Kimberly & Michael Cook v. Board of Assessors of the Town of Wayland (July 15, 2010)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



KIMBERLY & MICHAEL COOK		v.      BOARD OF ASSESSORS OF 
                             		   THE TOWN OF WAYLAND

Docket Nos. F296785, F299228		   Promulgated:
							   July 15, 2010
							   
	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 Wayland ("assessors" or "appellee") to abate taxes on certain real estate located in Wayland owned by and assessed to the appellants under G.L. c. 59, §§ 11 and 38, for fiscal years 2008 and 2009.
	Commissioner Mulhern heard the appeals.  Chairman Hammond and Commissioners Scharaffa, Egan and Rose joined him in the decision for the appellee in docket number F296785 and the decision for the appellants in docket number F299228.  
	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.

Ellen M. Hutchinson, Esq. for the appellants.

	Mark J. Lanza, Esq. for the appellee.

FINDINGS OF FACT AND REPORT
	Based on the testimony and exhibits offered into evidence in these appeals, the Appellate Tax Board ("Board") made the following findings of fact.
On January 1, 2007 and January 1, 2008, the appellants were the assessed owners of 73,310 square feet of land located at 12 Ellie Lane, improved with a two-story, Colonial-style dwelling ("subject property").  The subject dwelling has a total of ten rooms, including five bedrooms and also five full bathrooms and one half bathroom, with a total finished living area of 5,774 square feet.  The exterior is clapboard and it has a slate gambrel roof.  The home is heated by an oil-fired, forced hot-air system, and there is also a central air-conditioning system.  Additional features of the home include vaulted ceilings, one fireplace, a 980-square-foot attached garage, a finished lower level, a brick patio, and also an unfinished attic.  The appellants purchased the subject property on May 28, 2006 for $2,387,000.
The subject property is situated in a two-lot subdivision located on Ellie Lane, a private way connected to Lincoln Road in the northern section of Wayland, near the Wayland/Lexington town line.  The subdivision plan was approved by the Town of Wayland on November 19, 2004 ("Subdivision Approval") and was filed with the Town Clerk at that time.  Pursuant to the Subdivision Approval, a number of restrictive covenants apply to the Ellie Lane Subdivision, including the "duty of each owner in the subdivision to share, jointly and severally, the costs for maintenance and snow plowing of Ellie Lane and the maintenance and repair of drainage systems located beneath the Ellie Land properties."  The covenants also impose on the owners of the Ellie Lane properties a "general obligation to keep the road in a 'good safe and passable condition.'"  Further, the deed for the sale of the subject property states that the appellants are granted the "right and easement to pass and repass over and use Ellie Lane, a private way, as shown on said [subdivision] plan."
For fiscal years 2008 and 2009, the assessors valued the subject property at $2,255,900 and $2,345,800, respectively.  The assessors assessed taxes at the rate of $14.98 per $1,000 for fiscal year 2008 and $16.37 per $1,000 for fiscal year 2009, resulting in tax assessments of $33,793.38 for fiscal year 2008 and $38,400.75 for fiscal year 2009.  In accordance with G.L. c. 59, § 57C, the appellants timely paid each fiscal year's taxes without incurring interest.  
On January 24, 2008 and February 2, 2009, in accordance with G.L. c. 59, § 59, the appellants timely filed an Application for Abatement with the assessors for fiscal years 2008 and 2009, respectively.  On March 24, 2008, the assessors granted the appellants a partial abatement for fiscal year 2008 and lowered the subject property's assessed value by $7,500 to $2,248,400.  The appellants' fiscal year 2009 abatement application was deemed denied on May 2, 2009.  The appellants seasonably filed their appeals with the Board on June 18, 2008 for fiscal year 2008 and on March 24, 2009 for fiscal year 2009.  On the basis of these facts, the Board found and ruled that it had jurisdiction to hear and decide these appeals.
The appellants presented their case primarily through the testimony of appellant Kimberly Cook.  The appellants also offered into evidence numerous exhibits, including the subject property's original and amended property record cards for fiscal years 2008 and 2009, a copy of the deed of sale for the subject property, a sales-comparison analysis for each of the fiscal years at issue, and also a comparable-assessment analysis for both fiscal years 2008 and 2009.  
The appellants challenged both the fiscal year 2008 and fiscal year 2009 assessments on several grounds.  First, the appellants argued that they were not aware of the subject property's restrictive covenants contained in the Subdivision Approval and therefore their purchase of the subject property was not an arms-length transaction.  They further argued that such restrictions have a negative impact on the subject property's fair cash value, which was not taken into account by the assessors.  
The appellants also argued that the assessors made various mistakes and errors in their assessment methodology.  First, the appellants contended that the assessors overstated the subject property's land area.  The appellants argued that, according to the subject property's deed, they own only 62,597 square feet of land and not the 73,310 square feet listed on the subject property's property record card.  They maintained that the assessors' error resulted in an overstatement of land area by 9,713 square feet and an overvaluation of the subject property.  The appellants also argued that the assessors' assessment methodology was flawed as evidenced by the conflicting data listed on the various property record cards produced for fiscal years 2008 and 2009.  For example, a property record card dated 6/04/2007 listed the subject property as having an asphalt roof, no patio or fireplaces, and a finished half story with a living area of 893 square feet.  The property was assigned a grade of "A".  The property record card dated 1/29/2008, listed the subject property as having a slate roof, a 400 square foot patio, two fireplaces, and a 536 square-foot finished attic.  This property record card had various handwritten notes suggesting that the subject property had a gas heating system, central vacuum system and only one fireplace.  Neither of these property record cards reported cathedral or vaulted ceilings.
During calendar year 2008 there were four additional property record cards issued with differences including, differing roof covers, number of fireplaces, finished attic area, and cathedral ceilings.  During this time, the subject property's overall grade varied from "X-" to "A+".
The appellants also offered into evidence comparable-sales analyses for the fiscal years at issue.  For fiscal year 2008, the appellants cited five Colonial-style properties that ranged in lot size from 55,322 square feet to 130,680 square feet, with finished living areas that ranged from 5,144 square feet to 6,461 square feet.  These properties sold between March 6, 2006 and August 2, 2006, with sale prices that ranged from $1,775,000 to $2,025,000.  After adjustments for location, neighborhood, lot size, living area, home features and condition, privacy, encumbrances and restrictions, the appellants calculated adjusted sale prices that ranged from $1,501,250 to $1,671,041.95.  
For fiscal year 2009, the appellants also cited five Colonial-style properties that ranged in lot size from 61,113 square feet to 87,619 square feet, with finished living areas that ranged from 4,650 square feet to 6,500 square feet.  These properties sold between June 1, 2007 and June 10, 2008, with sale prices that ranged from $1,472,000 to $1,999,000.  After making adjustments for factors such as location, neighborhood, lot size, living area, home features and condition, privacy, encumbrances and restrictions, the appellants calculated adjusted sale prices that ranged from $1,450,935 to $1,577,345.
Finally, the appellants offered a comparable-assessment analysis of ten Colonial-style properties located in Wayland with finished living areas that ranged in size from 5,144 square feet to 6,157 square feet.  As with their comparable-sales analyses, the appellants made adjustments for factors such as location, neighborhood, lot size, living area, home features and condition, privacy, encumbrances and restrictions.  After making the necessary adjustments, the appellants' adjusted assessed values ranged from $1,218,091 to $1,629,602 for fiscal year 2008, and ranged from $1,415,948 to $1,591,981 for fiscal year 2009. 
In support of their assessment, the assessors primarily relied on the testimony of Susan Ruffo, town assessor.  Ms. Ruffo explained that although the appellants' primary site is only 62,597 square feet, as evidenced by the deed of sale, the deed also states that the appellants own the land to the "easterly center line of Ellie Lane."  The assessors determined that this portion of land was 9,713 square feet.  In total, Ms. Ruffo testified, the appellants own 72,310 square feet of land.  
Ms. Ruffo also explained that the inconsistencies apparent on some of the subject property's property record cards were attributable to the various vendors' conducting exterior views of the home and also to the fact that the assessors were denied entry to the dwelling on several occasions and were not granted access until February 19, 2008.  However, she testified that the final assessments for both fiscal years 2008 and 2009 reflected all changes and corrections which the assessors made after inspecting the subject property.  Finally, Ms. Ruffo testified that the Wayland real estate market for properties such as the subject property peaked in the last quarter of 2006. 
The town counsel also offered into evidence a copy of the subject property deed which refers to the subdivision plan and questioned Ms. Cook about whether she had reviewed the referenced subdivision plan prior to the purchase of the subject property.  Ms. Cook, however, refused to give a direct response.  Town counsel also presented a copy of the Subdivision Approval and asked Ms. Cook if she had reviewed the subdivision covenants prior to the purchase of the subject property.  Again, Ms. Cook refused to give a direct response.
Finally, the assessors offered into evidence the Superior Court's Decision regarding an emergency joint motion in the case of Michael R. Cook and Kimberly Cook, Trustees of the 12 Ellie Lane Realty Trust v. Town of Wayland Planning Board, et al., MICV2008-01696-B (December 31, 2008).  In its decision, the Court found and ruled that the appellants had at least "constructive knowledge" of the existing covenants and restrictions placed on 12 Ellie Lane at the time of purchase.  Further, with respect to the driveway maintenance covenant, the court found that the appellants had "some actual notice of their snow removal obligations before they purchased their property."  
On the basis of all of the evidence, the Board found that, for fiscal year 2008, the appellants failed to demonstrate that the fair cash value of the subject property was less than its assessed value, as abated.  First, the Board found that the appellants' assertion that the assessors overstated the land area on the property record card was erroneous.  As evidenced by the deed, the appellants own not only the primary lot of 62,597 square feet but also own an additional portion of land, namely "to the easterly centerline of Ellie Lane," pursuant to the Subdivision Approval.  The Board further found that the assessors' calculation of 9,713 square feet attributable to this additional area was credible.  Also, the Board found that the appellants' failed to prove that they had no knowledge of the existing covenants and liabilities imposed on the subject property at the time of sale and, therefore, no additional reduction in value was warranted.   
Moreover, after reviewing the appellants' comparable-sales analysis and the appellants' purchase of the subject property in May 2006 for $2,387,000, the Board found that the appellants' evidence failed to prove that the subject property's fiscal year 2008 assessment, as abated, of $2,248,400, exceeded its fair cash value.  Accordingly, the Board issued a decision for the appellee in Docket No. F296785.  
However, the Board found that the appellants' fiscal year 2009 assessment was excessive.  Ms. Ruffo conceded that the real estate market in Wayland for properties similar to the subject property peaked in 2006 and began to decline in 2007.  However, the fiscal year 2009 assessment on the subject property exceeded the fiscal year 2008 assessment by nearly $100,000.  The Board found, based on the assessors' concession that market conditions for properties similarly to the subject property were declining between the relevant assessment dates for the fiscal years at issue, as well the comparable sales evidence of record, that the subject property was overvalued for fiscal year 2009.  
On the basis of the comparable sales evidence of record and the evidence of a declining market for properties similar to the subject property, the Board found that the fair cash value of the subject property for fiscal year 2009 was $2,100,000.  Accordingly, the Board issued a decision for the appellants in Docket No. F299228 and granted an abatement of $3,253.33.  

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 taxpayer 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 taxpayer meets its 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, the 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)).  "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 appellant bears 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. Accord New Boston Garden Corp. v. Assessors of Boston, 383 Mass. at 470. "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.	
For fiscal year 2008, the appellants argued that the assessors made numerous errors on the property record card, including the total stated land area.  However, based on a review of the deed of the subject property and also the assessors' testimony, the Board found that the total land area of 72,310 square feet reported on the property record card and the characteristics contained on the more recent property record card upon which the assessors relied in setting the adjustments were accurate.  The appellants also argued that at the time of purchase they were unaware of the covenants and easements imposed on the subject property and that, therefore, the sale was not an arm's-length transaction and the sale price did not accurately reflect the subject property's fair cash value.  The Board found, however, that Ms. Cook's testimony concerning this issue was evasive and not credible.  In addition, the deed for the subject property deed, which lists Ellie Lane as a private way and references the subdivision plan and the Superior Court decision further undercuts the appellants' argument that they were not aware of the covenants on 12 Ellie Lane.  Accordingly, the Board found that the sale price of $2,387,000 was the best evidence of valuation for fiscal year 2008.  Moreover, the Board found that the appellants' fiscal year 2008 comparable-sales analysis supported the subject property's assessment for fiscal year 2008.  Accordingly, the Board issued a decision for the appellee in Docket No. F296785.  
However, for fiscal year 2009, the Board found that the evidence of record supported a finding that the subject property was overvalued.  First, Ms. Ruffo testified that the real estate market in Wayland for properties similar to the subject property peaked in late 2006 and began to decline in 2007.  Further, the Board found that the appellants' comparable sales data supported Ms. Ruffo's testimony concerning a declining market and the appellants' claim that the subject property was overvalued for fiscal year 2009.  Relying on the evidence of record concerning a declining market for properties similar to the subject property and comparable sales data with appropriate adjustments, the Board found that the fair cash value of the subject property for fiscal year 2009 was $2,100,000.     
"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. v. Assessors of Boston, 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 these principles in reaching its determination that the assessors overvalued the subject property in the amount of $195,800 for fiscal year 2009.   Accordingly, the Board issued a decision for the appellants in Docket No. F299228, and granted an abatement in the amount of $3,253.33.
				  THE APPELLATE TAX BOARD

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


A true copy,

Attest:  _________________________________
		      Clerk of the Board

 The assessors issued a notice of abatement denial on May 6, 2009, stating that the appellants' abatement application was deemed denied on May 5, 2009.  However, pursuant to G.L. c. 58A, § 6 and G.L. c. 59, § 64, an application for abatement is deemed denied three months from its filing if the assessors have taken no action on the application.  In the present appeal, the appellants' fiscal year 2009 abatement application was filed on February 2, 2009 and, therefore, was deemed denied on May 2, 2009.  
 The facts of this appeal establish that the appellants filed their fiscal year 2009 Petition with the Board prior to the deemed denial date of their abatement application. Appellants' premature filing does not, however, deprive the Board of jurisdiction over the 2009 appeal.  See Becton, Dickinson and Company v. State Tax Commission, 374 Mass. 230, 234 (1978) (holding that prematurity in filing the application was not a matter fatal to jurisdiction).
 The Board's original Decision abated only real estate tax and did not include an abatement of Community Preservation Act surcharge ("CPA").  Accordingly, on its own motion, the Board issued a Revised Decision which included a CPA abatement and tax abatement based on the Board's determination of fair cash value.

	
	ATB 2010-676