment the data contained in their comparable-assessment analysis.  Moreover, the appellants did not provide any adjustments to account for differences between the subject property and the purportedly comparable properties.  Absent such adjustments, no meaningful comparison of these properties with the subject property could be made.  Therefore, the Board found that the appellants' comparable-assessment evidence lacked persuasive value.
Finally, the Board found that the appellants' analyses premised on information obtained from the on-line resource Zillow.com contained uncorroborated data, were too general in scope, and lacked detailed information about the properties included in the analyses.  See Michael P. Miller & Sheila Noyes-Miller v. Assessors of Sturbridge, Mass. ATB Findings of Fact and Reports, 2012-643, 655 (affording no weight to the "opinion of the value" of the subject property contained in a Zillow.com print-out).  The Board therefore found that these analyses were of no probative value in determining the subject property's fair market values for the fiscal years at issue.  

Based on the foregoing, the Board found and ruled that the appellants failed to prove that the fair cash value of the subject property was less than its assessed values for the fiscal years at issue. Accordingly, the Board issued decisions for the appellee in these appeals.

                               APPELLATE TAX BOARD			


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

A true copy,
Attest: ___________________________
	   Clerk of the Board

 The taxes assessed include a Community Preservation Act surcharge.

ATB 2012-1110