John A. & Carole F. Whittemore v. Board of Assessors of the Town of Belmont (September 13, 2010)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



JOHN A. & CAROLE F. 	  v.		BOARD OF ASSESSORS OF 
WHITTEMORE				     THE TOWN OF BELMONT

Docket No. F303055				Promulgated:
							September 13, 2010

								
	This is an appeal originally filed under the informal procedure pursuant to G.L. c. 58A, § 7A and G.L. c. 59, §§ 64 and 65 from the refusal of the appellee to abate taxes on real estate located in the Town of Belmont, assessed to the appellants under G.L. c. 59, §§ 11 and 38, for fiscal year 2009.
	Chairman Hammond heard the appeal.  Commissioners Scharaffa, Egan, Rose and Mulhern joined him in a decision for the appellants. 
	These findings of fact and report are made pursuant to a request by the appellee under G.L. c. 58A, § 13 and 831 CMR 1.32.
		
	John A. Whittemore, pro se, for the appellants.
	Paul R. Mordarski, Esq. for the appellee.
 FINDINGS OF FACT AND REPORT
On the basis of the exhibits and testimony offered into evidence during the hearing of these appeals, the Board made the following findings of fact.  
On January 1, 2008, the appellants were the assessed owners of a parcel of real estate located at 64 Summit Road in the Town of Belmont ("subject property").  For fiscal year 2009, the Board of Assessors of the Town of Belmont ("assessors") valued the subject property at $1,311,000, and assessed a tax thereon, at the rate of $11.89 per thousand, in the total amount of $15,587.79.  The appellants timely paid the tax due without incurring interest.  On January 30, 2009, the appellants timely filed an abatement application with the assessors, which the assessors denied on April 28, 2009.  On June 12, 2009, the appellants seasonably filed their appeal with the Appellate Tax Board ("Board").  On the basis of these facts, the Board found and ruled that it had jurisdiction over the instant appeal.
The subject property consists of a single-family condominium unit containing 2,789 square feet of gross living area.  It is comprised of seven rooms, including three bedrooms, as well as four full bathrooms and one half bathroom.  The subject property also includes: a full partially-finished basement (not included within the 2,789 square feet of gross living area), which contains two additional rooms and one of the full bathrooms; an attached two-car garage; an open-framed porch; and a wood deck.  Amenities include granite countertops and back splash and solid natural wood cabinets in the kitchen and central air conditioning throughout the unit.  The property record card for the subject property on file with the appellee lists the subject property as in "AA/Superlative" condition.  The subject property is located within a 15-acre, 59-unit condominium community owned by the Woodlands at Belmont Hill, LLC ("the Woodlands").  The land upon which the condominium complex is situated was acquired by the Woodlands on March 8, 2005, and it was subsequently developed into a condominium complex.  The appellants purchased the subject property from the Woodlands on August 31, 2006 for $1,390,000.
The appellants presented their case-in-chief through the testimony of appellant John Whittemore.  He also submitted a spreadsheet created with information obtained by the real estate publication, Banker and Tradesman.  Mr. Whittemore contended that when the appellants purchased the subject property in mid-2006, the real estate market was at its height, but that its fair market value has since declined by at least 30% of its original sale value.  Mr. Whittemore's spreadsheet included two sales of purportedly comparable condominium units within the Woodlands, which sold during fiscal year 2009 for less than their original sale price.  The first comparable, 4 Candleberry Lane, contained 3,025 square feet of living area and was comprised of 7 rooms, including three bedrooms, as well as three full bathrooms and one half bathroom.  This comparable property, which had previously sold for $1,395,000 in May, 2007, sold for $1,050,000 on December 19, 2008, reflecting a decrease of almost 25% from its original sale price in 2007.  The second comparable, 39 Summit Road, contained 3,014 square feet of living area.  In his abatement request to the assessors, Mr. Whittemore referred to this comparable property as "the exact same unit as ours."  This comparable property, which had previously sold for $1,389,492 on January 17, 2007, sold for $990,000 on April 15, 2009, reflecting a decrease of about 28% from its original sale price in 2007.  On the basis of his research, Mr. Whittemore contended that the fair cash value of the subject property was between $950,000 to $1,000,000 for the fiscal year at issue.
The assessors presented their defense of the assessment through the testimony of Richard Simmons, Assessor for Belmont.  Mr. Simmons also prepared an appraisal report, which included a comparable-sales analysis using the sale of the subject and two sales of purportedly comparable properties from the Woodlands.  Mr. Simmons first contended that the sale of the subject on August 31, 2006 for $1,390,000 was persuasive evidence that its fair cash value was at least equal to its assessed value of $1,311,000 for fiscal year 2009.  Mr. Simmons next presented his two purportedly comparable sales from within the Woodlands.  The first, 8 Bayberry Lane, contained 2,789 square feet of living area and was comprised of seven rooms, including three bedrooms, as well as three full bathrooms and one half bathroom.  This comparable property sold for $1,355,000 on October 17, 2007.  Mr. Simmons provided upward adjustments totaling $31,700 for the subject property's extra bathroom and extra fixtures, which yielded an adjusted sales price of $1,386,700.  The second comparable, 8 Candleberry Lane, contained 3,014 square feet of living area and was comprised of seven rooms, including three bedrooms, as well as four full bathrooms and one half bathroom.  It also included two fireplaces.  This comparable property sold for $1,375,000 on June 1, 2007.  Mr. Simmons provided a downward adjustment of $4,000 for the comparable property's additional fireplace, which yielded an adjusted sales price of $1,371,100.  
On the basis of all of the evidence submitted, the Board found that the evidence submitted was sufficient to prove that each of the condominium units within the Woodlands was substantially similar to the subject property and provided probative evidence of its fair market value.  The Board further found that the appellants' two comparable sales affirmatively demonstrated a significant downward turn in the market for substantially similar condominium units within the Woodlands after the appellants' purchase of the subject in mid-2006.  The appellee's comparables were sold during 2007, before the relevant assessment date, and therefore did not fully reflect the demonstrated decrease in the real estate market as of the relevant assessment date.  However, the Board further found that, because the appellant's two sales occurred close to one year (4 Candleberry Lane) and over fifteen months (39 Summit Road) after the relevant assessment date, these comparable sales overstated the decrease in the market that existed on the relevant assessment date.
On the basis of all of the evidence of record, the Board found and ruled that the appellants met their burden of proving a fair market value for the subject property which was less than its fiscal year 2009 assessment.  On the basis of its findings detailed above, the Board found that the fair cash value for the subject property for fiscal year 2009 was $1,200,000.  Accordingly, the Board issued a decision for the appellants granting abatement of $1,319.79 for the 2009 fiscal year.  

OPINION
Assessors are required 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 fair cash value of property is defined as the price upon which a willing buyer and a willing seller would agree if both are fully informed and under no compulsion.  Boston Gas. Co. v. Assessors of Boston, 334 Mass. 549, 566 (1956).
The burden of proof is upon the taxpayers to make out a right to an abatement.  Schlaiker v. Assessors of Great Barrington, 365 Mass. 243, 245 (1974).  The assessment is presumed to be valid unless the taxpayers meet their burden of proving otherwise.  Id.  A right to an abatement can be proven by either introducing 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).
Generally, real estate valuation experts, Massachusetts courts, and this Board rely upon three approaches to determine the fair cash value of property: income capitalization, sales comparison, and cost reproduction.  Correia v. New Bedford Redevelopment Authority, 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).  
Actual sales of the subject "‛are very strong evidence of fair market value, for they represent what a buyer has been willing to pay to a seller for [the] particular property [under appeal].'"  New Boston Garden Corp. v. Board of Assessors of Boston, 383 Mass. 456, 469 (1981) (quoting First Nat'l Stores, Inc. v. Assessors of Somerville, 358 Mass. 554, 560 (1971)).  Moreover, whether a particular sale of the subject has occurred during an appropriate time period is a question of fact for the board to determine.  See Ramacorti v. Boston Redevelopment Authority, 341 Mass. 377, 380 (1960), Brush Hill Development, Inc. v. Commonwealth, 338 Mass. 359, 367 (1959).  In the instant appeal, the Board found that, by citing sales of substantially similar condominium units within the Woodlands, the appellants adequately demonstrated that the real estate market for substantially similar condominium units had declined between their purchase of the subject property in 2006 and the relevant assessment date for fiscal year 2009.  Therefore, under the facts of this appeal, the appellants' purchase price for the subject property was not the best evidence of its fair market value for fiscal year 2009.
"Evidence of the sale prices of 'reasonably comparable property' is the next best evidence to the sale of the property in question."  Lattuca v. Robsham, 442 Mass. 205, 216 (2004).  Required are "fundamental similarities" between the subject property and the comparison properties.  Id. at 216.  The appellants bear the burden of "establishing the comparability of . . . properties [used for comparison] to the subject propert[ies]."  Fleet Bank of Mass. v. Assessors of Manchester, Mass. ATB Findings of Fact and Reports 1998-546, 554.  "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."  New Boston Garden Corp., 383 Mass. at 470.  One of the key adjustments required for comparability is for time; an appropriate time adjustment will consider market trends and thus render a comparable property more equivalent to the subject on the relevant assessment date.  See, e.g., Franco v. Board of Assessors of Holyoke, Mass. ATB Findings of Fact and Reports 2008-885, 891 (disregarding appellant's evidence of a comparable property "sold 13 months after the valuation date for fiscal year 2007, [where] appellant offered no evidence of the intervening market conditions and made no adjustment for time").
In the instant appeal, the Board found that the appellants' comparable sales supported Mr. Whittemore's testimony concerning a declining market between mid-2006 and the relevant assessment date for substantially similar condominium units, thus ultimately supporting the appellants' claim that the subject property was overvalued for fiscal year 2009.  However, as detailed in the Findings section above, the Board also found that the appellants' comparable sales occurred on dates that were well beyond the relevant assessment date; therefore, although they indicated a downward trend in the market, the sales prices did not accurately reflect market value at the time of the relevant assessment date.  Relying on the evidence of the declining real estate market for substantially similar condominium units within the Woodlands, but adjusting the appellants' data to better reflect the market conditions on the relevant assessment date, the Board ultimately found and ruled that the fair cash value of the subject property for fiscal year 2009 was $1,200,000.    
"In reaching its opinion of fair cash value in this appeal, the Board was not required to believe the testimony of any particular witness or to adopt any particular method of valuation . . .  .  Rather, the Board could accept those portions of the evidence that the Board determined had more convincing weight."  Foxboro Associates v. Board of Assessors of Foxborough, 385 Mass. 679, 683 (1982); New Boston Garden Corp., 383 Mass. at 473; Assessors of Lynnfield v. New England Oyster House, Inc., 362 Mass. 696, 701-02 (1972).  The Board need not specify the exact manner in which it arrived at its valuation.  Jordan Marsh v. Assessors of Malden, 359 Mass. 196, 110 (1971).  The fair cash value of property cannot be proven with "mathematical certainty and must ultimately rest in the realm of opinion, estimate and judgment."  Assessors of Quincy v. Boston Consol. Gas Co., 309 Mass. 60, 72 (1941).  "The credibility of witnesses, the weight of evidence, the inferences to be drawn from the evidence are matters for the Board."  Cummington School of the Arts, Inc. v. Assessors of Cummington, 373 Mass. 597, 605 (1977).
The Board applied the above principles in reaching its determination that the assessors overvalued the subject property in the amount of $111,000 for fiscal year 2009.   Accordingly, the Board issued a decision for the appellants granting abatement of $1,319.79. 

				   THE APPELLATE TAX BOARD

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


A true copy,


Attest:  ______________________________
	        Clerk of the Board

 Within thirty days of service of the Statement Under Informal Procedure, the assessors elected to transfer the proceedings to the formal procedure.  See G.L. c. 58A, § 7A.

ATB 2010-813