Joan L. Schaub v. Board of Assessors of the City of Boston (September 17, 2009)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


JOAN L. SCHAUB		v.	   BOARD OF ASSESSORS OF 
				   THE CITY OF BOSTON

Docket Nos. F289785 (FY 07)			   
		  F298323	(FY 08)		   Promulgated:
			   				   September 17, 2009
 
							
	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 City of Boston ("assessors"), to abate taxes on certain real estate in the City of Boston, owned by and assessed to the appellant under G.L. c. 59, §§ 11 and 38, for fiscal years 2007 and 2008.
	Commissioner Egan heard these appeals. Chairman Hammond and Commissioners Scharaffa, Rose, and Mulhern joined her in the decisions for the appellant.
These findings of fact and report are made pursuant to the appellant's request under G.L. c. 58A, § 13 and 831 CMR 1.32.  

	Joan L. Schaub, pro se, for the appellant.
Laura Caltenco, 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, 2006 and January 1, 2007, Joan L. Schaub ("appellant") was the assessed owner of a parcel of real estate located at 35 Appleton Street, in the South End neighborhood of Boston. The parcel is improved with a single-family brick row house, which contains approximately 2,052 square feet of living area ("subject property").  The dwelling has a total of seven rooms, including two bedrooms as well as one bathroom.
For fiscal year 2007, the assessors valued the subject property at $880,800 and assessed to the appellant a tax thereon, at a rate of $10.99 per $1,000, in the amount of $8,154.94, which the appellant timely paid without incurring interest. On February 1, 2007, in accordance with G.L. c. 59, § 59, the appellant timely filed an abatement application with the assessors, which the assessors denied on March 8, 2007. The appellant seasonably filed an appeal with the Board, which was postmarked June 8, 2007.  
For fiscal year 2008, the assessors valued the property at $866,100 and assessed to the appellant a tax thereon, at a rate of $10.97 per $1,000, in the amount of $8,012.55, which the appellant timely paid without incurring interest. On February 1, 2008, in accordance with G.L. c. 59, § 59, the appellant timely filed an abatement application with the assessors, which was denied on April 28, 2008.  On July 28, 2008, the appellant seasonably filed an appeal with the Board.
On the basis of the foregoing facts, the Board found and ruled that it had jurisdiction to hear and decide these appeals.
The appellant's main argument is that the subject property is overvalued for the fiscal years at issue because the assessors failed to properly consider its poor condition.  In particular, the appellant pointed to the assessors' determination that the condition of the subject property was "average", as reflected on the subject property's property record cards for the fiscal years at issue. 
The appellant testified that, as of the relevant assessment dates, the subject property required at least $75,000 to $100,000 of repair work to cure major physical deficiencies.  She maintained that the subject property contained significant damage including: water damage to the walls, floors, and ceilings; disintegration of brick due to moisture ("spalling"); non-functioning fireplace, toilet, sink and heating system; and an uninhabitable top floor that had suffered severe water damage. The appellant provided credible evidence of the condition of the subject property through her testimony, a memorandum in which she described the deficiencies in detail, and photographs that highlighted the structural deficiencies, water damage, and extensive damage to the subject property's brick walls and structure.
The appellant also introduced an evaluation of the condition of the interior and exterior masonry walls and a valuation appraisal. The masonry evaluation, dated October 13, 2008, was performed by George Napoli of Granite State Brickface, Stucco, and Plastering Company. Mr. Napoli described the brick spalling at the subject property to be the most extreme that he had encountered in his 30 years of experience. Mr. Napoli placed the cost to repair the damage at between $75,000 and $100,000.
The appellant also submitted evidence of an independent appraisal of the subject property's value prepared by Mark S. Joseph, a certified residential appraiser. In his report, Mr. Joseph found evidence of structural deficiencies, spalling brick, exposed and missing bricks, water stained and damaged areas, damaged ceilings throughout, and damage to the chimney, among other things. He indicated in the report that the "subject property is below average in overall condition and quality of construction for the neighborhood, yet typical in style." 
Mr. Joseph valued the subject property by using a comparable-sales methodology. He relied on four recent sales of what he considered to be comparable, single-family brick row houses in the South End neighborhood of Boston, with sizes, ages, views, and number of rooms similar to those of the subject property.  The sales dated from November 22, 2005 to April 23, 2007, with two of the sales occurring in 2006.  Mr. Joseph noted that the 2005 sale was "older," but included it for "additional support."
Mr. Joseph adjusted the sale prices of these comparable properties, taking into account their superior overall condition, larger living areas and other differences compared to the subject property.  On the basis of these sales, Mr. Joseph determined that the value of the subject property was $745,000 as of January 1, 2006 and $750,000 as of January 1, 2007.
In support of their assessment for fiscal year 2007, the assessors offered the testimony of A. Craig Riegel, an assessor for the City of Boston. Mr. Riegel relied on his sales-comparison analysis of three single-family brick    houses in the South End neighborhood of Boston with sales dating from March 28, 2005 through November 30, 2005. These properties were all larger than the subject property, with living areas ranging from 2,117 square feet to 2,429 square feet. The properties were also in significantly better condition than the subject property: the property record cards for all three properties noted that substantial repairs had been undertaken and two of the properties were listed as being in "excellent" condition with "modern" and "luxury" bathrooms and kitchens.  
The assessors claimed that the sales prices of these allegedly comparable properties had been adjusted for "physical differences."  However, the adjustments were based, in the Mr. Riegel's words, on the "difference in assessed values and applying that differential to the respective sale price."  In other words, Mr. Riegel simply subtracted the assessed value of the subject property from the assessed value of each comparable property and subtracted the result from the sale price of the comparable property to arrive at an "adjusted" sale price for the comparable property.  Therefore, the adjustments were not based on the actual differences in condition and other factors between the subject property and the comparable properties.
Mr. Riegel also employed a similar comparable-sales analysis to value the subject property for fiscal year 2008. Mr. Riegel relied on the sales of three other single-family brick row houses in the South End which occurred between February 24, 2006 and December 15, 2006. Once again, the comparable properties were all in significantly better condition than the subject property, with renovations noted on their property record cards and "luxury" and "modern" and "semi-modern" kitchens and baths.  Mr. Riegel also used the same flawed assessment-based adjustments that he used for his fiscal year 2007 appraisal.  
On the basis of all the evidence presented, the Board found and ruled that the appellant met her burden of proving overvaluation.  The Board also agreed with the appellant that the properties presented by the assessors were not sufficiently comparable to the subject property due to the significant difference in condition.  Further, Mr. Riegel's adjustments were seriously flawed and failed to properly account for differences between his comparables and the subject property, particularly with respect to condition.  Basing his gross adjustment factor on the differences between the assessed values of the subject property and the comparable properties presumes that the assessors properly valued the subject property in the first instance, the very issue in dispute in these appeals. 
The Board found that the appellant presented sufficient evidence to establish that the assessors failed to properly account for the condition of the subject property.  The Board found credible and well-supported the appellant's testimony that the subject property required at least $75,000 to $100,000 of repair work to cure major physical deficiencies.  
On the basis of all the evidence of record, the Board found that the subject property was overvalued by $100,000 in each of the fiscal years at issue. Accordingly, the Board determined that the fair cash value of the subject property for fiscal year 2007 was $780,000 and granted an abatement in the amount of $1,099.00 and that the fair cash value of the subject property for fiscal year 2008 was $766,100 and granted an abatement in the amount of $1,097.00.

OPINION
	Assessors have a statutory obligation to assess real estate at its fair cash value as of the first day of January preceding the fiscal year at issue.  G.L. c. 59, §§ 11 and 38.  The definition of fair cash value is the price upon which a willing buyer and a willing seller would agree if both are fully informed and neither is under compulsion. Boston Gas Co. v. Assessors of Boston, 334 Mass. 549, 566 (1956).  The burden of proof is on the taxpayer to make out a right to an abatement as a matter of law. Schlaiker v. Assessors of Great Barrington, 365 Mass. 243, 245 (1974).  The assessment is presumed to be valid unless the taxpayer is able to sustain his or her burden of proving otherwise.  Id.  The taxpayer may sustain this burden by introducing affirmative 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).	
"[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.  "Adjustments for differences in the elements of comparison are made to the price of each comparable property . . . . The magnitude of the adjustment made for each element of comparison depends on how much that characteristic of the comparable property differs from the subject property."  Appraisal Institute, The Appraisal of Real Estate 322 (13th ed., 2008).
In the present appeals, the appellant submitted evidence of comparable sales and an independent evaluation of the condition of the property.  The Board found that the properties offered by the appellant were comparable to the subject property, given the similarity of the homes on these properties and their proximity to the subject property. Further, the analysis reflected adjustments based on the superior condition of the comparable properties compared to the subject property.  In contrast, the assessors failed to establish basic comparability between their comparable-sale properties and the subject property. For each fiscal year at issue, the assessors' sales were in significantly better condition than the subject property and failed to properly adjust for condition and other differences with the subject property. 
	A taxpayer may prove a right to an abatement by proving that the assessors erred in their valuation of the subject property.  General Electric Co. v. Assessors of Lynn, 393 Mass. at 600.  In the present appeals, the appellant provided sufficient evidence that the assessors erred by failing to account for the poor condition of the subject properties and their witness failed to properly adjust his comparable sales data for condition and consider other relevant factors. On the basis of all the evidence of record, the Board found that the subject property's value should be reduced by $100,000 for each of the fiscal years at issue.
	"The [B]oard [is] not required to believe the testimony of any particular witness but it [can] accept such portions of the evidence as appear to have the more convincing weight."  Assessors of Quincy v. Boston Consolidated Gas Co., 309 Mass. 60, 72 (1941).  "The credibility of witnesses, the weight of evidence and inferences to be drawn from the evidence are matters for the [B]oard."  Cummington School of the Arts, Inc. v. Assessors of Cummington, 373 Mass. 597, 605 (1977).  "The market value of the property c[an] not be prove[n] with mathematical certainty and must ultimately rest in the realm of opinion, estimate, and judgment . . . .  The [B]oard c[an] select the various elements of value as shown by the record and from them form . . . its own independent judgment."  Boston Consolidated Gas Co., 309 Mass. at 72 (citations omitted).  See also North American Philips Lighting Corp. v. Assessors of Lynn, 392 Mass. 296, 300 (1984); New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 473 (1981); Jordan Marsh Co. v. Assessors of Malden, 359 Mass. 106, 110 (1971).  The Board need not specify the exact manner in which it arrived at its valuation.  Jordan Marsh, 359 Mass. at 110.
On this basis, the Board found and ruled that the appellant met her burden of proving that the subject property was overvalued for fiscal years 2007 and 2008.  Accordingly, the Board decided these appeals for the appellant.


						APPELLATE TAX BOARD

		  		  By:				_____	____						 Thomas W. Hammond, Jr., Chairman




A true copy,


Attest:		______			
	      Clerk of the Board

 The tax is the net amount assessed after the residential exemption was applied.  See G.L. c. 59, § 5C.

 Where as here, the Board receives a petition after the three-month due date, the date of postmark is deemed to be the date of filing.  See G.L. c. 58A, § 7 and G. L. c. 59, §§ 64 and 65.  Accordingly, the filing date of the petition is deemed to be June 8, 2007, and the appellant's appeal is timely.

 See footnote 1.
 Mr. Joseph was not present at the hearing of these appeals and was therefore not available for cross-examination by the assessors.  Accordingly, the Board gave no weight to his opinion of value.

ATB 2009-763