Smitty LLC, Cheryl A. Norton, Trustee of Tails Realty Trust v. Board of Assessors of the Town of Rockland (September 27, 2016)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


SMITTY LLC, CHERYL A.           v.		 BOARD OF ASSESSORS OF
NORTON, TRUSTEE OF TAILS 			 THE TOWN OF ROCKLAND
REALTY TRUST

Docket No. F325158					 Promulgated:
								 September 27, 2016

											
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 appellee, Board of Assessors of the Town of Rockland ("assessors" or "appellee"), to abate taxes on real estate in Rockland owned by Cheryl A. Norton, trustee of Tails Realty Trust ("appellant" and "Trust," respectively), under G.L. c. 59, §§ 11 and 38, for fiscal year 2014. 
Commissioner Chmielinski ("Presiding Commissioner") heard the appeal under G.L. c. 58A, § 1A and 831 CMR 1.20 and issued a single-member decision for the appellee. 
These findings of fact and report are promulgated pursuant to the appellant's request under G.L. c. 58A, § 13 and 831 CMR 1.32. 
	Kevin M. Norton, pro se, for the appellant. 
	Debra Krupczak, 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 Presiding Commissioner made the following findings of fact.
The property at issue is an improved 4,659 square-foot parcel of real estate located at 209-215 Union Street in Rockland ("subject property"), which the appellant purchased on October 1, 2013 for $489,000. The subject building is a two-story, mixed-use commercial and residential structure that has  total living and retail area of 4,413 square feet, configured with retail space on the first floor and four one-bedroom residential apartments on the second floor. The building is of wood-frame construction and there are three parking spaces located at the property's rear. 
For the fiscal year at issue, the assessors valued the subject property at $439,800 and assessed a tax thereon, at the rate of $18.34 per thousand, in the total amount of $8,065.93.  In accordance with G.L. c. 59, § 57C, the tax was timely paid without incurring interest. On February 3, 2014, in accordance with G.L. c. 59, § 59, the appellant timely filed an application for abatement with the assessors, which was deemed denied on May 3, 2014. On July 25, 2014, in accordance with G.L. c. 59, §§ 64 and 65, the appellant seasonably filed a Petition Under Formal Procedure with the Board. On the basis of these facts, the Presiding Commissioner found and ruled that the Board had jurisdiction to hear and decide this appeal.
The appellant contended that the subject property was overvalued for the fiscal year at issue. In support of this contention, the appellant introduced the subject property's property record cards for fiscal years 2013 and 2014, which reflected a substantial increase in the property's assessed value from fiscal year 2013 to fiscal year 2014. The appellant also offered the property record cards for four purportedly comparable properties in Rockland. The property record cards for these properties indicated assessed values that remained stable between fiscal years 2013 and 2014. Based on this apparent disparity, the appellant argued that the subject property's assessed value for fiscal year 2014 should have remained the same as its assessed value for fiscal year 2013. The appellant offered no further evidence of the subject property's fair cash value for the fiscal year at issue. 
	Debra Krupczak, an assessor for the Town of Rockland, testified on behalf of the assessors and offered into evidence the requisite jurisdictional documents, photographs of the subject property, the subject property's property record card for fiscal year 2014, and a summary income valuation report for the subject property illustrating the valuation method utilized by the assessors for the fiscal year at issue. 
Ms. Krupczak credibly testified that the subject property's valuation had increased from fiscal year 2013 to fiscal year 2014 to account for an increase in the property's first floor potential retail rental income that accurately reflected current market rent for similar mixed-use properties on Union Street in Rockland. Otherwise, the subject property's valuation remained stable. The appellant did not contest the market retail rental data proffered by the assessors in support of their valuation methodology. 
In addition, the appellant purchased the subject property nine months after the relevant assessment date for nearly $50,000 more than its assessed value in a sale the parties agree constituted an arm's-length transaction. Finally, the evidence presented indicated that during these nine months there had been no appreciable change in the real estate market. 
Based on the evidence presented, the Presiding Commissioner found and ruled that the appellant failed to meet her burden of demonstrating that the subject property's assessed value for the fiscal year at issue exceeded its fair cash value. The Presiding Commissioner found that the evidence offered by the appellant, which consisted only of property record cards showing that the subject property's assessed value had increased between fiscal year 2013 and 2014 while other purportedly comparable properties' had not, did not, by itself, furnish persuasive evidence of overvaluation. Moreover, the assessors offered credible uncontroverted testimony to establish that the subject property's valuation had increased for the fiscal year 2014 to appropriately account for the property's current first floor retail market rent. 
Finally, the Presiding Commissioner found and ruled that the appellant's purchase of the subject property for almost $50,000 more than its assessed value provided support for the assessors' income-based assessed value, particularly given that the sale was an arm's-length transaction in a stable real estate market. 
Based on the foregoing, the Presiding Commissioner issued a decision for the appellee in this appeal.

OPINION
	The assessors are required to assess real estate at its fair cash value as of the first day of January preceding the start of the fiscal year. G.L. c. 59, §§ 2A and 38. Fair cash value, which is synonymous with fair market value, is defined as the price at which a willing seller and a willing buyer in a free and open market will agree to if both parties are fully informed and under no compulsion. Boston Gas 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)). 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. v. Assessors of Lynn, 393 Mass. 591, 600 (1984) (quoting Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983)). 
	The Presiding Commissioner found and ruled that the appellant failed to meet her burden of demonstrating that the subject property's fair cash value was lower than its assessed value for the fiscal year at issue. The appellant's evidence consisted only of property record cards showing that the assessed values of four purportedly comparable properties had not risen between fiscal years 2013 and 2014, while the subject property's had. This evidence, standing alone, did not constitute persuasive evidence of overvaluation. Further, the assessors provided credible evidence to support the validity of the increase in the subject property's assessed value for the fiscal year at issue, incorporating uncontested market retail data to estimate the current market rent of the subject property's retail space.
Finally, the appellant purchased the subject property for almost $50,000 more than its assessed value in an arm's-length transaction nine months after the assessment date for the fiscal year at issue, during which time there had been no appreciable change in the real estate market. Thus, the Presiding Commissioner found and ruled that the sale provided support for the subject property's income-based assessed value as of the relevant assessment date.   For all of the cited reasons, the Presiding Commissioner issued a decision for the appellee in this appeal.


                            THE APPELLATE TAX BOARD
 



                        By: ____________________________________
   Richard G. Chmielinski, Commissioner

A true copy,


Attest:  ___________________________
	    Clerk of the Board

 The appellant purchased the property at issue from Smitty LLC on October 1, 2013.
 Cheryl A. Norton authorized Kevin M. Norton, who was familiar with the property at issue and served as Managing Agent of the Trust, to prosecute this appeal before the Appellate Tax Board ("Board"). 
 Smitty LLC was the assessed owner of the subject property on January 1, 2013, the relevant assessment date for fiscal year 2014. 

ATB 2016-411