Peter K. Frei v. Board of Assessors of the Town of Holland (October 24, 2014)

 COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


PETER K. FREI				v.		BOARD OF ASSESSORS OF
								THE TOWN OF HOLLAND  											
Docket No. F317721					Promulgated:
								October 24, 2014


This is an appeal filed under the formal procedure pursuant to G.L. c. 59, §§ 64 and 65 from the refusal of the appellee, the Board of Assessors of the Town of Holland ("assessors" or "appellee"), to abate taxes on certain real estate located in the Town of Holland owned by and assessed to Peter K. Frei ("appellant"), under G.L. c. 59, §§ 11 and 38, for fiscal year 2012 ("fiscal year at issue").
Commissioner Rose ("Presiding Commissioner") heard this appeal and, in accordance with G.L. c. 58A, § 1A and 831 CMR 1.20, issued a single-member decision for the appellee.  
These findings of fact and report are made pursuant to a request by the appellant under G.L. c. 58A, § 13 and 831 CMR 1.32.

Peter K. Frei, pro se, for the appellant.
JoAnne J. Higgins, assistant assessor for the appellee.

FINDINGS OF FACT AND REPORT
	On the basis of the exhibits and testimony submitted during the hearing of this appeal, the Presiding Commissioner made the following findings of fact.
	On January 1, 2011, the appellant was the assessed owner of an improved 1.44-acre parcel of real estate located at 101 May Brook Road ("subject property") located in Holland, a small residential community in Hampden County.  The subject property is located on a private peninsula, which overlooks the Hamilton Reservoir.  The subject property is improved with three structures: a single-family home with 1,096 square feet of living area ("primary dwelling"), a 1.5-story structure built above a one-car garage, with 1,156 square feet of living area ("secondary dwelling"), and a 144-square-foot outbuilding primarily used as a workshop. 
For the fiscal year at issue, the assessors valued the subject property at $366,400 and assessed a tax thereon, at a rate of $15.18 per thousand, in the amount of $5,561.95.  In accordance with G.L. c. 59, § 57C, the appellant paid the tax without incurring interest.  In accordance with G.L. c. 59, § 64, on January 26, 2012, the appellant timely filed an Application for Abatement with the assessors, which the assessors denied on April 26, 2012. On July 19, 2012, the appellant timely filed a Petition Under Formal Procedure with the Appellate Tax Board ("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 primary dwelling has only three rooms: a kitchen, a bedroom, and a bathroom.  The dwelling's amenities include hardwood flooring, a fifty-square-foot wooden deck, one fireplace, and a forced-hot-air, gas-powered heating system.  The exterior of the dwelling has cedar clapboard siding and an asphalt gable roof.  Although the primary dwelling was originally constructed in the 1930s, the dwelling was recently renovated and is rated on its property record card as being in "average" condition. 
The secondary dwelling is a small, 1.5-story structure, built above a one-car garage.  The garage is set into a hill, and its exterior is sided with an expansive stone wall.  Above the garage is a 604-square-foot room with large windows that opens to an outdoor concrete patio and grilling area that provides an unobstructed view of the reservoir.  At the rear of the main room is a staircase that ascends to a 470-square-foot attic, which features dormer windows facing the reservoir.  Attached to the attic is an 82-square-foot octagonal turret room, with windows on five sides.  
The interior of the secondary dwelling was under construction as of the valuation date for the fiscal year at issue and the dwelling had neither electricity nor plumbing at that time. The assessors reflected this construction in progress by assessing 50 percent of the finished value. Like the primary dwelling, the exterior of the secondary dwelling has cedar clapboard siding and an asphalt gable roof.  The dwelling is rated on its property record card as being in "good" condition. The secondary dwelling does not have a kitchen; the assessors accordingly assigned a functional obsolescence factor of 10 to the property. The appellant had applied for a permit from the town to zone the secondary dwelling as a standalone residence, which was denied by the Town of Holland on February 27, 2013. 
	The appellant claimed that the assessed value of the secondary dwelling was excessive. In support of his contention, the appellant offered into evidence the property record card for an adjacent property, 109 Sandy Beach Road, a 0.14-acre parcel improved only by a garage, along with photographs thereof, in an attempt to show that the subject property's secondary dwelling was overvalued. The appellant also argued that the secondary dwelling fell within the definition of an "accessory building," under Holland's zoning bylaws and, as such, the dwelling should be assessed at a reduced value. As an accessory building, the appellant argued the secondary dwelling was "super-adequate" for that purpose and the market value a buyer would ultimately be willing to pay would not reflect the level of the appellant's investment. Under § 2.02 of Holland's Zoning Bylaws, an accessory building is defined as "an enclosed structure containing no living accommodations, including but not limited to, a garage, wood shed, tool shed, noncommercial greenhouse, boat house or similar structure, and the use of which is subordinate and incidental to that of a principal building." The assessors maintained that the classification of the property did not affect the ultimate amount of the assessment of the property, which the appellant did not introduce evidence to contradict. 
      Finally, the appellant argued that the assessors, by separately recording the primary and secondary dwellings on different property record cards, which he alleged was in violation of their own field listing instructions, deprived the appellant of his right to equal protection under the Fourteenth Amendment to the United States Constitution.  Arguing that the secondary dwelling was subordinate to the primary dwelling, the appellant asserted that it should have been recorded as an auxiliary building on the same property record card as the primary dwelling, and that the assessors' failure to do so was a denial of equal protection.  
	The Presiding Commissioner found that the appellant failed to meet his burden of proving that the subject property was overvalued.  The Presiding Commissioner found the single purportedly comparable assessment offered to be insufficient to undermine the assessors' determination of the fair cash value of the subject property. Furthermore, the appellant made no attempt to make adjustments to the comparable to account for fundamental differences between the properties, such as lot size, living area, condition, and views.  Aside from his claims that the secondary dwelling was "overbuilt" and "unique," the appellant failed to quantify or otherwise provide support for the effect of the purported "super-adequacies" on the fair market value of the property.  
The Presiding Commissioner found that the appellant's secondary dwelling, which has 1,156 of living space, was properly assessed as a second dwelling, subject to the assessor's reduction for functional obsolescence, as opposed to an accessory building, such as a shed. Additionally, the Presiding Commissioner found that the appellant did not offer sufficient evidence to rebut the assessor's assertion that the classification of the structure as a dwelling or an accessory building did not affect the valuation of the property. Finally, the Presiding Commissioner found that the appellant's equal protection claim was similarly unsubstantiated, as the appellant did not prove intentional and arbitrary discrimination on the part of the assessors.  
Accordingly, the Presiding Commissioner issued a single-member decision for the appellee.
    
OPINION
	Assessors are required to assess real estate at its fair cash value.  G.L. c. 59, § 38.  Fair cash value means fair market value, which is defined as the price upon which a willing buyer and a willing seller would agree if both were fully informed and under no compulsion.  Boston Gas Co. v. Assessors of Boston, 334 Mass. 549, 566 (1956).
The taxpayer has the burden of proving that the subject property has a lower value than that assessed.  Schlaiker v. Assessors of Great Barrington, 365 Mass. 243, 245 (1974).  The Board is entitled to presume that the valuation made by the assessors is valid unless the taxpayer proves to the contrary.  General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 598 (1984).  In appeals before the 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.'"  Id. at 600, quoting Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983).
"[E]vidence of assessments imposed on other property claimed to be comparable in nature to the subject property is largely a matter within the discretion of the Board."  Assessors of Lynnfield v. New England Oyster House, Inc., 362 Mass. 696, 703 (1972).  The properties used in the analysis must be comparable to the subject property in order to be probative of fair cash value.  Id. Using a single property as a comparable to establish market value ordinarily does not provide a sufficient basis for determining the fair cash value of the property under appeal. See Gessner v. Assessors of Marblehead, Mass. ATB Findings of Fact and Reports 2013-98, 104; Carney v. Assessors of Ashland, Mass. ATB Findings of Fact and Reports 2011-559, 566. 
Further, the appellant failed to make any adjustments to his single purportedly comparable property, apart from noting purported differences without any quantification of their potential impact on value.  Reliance on unadjusted assessments of assertedly comparable properties is generally insufficient to justify a value lower than that which was assessed.  See Antonino v. Assessors of Shutesbury, Mass. ATB Findings of Fact and Reports 2008-54, 71. Therefore, the Presiding Commissioner found that the appellant's comparable-assessment analysis did not provide sufficient evidence that the subject property was overvalued by the assessors. 
In addition, the appellant only challenged the value of the secondary dwelling without providing any evidence that the subject property as a whole was overvalued. In the Board's analysis of fair market value, "the question is whether the assessment for the parcel of real estate, including both the land and the structures thereon, is excessive." Massachusetts General Hospital v. Assessors of Belmont, 238 Mass. 396, 403 (1921).  Although the component parts of the assessment are each open to inquiry, an abatement may be granted only where the "single assessment is excessive."  Id.  A taxpayer "does not conclusively establish a right to abatement merely by showing that his land or building is overvalued. 'The tax on a parcel of land and the building thereon is one tax . . . although for statistical purposes they may be valued separately.'"  Kazakaitis v. Assessors of Sharon, Mass. ATB Findings of Fact and Reports 2009-382, 395 (quoting Hinds v. Assessors of Manchester-by-the-Sea, Mass. ATB Findings of Fact and Reports 2006-771, 778); see Assessors of Brookline v. Prudential Insurance Company of America, 310 Mass. 300, 317.     
The appellant also failed to articulate or otherwise quantify the secondary dwelling's supposed "superadequate" features, which he argued were not taken into account in valuing the subject property.  "[A] 'superadequacy' . . . is a type of functional obsolescence caused by something in the subject property that 'exceeds market requirements but does not contribute to value an amount equal to its cost.'"  Harbor Dreams, LLC v. Assessors of Hingham, Mass. ATB Findings of Fact and Reports, 2004-56, 96 (quoting The Appraisal Institute, THE APPRAISAL OF REAL ESTATE (12th Ed., 2001) at 404).  In the present appeal, with the exception of conclusory assertions in the appellant's brief that the secondary dwelling was "unique" or "overbuilt" and that so-called real estate "experts" he had consulted but did not call to testify had concluded that he would not recoup his investment in the property, the appellant offered no evidence to substantiate his claim that the secondary dwelling was superadequate. 
	Finally, the appellant argued that the assessors denied his right to equal protection by recording the secondary dwelling as a house on its own property record card as opposed to an accessory on the same property record card as the primary dwelling, which he alleged was not the practice with similarly situated taxpayers.  "Taxpayers complaining of discriminatory assessments must show 'intentional and arbitrary discrimination,' and 'mere errors of judgment by officials will not support a claim of discrimination.  There must be something more - something which in effect amounts to an intentional violation of practical uniformity.'"  Assessors of Malden v. Appellate Tax Bd., 367 Mass. 395, 402 (1975) (quoting Sunday Lake Iron Co. v. Wakefield, 247 U.S. 350, 352-353 (1918)); see also Brown v. Assessors of Brookline, 43 Mass. App. Ct. 327, 328 (1997).  "Taxpayers 'have normally prevailed on equal protection claims only when they were able to demonstrate a systematic pattern of discrimination.'"  Id., (quoting Southland Mall, Inc. v. Assessors of Garner, 455 F.2d 887, 889 (6th Cir. 1972)).  In the present appeal, the appellant made no such showing of intentional discrimination, only advancing a general claim that other properties were recorded on their property record cards differently than the subject property.  Moreover, the appellant did not offer any evidence to contradict the assessors' assertion that the classification of the property and the second property record card had no impact on the ultimate assessed value of the subject property. Thus, the Presiding Commissioner found that in the absence of any evidence showing intentional and arbitrary discrimination, the appellant was not denied his right to equal protection under the Constitution. 

CONCLUSION
	On the basis of the foregoing, the Presiding Commissioner found that the appellant failed to meet his burden of proving that the subject property was overvalued for the fiscal year at issue.  Accordingly, the Presiding Commissioner issued a single-member decision for the appellee.  
 
					     THE APPELLATE TAX BOARD

					By: ______________________________
						James D. Rose, Commissioner



A true copy,

Attest: __________________________
		 Clerk of the Board
					

  

ATB 2014-765