Joseph Bolduc v. Board of Assessors of the Town of Norfolk (November 20, 2012)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD



JOSEPH BOLDUC			      v. 		   BOARD OF ASSESSORS OF 
   THE TOWN OF NORFOLK

Docket No. F310922			    		   Promulgated:
							   November 20, 2012


This is an appeal 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 Norfolk ("assessors" or "appellee") to abate taxes on certain real estate located in Norfolk owned by and assessed to Joseph Bolduc ("appellant") under G.L. c. 59, §§ 11 and 38 for fiscal year 2011.
	Commissioner Mulhern heard this appeal.  Chairman Hammond and Commissioners Scharaffa, Rose, and Chmielinski joined him in a decision for the appellant.
	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.  

Caitlin M. Cianflone, Esq. for the appellant.
John Neas, Chief Assessor, for the appellee. 


   FINDING OF FACT AND REPORT
	Based on the testimony and exhibits entered into evidence at the hearing of this appeal, the Appellate Tax Board ("Board") made the following findings of fact.
On January 1, 2010, the appellant was the assessed owner of a 1.45-acre parcel of land improved with a 2.5-story, Colonial-style, single-family dwelling ("subject dwelling") located at 3 Keeney Pond Road in Norfolk ("subject property").  The subject property is located in a prestigious neighborhood in Norfolk known as "The Preserve."  The Preserve is an enclave of high-end, custom-built homes situated among 100 wooded acres abutting conservation land.  The Preserve is located in a "Residence 2" zoning district, where single-family homes are among the permitted uses.      
The subject dwelling contains 13 rooms, including four bedrooms, four full bathrooms, two half bathrooms, and a finished attic, with a total living area of 5,855 square feet.  It has a wood-frame with a poured concrete foundation, brick exterior, and asphalt-shingle roof cover.  
Custom built in 2005, the subject dwelling is a stately home with distinctive architectural features throughout, such as arched doorways, columns, wainscoting, tray and coffered ceilings, intricate woodwork, and crown moldings.  The interior finishes are top-of-the-line throughout, including granite countertops, tile backsplash, and marble-tiled floors.  Additional amenities include a wood deck, a sunroom, fireplaces, and an attached three-car garage.  
	For fiscal year 2011, the assessors valued the subject property at $1,394,300, and assessed a tax thereon, at the rate  of $15.10 per thousand, in the total amount of $21,640.25.   Pursuant to G.L. c. 59, § 57C, the appellant paid the tax due in four timely quarterly payments.  On January 5, 2011, the appellant filed a timely Application for Abatement under G.L.  c. 59, § 59 with the assessors, who denied the application on March 9, 2011.  On April 19, 2011, the appellant timely filed an appeal with the Board.  On the basis of these facts, the Board found and ruled that it had jurisdiction to hear and decide this appeal.
			The Appellant's Valuation Evidence
	 The appellant's sole contention was that the subject property was overvalued.  The appellant, who testified at the hearing of this appeal, stated that he purchased the subject property in an arm's-length transaction on December 30, 2009 for a purchase price of $1,150,000.  He explained that, prior to his purchase, the subject property had been on the market for approximately 148 days at an asking price of $1,475,000.  
	The appellant also offered the testimony and appraisal report of Richard B. Gorden, a certified real estate appraiser whom the Board qualified as an expert in real estate valuation.  Mr. Gorden opined that the highest and best use of the subject property was its continued use as a single-family residence.  Accordingly, he used the sales-comparison approach to value the subject property.  
Mr. Gorden's sales-comparison analysis featured three properties, all of which were single-family residences in Norfolk that sold between May of 2009 and January of 2010.  His first sales-comparison property, 8 Trailside Way ("8 Trailside Way"), was a 43,996 square-foot lot improved with a Colonial-style, single-family residence containing a total living area of 4,789 square feet.  It had eleven rooms, including five bedrooms, as well as three full bathrooms and one half bathroom.  Like the subject property, 8 Trailside Way also featured a three-car attached garage and a deck.   
	Mr. Gorden considered 8 Trailside Way, which sold for $1,125,000 on August 19, 2009, to be in similar condition to the subject property, and after making minor adjustments to account for differences from the subject property in such items as number of fireplaces and living area, Mr. Gorden arrived at an adjusted sale price of $1,145,970 for 8 Trailside Way.   
	Mr. Gorden's second sales-comparison property, 6 Keeney Pond Road ("6 Keeney Pond Road"), was a 67,994 square-foot lot improved with a Colonial-style, single-family residence containing a total living area of 5,440 square feet.  It had eleven rooms, including five bedrooms, as well as four full bathrooms and two half bathrooms.  It also featured an attached three-car garage, two fireplaces, a patio, a porch, and a deck.  
	Located in the same neighborhood as the subject property, 6 Keeney Pond Road sold for $1,500,000 on January 22, 2010.  Because 6 Keeney Pond Road was slightly newer than the subject property, Mr. Gorden considered it to be in better condition than the subject property.  After making adjustments to account for this factor and other differences from the subject property, Mr. Gorden arrived at an adjusted sale price of $1,273,675 for 6 Keeney Pond Road.   
	Mr.  Gorden's final sales-comparison property was 48 Berkshire Street ("48 Berkshire Street") in Norfolk, which was a 47,946 square-foot lot improved with a Colonial-style, single-family residence containing a total living area of 4,909 square feet.  It had 13 rooms, including five bedrooms, as well as four and one-half bathrooms.  It also featured an attached three-car garage, a patio, a porch, and a fireplace.  
	Mr. Gorden considered 48 Berkshire Street, which sold on May 26, 2009 for $950,000, to be in similar condition to the subject property.  After making minor adjustments to account for differences from the subject property in quality of construction, living area, and number of fireplaces, Mr. Gorden arrived at an adjusted sale price of $992,570 for 48 Berkshire Street.  
Based on his sales-comparison analysis, which yielded adjusted sales prices ranging from $992,570 to $1,273,675, Mr. Gorden's final opinion of fair-cash value for the subject property for fiscal year 2011 was $1,150,000.  
	    The Assessors' Valuation Evidence 
The assessors offered several exhibits into the record, including the relevant jurisdictional documents, plot plans and photographs of the subject property, and a valuation analysis prepared by Chief Assessor John Neas.  Mr. Neas, who is a certified real estate appraiser, also testified at the hearing of this appeal.
Like Mr. Gorden, Mr. Neas concluded that the highest and best use of the subject property was its continued use as a single-family residence, and he, too, selected the sales-comparison approach to value the subject property.  Mr. Neas selected five total properties for comparison, two of which - 8 Trailside Way and 6 Keeney Pond Road - were also included in Mr. Gorden's analysis.  
Mr. Neas considered 6 Keeney Pond Road to be superior to the subject property primarily because it was newer.  He therefore made downward adjustments to 6 Keeney Pond Road's $1,500,000 sale price to account for this factor and other minor differences, arriving at an adjusted sale price of $1,446,500 for 6 Keeney Pond Road.  
Mr. Neas considered 8 Trailside Way to be inferior to the subject property because it was smaller in size, had fewer fireplaces, and contained other minor differences. Most importantly, Mr. Neas noted that the sale of 8 Trailside Way was a "short sale," and thus did not represent an arm's-length transaction.  After making adjustments to account for 8 Trailside Way's differences from the subject property, including differences in conditions of sale, Mr. Neas arrived at an adjusted sale price of $1,352,850 for 8 Trailside Way.  
Mr. Neas testified that because the subject property represented the very top end of the real estate market in Norfolk, there were a limited number of comparable sales in Norfolk during the relevant time period.  Mr. Neas testified that the neighboring town of Medfield had a greater abundance of high-end, custom homes like the subject property, and thus, he selected three properties from Medfield for his sales-comparison analysis.  
The first of those properties was 143 Green Street in Medfield ("143 Green Street"), which was a 1.63-acre parcel of land improved with a single-family, Colonial-style dwelling containing 4,926 square feet of living area.  It had eleven rooms, including five bedrooms, as well as four full bathrooms and one half bathroom, and also featured a detached three-car garage, three fireplaces, and an in-ground pool. It sold in August of 2009 for $1,255,000.  After making adjustments to account for this property's differences from the subject property, including differences in the amount of living area, room count, market conditions, the pool, and other items, Mr. Neas arrived at an adjusted sales price of $1,245,250 for 143 Green Street.  
Mr. Neas' next sales-comparison property was One Inness Circle in Medfield ("One Inness Circle"), which was a 40,039 square foot lot improved with a Colonial-style, single-family dwelling containing 4,311 square feet of living area.  It had nine rooms, including four bedrooms, as well as four bathrooms, and also featured an attached three-car garage, central-air conditioning, a porch and deck, and three fireplaces.  It sold in June of 2009 for $1,300,000. After making adjustments to account for this property's differences from the subject property, including differences in the amount of living area, room count, market conditions, and other items, Mr. Neas arrived at an adjusted sale price of $1,350,900 for One Inness Circle.  
Mr. Neas' final sales-comparison property was 19 Quarry Road in Medfield ("19 Quarry Road"), which was a 41,319 square-foot parcel of land improved with a Colonial-style, single-family dwelling containing 4,292 square feet of living area.  It had nine rooms, including four bedrooms, as well as three full bathrooms and one half bathroom.  It sold in April of 2010 for $1,320,000.  After making adjustments to account for this property's differences from the subject property, including differences in age, amount of living area, and number of rooms and fireplaces, Mr. Neas arrived at an adjusted sale price of $1,346,300 for 19 Quarry Road.  
Mr. Neas also testified concerning the results of his investigation of the subject property's sales history.  His investigation included a review of the sales deeds and related documents concerning the two sales of the subject property, one from the builder to a Mr. Jody Bhagat in July of 2008, and one from Mr. Bhagat to the appellant in December of 2009, as well as his interview with the broker involved in the transactions.   Mr. Neas testified that the subject property was originally sold in July of 2008 to Mr. Bhagat, who was relocating from California to Massachusetts for employment purposes, for $1,650,000.  Mr. Bhagat placed the subject property back on the market just one year later because he transferred back to California.  On the basis of his investigation, Mr. Neas believed that Mr. Bhagat's employer was willing to absorb some of the loss on the subject property's sale, which, in addition to his need to relocate back to California, provided Mr. Bhagat with motivation to accept less than fair market value for the subject property.   Thus, because of the conditions surrounding the subject property's 2009 sale, Mr. Neas did not believe that the actual sale price of $1,150,000 represented its fair cash value.  Rather, on the basis of his sales-comparison analysis, Mr. Neas opined that the fair cash value of the subject property for fiscal year 2011 was $1,400,000.  
		The Board's Valuation Findings
On the basis of all of the evidence, the Board agreed with both parties that the highest and best use of the subject property was its continued use as a single-family residence.  The Board further found that the appellant met his burden of proving that the subject property's assessed value was higher than its fair cash value for fiscal year 2011. 
The subject property's actual sale on December 30, 2009 was timely and would ordinarily be given considerable weight.  However, the Board found Mr. Neas' testimony regarding the circumstances surrounding the sale to be credible and supported by the evidence.  Further, although there was evidence of a declining market, the Board found that a decline of almost thirty percent - from $1,650,000 to $1,150,000 - in a little over a year's time was not supported by the evidence of record.  Based on the credible evidence presented, the Board found that the subject property's previous owner was willing to sell the subject property for less than fair market value, and thus, it ruled that the subject property's actual sale in 2009 was entitled to only limited weight.  
In contrast, the Board found that the sale of 6 Keeney Pond Road provided highly probative evidence of the subject property's fair cash value.  That property, which both parties used in their sales-comparison analyses, was located in the subject property's immediate neighborhood and was sold just three weeks after the relevant valuation date for $1,500,000.  The evidence indicated that 6 Keeney Pond Road was newer than, and thus somewhat superior to, the subject property.  After making adjustments to account for age and other differences, Mr. Gorden's adjusted sale price for 6 Keeney Pond Road was $1,273,675, while Mr. Neas' adjusted sale price for that property was $1,446,500.  
Although 8 Trailside Way was also located in the same neighborhood as the subject property and was sold proximate to the relevant date of assessment, the Board placed no weight on that sale, as the evidence indicated that it was not an arm's-length transaction.  Moreover, 8 Trailside Way was older and smaller in size than the subject property and also inferior in condition.  
Similarly, the Board placed no weight on the sales of the Medfield properties selected by Mr. Neas.  Mr. Neas offered no evidence to establish that Medfield and Norfolk were comparable communities.  In fact, the evidence indicated that the real estate market in Medfield was different than in Norfolk, in that Medfield had a greater abundance of high-end, custom homes.  The Board therefore found that the Medfield sales did not provide probative evidence of the subject property's fair cash value, and accordingly, it placed no weight on those sales.  
After taking into consideration all of the evidence, and placing significant weight on the sale of 6 Keeney Pond Road along with limited weight on the subject property's actual sale in 2009, the Board concluded that the fair cash value of the subject property for fiscal year 2011 was $1,300,000.  Accordingly, the Board issued a decision for the appellant in this appeal and granted an abatement of tax in the amount of $1,466.65. 
  OPINION
	Assessors must assess real estate at its fair cash value.  G.L. c. 59, §§ 2A and 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 appellant has the burden of proving that the 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)).  "[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, a taxpayer "'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)).
	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).  Regardless of which method is employed to determine fair cash value, the Board must determine the highest price which a hypothetical willing buyer would pay to a hypothetical willing seller in an assumed free and open market.  Irving Saunders Trust v. Assessors of Boston, 26 Mass. App. Ct. 838, 843 (1989).
"[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. 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 2007-321, 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 properties' sale prices.  See Pembroke Industrial Park Co., Inc. v. Assessors of Pembroke, Mass. ATB Findings of Fact and Reports 1998-1072, 1082.  
Further, actual sales of the subject property generally provide "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 Corporation v. Assessors of Boston, 383 Mass. 456, 469 (1981), (quoting First National Stores, Inc. v. Assessors of Somerville, 358 Mass. 554, 560 (1971)).  However, "the evidentiary value of such sales in less than arm's-length transactions is diminished."  New Boston Garden Corp., 383 Mass. at 469 (quoting Jordan Marsh Co. v. Assessors of Malden, 359 Mass. 106, 108 (1971)).  Thus, the circumstances surrounding actual sales of the subject property must be scrutinized.  See Pepsi-Cola Bottling Co., 397 Mass. at 449.  
In the present appeal, in addition to considering the comparable sales data presented by both parties, the Board considered the subject property's actual sale history.  The subject property was first sold in 2008 for $1,650,000, to Mr. Bhagat, who was relocating from California to Massachusetts for employment purposes.  Approximately one year later, Mr. Bhagat was transferred back to California, and the subject property was sold to the appellant for $1,150,000 on December 30, 2009.  Based on the evidence concerning Mr. Bhagat's transfer back to California shortly after his purchase of the subject property, the Board found that he was willing to sell the subject property for less than fair market value, and thus, it ruled that the subject property's actual sale was entitled to only limited weight.  
Instead, the Board found and ruled that the timely sale of 6 Keeney Pond Road, a comparable property which was located in the subject property's immediate neighborhood, provided the most probative evidence of the subject property's fair cash value.  Both Mr. Gorden and Mr. Neas selected 6 Keeney Pond Road for their comparable-sales analyses, and, because it was newer, both considered it to be superior to the subject property.  After making appropriate adjustments to account for this and other differences from the subject property, Mr. Gorden and Mr. Neas determined adjusted sale prices of $1,273,675 and $1,446,500, respectively, for that property.  Based on this evidence, and placing limited weight on the actual sale of the subject property in 2009, the Board found and ruled that the fair cash value of the subject property for fiscal year 2011 was $1,300,000.  
On the basis of the foregoing, the Board found and ruled that the subject property was overvalued for fiscal year 2011.  Accordingly, the Board issued a decision for the appellant, granting a total tax abatement of $1,466.65, which included an abatement of the Community Preservation Act surcharge.

				 
  THE APPELLATE TAX BOARD


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



A true copy,


Attest:		______	_______
	     Clerk of the Board

  This amount includes a Community Preservation Act surcharge of $586.32.  
 The deeds for both sales of the subject property were entered into evidence.  
 This amount included an abatement of the Community Preservation Act surcharge in the amount of $42.72.  

ATB 2012-1164