Robert D. & Judith S. Krumme v. Board of Assessors of the Town of Concord (April 13, 2010)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD

ROBERT D. and               v. 	   BOARD OF ASSESSORS OF     
JUDITH S. KRUMME               	   THE TOWN OF CONCORD
	
Docket No. F298669				   Promulgated:
							   April 13, 2010
        						  
This is an appeal filed under the formal procedure pursuant to G.L. c. 58A, § 7A and G.L. c. 59, §§ 64 and 65, from the refusal of the Board of Assessors of the Town of Concord ("appellee" or "assessors") to abate taxes on certain real estate in Concord,  owned by  and  assessed to Robert D. and Judith S. Krumme (together, "appellants") under G.L. c. 59, §§ 11 and 38 for fiscal year 2008 ("fiscal year at issue").
Commissioner Egan heard this appeal.  Chairman Hammond and Commissioners Scharaffa, Rose and Mulhern joined her in the 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.

	Robert D. Krumme, pro se, for the appellants. 

	Kevin Batt, Esq. for the appellee.
FINDINGS OF FACT AND REPORT

On the basis of the testimony, the stipulated facts and documents, and the other exhibits entered into evidence at the hearing of this appeal, the Appellate Tax Board ("Board") made the following findings of fact. 
On January 1, 2007, the relevant date of assessment for the fiscal year at issue in this appeal, the appellants were the assessed owners of a 3.35-acre parcel of land, improved with a two-story, Colonial-style dwelling, located at 349 Simon Willard Road in Concord, Massachusetts ("subject property").  Originally constructed in 1978, the dwelling on the subject property has a concrete foundation, wood clapboard and brick exterior, and an asphalt shingle roof.  It has nine rooms, including four bedrooms, as well as two full bathrooms and one half bathroom, with a total finished living area of 3,375 square feet.  Interior features include hardwood, carpet and ceramic tile flooring, granite and formica countertops, and two fireplaces.  The basement is unfinished.  The subject property also has a screened porch and a four-car garage.  
The subject property is located in the Nashawtuc Hill neighborhood of Concord.  The evidence revealed that the Nashawtuc Hill neighborhood is one of the most desirable neighborhoods in Concord.  Situated on a hill, it is surrounded by three rivers and offers scenic vistas and abundant natural beauty.  However, additional evidence entered into the record revealed that the subject property was located towards the back of the hill, and did not enjoy enhanced views.  
For the fiscal year at issue, the assessors valued the subject property at $2,145,500 and assessed a tax thereon, at the rate of $10.72 per $1,000, in the total amount of $23,328.68.  On February 28, 2008, the Collector of Taxes for Concord mailed out the actual fiscal year 2008 tax bills.  The appellants timely paid the tax due without incurring interest.  On May 1, 2008, the appellants timely filed an Application for Abatement with the assessors.  The abatement application was denied by vote of the assessors on May 15, 2008.  The appellants timely filed their appeal with the Board on August 1, 2008.  Based on the foregoing, the Board found and ruled that it had jurisdiction to hear and decide this appeal.
A. The Appellants' Case-in-Chief
The appellants presented their case-in-chief primarily through the testimony of Mr. Krumme and the introduction of their sales-comparison analysis, which featured four sales-comparison properties.  The following tables substantially reproduce the appellants' sales-comparison analysis.

  Appellants' Sales-Comparison Properties One and Two
	Subject 
Property	306 Musketaquid Road	Adjust.
($)	291 
Musterfield 
Road	Adjust.
($)	
Sale Price ($)	N/A	1,625,000		1,575,000		
Sale Date	N/A	5/31/2007		9/14/2007		
Proximity  to Subject 		3 Properties by Walking		2 Properties by Walking		
Sale/Time Adjustment 		1.25%
	   20,300	2.38%
	   37,406	
Site (acres)	3.35 	2.83		2.60		
Neighborhood	Same	Same		Same		
Year Built	1978	1985		1976		
Design/Style	Colonial	Colonial		Contem/Mod		
Construction Quality	Good	Good		Good		
Rooms/Baths	9/2.5	10/3.5	  -20,000	10/3	  -15,000	
Living Area (sq. ft.)	3,375	3,002	   27,975	3,493	   -8,850	
Heating/
Cooling	FHW/CA	FA/CA		FA/CA		
Garage	4	2	   15,000	2	   15,000	
Fireplaces	2	2		2		
Pool	None	None		None		
Porch/
Patio	Screen Porch	Enclosed Porch/Patio	   -5,000	Deck/Enclosed
Patio	   -5,000	
Special Improvements		New Kitchen	  -30,000	N/A	N/A	
Adjusted 
Sale Price			1,633,275		1,598,556	






 Appellants' Sales-Comparison Properties Three and Four


	Subject 
Property	398 
Simon
Willard 
Road	Adjust. ($)	87 
Park
Lane	Adjust. ($)	
Sale Price ($)	N/A	1,616,250		1,549,000		
Sale Date	N/A	1/22/2008		6/29/2006		
Proximity  to Subject 		2 Properties
by Walking		4 Properties
by Walking		
Sale/Time Adjustment 		3%
	   48,488
	0		
Site (acres)	3.35 	2.08		1.04		
Neighborhood	Same	Same		Adjacent	  154,900	
Year Built	1978	1978		1952		
Design/Style	Colonial	Contem/Mod		Colonial		
Construction Quality	Good	Good		Good		
Rooms/Baths	9/2.5	9/4	  -15,000	10/3	  -15,000	
Living Area (sq. ft.)	3,375	3,165		3,930	  -41,625	
Heating/
Cooling	FHW/CA	FA/CA		FHW/CA		
Garage	4	2	   15,000	2	   15,000	
Fireplaces	2	3	   -5,000	3	   -5,000	
Pool	None	Pool	  -23,700	None
		
Porch/Patio	Screen 
Porch	Deck and Patio	   -5,000	Deck and Patio	   -5,000	
Special Improvements		N/A	N/A	N/A		
Adjusted 
Sale Price			1,631,038		1,652,275	


In Mr. Krumme's opinion, 306 Musketaquid Road was the property most comparable to the subject property.  According to Mr. Krumme, both properties were constructed as developer "spec houses" around the same time, and the total gross living areas of both dwellings were similar.  Unlike the other sales-comparison properties, 306 Musketaquid Road and the subject property lacked curb appeal, in Mr. Krumme's opinion, because they could not be seen from a primary access road.  
However, Mr. Krumme contended that 306 Musketaquid Road possessed certain advantages over the subject property, including a renovated kitchen and a lot which was more conducive to additional residential expansion.  Mr. Krumme's assertions regarding the subject property's lot were corroborated by the stipulated facts.  The parties stipulated that the subject property had an irregular shape, which Mr. Krumme characterized as a "pork chop" shape.  Further, the parties stipulated that the land towards the rear of the subject property was encumbered by utility easements as well as a forty-foot-wide right-of-way reserved by Concord.  Based on these stipulated facts, the Board found that 306 Musketaquid had a superior lot to the subject property.  However, the Board found that there was not enough detail or evidence in the record to support Mr. Krumme's assertions about the state of the kitchen at 306 Musketaquid Road in comparison to the subject property's kitchen.  
Based on their sales-comparison analysis, with particular reliance on the sale of 306 Musketaquid Road, the appellants' opinion of value for the subject property as of January 1, 2007 was $1,625,000.  
The Assessors' Case-in-Chief
 The assessors presented their case-in-chief primarily through the testimony and Summary Appraisal Report of certified real estate appraiser John H. Neas.  Based on his experience, the Board qualified Mr. Neas as an expert residential real estate appraiser.  
Mr. Neas considered the highest and best use of the subject property to be its continued use as a single-family residential property.  Mr. Neas considered the three usual approaches to value, but ultimately relied on the sales-comparison approach to value the subject property.  Mr. Neas used data from seven sales which took place in Concord in 2006 and 2007 in forming his sales-comparison analysis, which is substantially reproduced in the following tables:









Mr. Neas' Sales-Comparison Properties One through Four
	Subject Property	291 
Muster-
field
Road 	Adj.
($)	306 
Musketa-
quid
Road	Adj.
($)	383 
Simon Willard
Road	Adj.
($)	1200 
Monument Street	Adj. 
($)		Sale Date	N/A	9/2007		5/2007		6/2007		7/2006			Sale 
Price 
($)	N/A	1,575,000		1,625,000		1,825,000		2,092,000			Apprec. 
($)	N/A 	 	 55,125		 32,500		  36,500		 -52,300		Location	NH	NH		NH		NH		Monument Street			Lot Size 	3.35 
acres	2.6 
acres	 35,000	2.83 
acres	 25,000	1.57 
acres	 100,000	2.4 
acres	  50,000		View	Good	Good		Good		Good		Good			Design	Colonial	Contemp.		Colonial		Cape		Colonial			Quality	Good	Good		Good		Good		Good			Year Built	1978	1978		1985		1979		1994			Condition	Good	Good		Good		Good		Good			Rooms/Beds
Baths	9/4/2.5	9/3/2.5.5		10/4/3.5	-10,000	12/5/4.5	 -20,000	10/4/3.5	 -10,000		Living 
Area	3,375	3,493		2,964	 82,200	    5,000	-162,500	5,222	-184,700		Basement	Not 
Finished	2 Finished
Rooms	-20,000	Not 
Finished		Playroom	 -10,000 	Not
Finished			Heating/
Cooling	HW/CA	HA/CA		HA/CA		HW/CA		HA/CA			Garage	4 Car Attached	2 Car
Attached	 20,000	2 car
Attached	 20,000	2 Car 
Attached	  20,000	3 car
Attached	  10,000		Porch/
Patio/
Deck	Screen 
Porch	Deck		Porch		Porch/
Deck		Patio			Fireplaces	Two	Two		Two		Two		Two			Total Adjustment 			 90,125		149,700		-36,000		-187,000		Indicated Value ($)		1,665,125		1,774,700		1,789,000		1,905,000			






Mr. Neas' Sales-Comparison Properties Five through Seven


	Subject Property	168 
Nashawtuc
Road
	Adj. 
($)	65 
Attawan
Road	Adj. 
($)	350 
Musketaquid
Road	Adj. 
($)		Sale Date	N/A	2/2007		12/2006		6/2006			Sale Price ($)	N/A	2,220,000		2,275,000		2,575,000			Apprec.
($)	N/A		  22,200				-77,250		Location	NH	NH		NH		NH			Lot Size 
	3.35 acres 	40,298 
sq. feet	 125,000	1.48 acres	100,000	41,544
Sq. feet	125,000		View	Good	Good		Good		Good			Design	Colonial	Contemporary		Colonial		Contemporary			Quality	Good	Good		Good		Good			Year Built	1978	1974/
Renovated		1983/
Renovated		1900/
Renovated			Condition	Good	Very Good	-200,000	Very Good	-200,000	Very Good	-200,000		Rooms/Beds/
Baths	9/4/2.5	8/4/4.5	 -20,000	11/4/3.5	 -10,000	12/5/4.5	 -20,000		Living Area	3,375	3,208		3,200		6,470	-309,500		Basement	Not Finished	Finished	-100,000	Playroom	 -10,000	2 Finished 
Rooms	 -50,000		Heating/
Cooling	HW/CA	HW/CA		HA/CA	 	HA/CA			Garage	4 Car
Attached	2 Car
Attached	  20,000	2 Car
Attached	  20,000	3 Car
Attached	  10,000		Porch/
Patio/
Deck	Screen Porch	Porch/
Deck/
Patio		None		Porch/
Patio			Fireplace	Two	Three	 -10,000	Two		Two			Total Adjustments			-162,800		-100,000		-521,750		Indicated Value		2,057,200		2,175,000		2,053,250	
		
Based upon his sales-comparison analysis, which yielded indicated values ranging from $1,665,125 to $2,175,000, Mr. Neas concluded that the fair cash value of the subject property as of January 1, 2007 was $2,000,000, which was $145,500 less than its assessed value for the fiscal year at issue.    
The Board's Ultimate Findings of Fact 
On the basis of all of the evidence, the Board found and ruled that the highest and best use of the subject property was its continued use as a single-family residence.  Like the parties, the Board found that the sales-comparison analysis was the most reliable method of valuing the subject property, because of the availability of comparable sales in close proximity to both the subject property and the relevant date of assessment.  The Board also found and ruled that the appellants possessed sufficient familiarity with their property, as well as the surrounding properties, to meaningfully express their opinion of value of the subject property.  
The Board largely adopted the appellants' sales-comparison analysis, which it found to be more probative of the fair cash value of the subject property than the analysis conducted by Mr. Neas.  Both parties used 306 Musketaquid Road and 291 Musterfield Road as sales-comparison properties, but there was no overlap in the remaining sales-comparison properties.  To the extent that they differed from the properties selected by Mr. Neas, the Board found that the properties selected by the appellants were more similar to the subject property in gross living area, year of construction, and other pertinent details.  The appellants made net adjustments of less than $25,000 to three of their four sales-comparison properties, while a net adjustment of $103,275 was made to the fourth property.  In contrast, Mr. Neas made net adjustments of more than $100,000 to four of his seven sales-comparison properties, and he made a net adjustment of over $500,000 to a fifth property.   The Board found that the sales-comparison properties selected by Mr. Neas were less comparable to the subject property than those selected by the appellants, as evidenced by the magnitude of his net adjustments.  The Board, therefore, used the same sales-comparison properties as the appellants in conducting its sales-comparison analysis.  
Similarly, the Board adopted the appellants' methodology of adjusting for differences in date of sale.  The appellants used a factor of 0.25% per month to account for differences in date of sale, based on an assumed annual decline of 3%.  The appellants' assumption was based on a document created by the assessors stating that there was a "slight decrease in sale prices from 2006 to 2007" in Concord.   In contrast, Mr. Neas used a 5% annual decline rate to account for differences in date of sale, which he based on data published by the Federal Reserve Bank of Boston.  The Board found that the 3% figure used by the appellants was more specific to and reflective of sales activity in Concord, and therefore, was more reliable than the data used by Mr. Neas.  
However, the Board's sales-comparison analysis departed from that of the appellants in certain respects.  According to the appellants, prior to 2002, the assessors considered the subject property as having only 2.13 acres for assessment purposes, rather than its actual 3.35 acres, because of its odd configuration and the various easements towards the rear of the property.  Therefore, for the purposes of their sales-comparison analysis, the appellants treated the subject property as having only 2.13 acres.  Because 2.13 acres was closer in size to the lots of their sales-comparison properties, the appellants made no adjustments to account for differences in lot size.  
In contrast, Mr. Neas made adjustments to account for differences in lot size based on a value of $50,000 per acre, which he arrived at after conducting a paired-sales analysis.  The Board found that Mr. Neas' adjustments for differences in lot size were better supported by the evidence, and therefore, adopted his adjustment factor of $50,000 per acre.  In addition, as discussed above, the Board declined to make a positive adjustment in the amount of $30,000 to the sales price of 306 Musketaquid Road to account for what the appellants claimed was an updated kitchen, as there was neither enough detail nor evidence in the record to support such an adjustment.  
Based upon these findings of fact, the Board determined that the appellants' sales-comparison analysis, as modified by the Board, resulted in adjusted-sales prices ranging from $1,631,587 to $1,768,275.  Based on this range and on all of the evidence in the record, the Board found that the fair cash value of the subject property as of January 1, 2007 was $1,700,000.  
Accordingly, the Board decided this appeal for the appellants and granted an abatement in the amount of $4,847.40.       
   
			     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, § 38.  Fair cash value is defined as the price upon which a willing buyer and a willing seller will agree if both 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 . . . prove 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)).  "[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).   
In the present appeal, the appellants offered substantial, credible evidence showing that the assessed value of the subject property was greater than its fair cash value.  Specifically, the appellants offered a highly persuasive sales-comparison analysis showing that the adjusted sales prices of nearby, comparable properties were significantly lower than the assessed value of the subject property.  An owner of property is entitled to express his opinion of its value during the relevant time period if he is experienced in dealing with the property, is familiar with its characteristics, and recognizes its proper uses or potential uses.  Menici v. Orton Crane & Shovel Co., 285 Mass. 499, 503-504 (1934), and the cases cited therein.  Accord Correia v. New Bedford Redevelopment Authority, 5 Mass. App. Ct. 289, 295 (1977), rev'd on other grounds, 375 Mass. 360 (1978).  In this appeal, the Board found and ruled that the appellants possessed the requisite familiarity and knowledge about their property, as well as the surrounding properties, to express meaningfully their opinion of its value. The Board found that the appellants' opinion of the subject property's value, in conjunction with the other evidence which they introduced, provided persuasive evidence of the subject property's fair cash value.  
Conversely, "the mere qualification of a person as an expert does not endow his testimony with any magic qualities."  Boston Gas Co. v. Assessors of Boston, 334 Mass. at 579.  In this appeal, the Board found that the opinion of value formed by Mr. Neas lacked probative force.  As evidenced by the comparatively large net adjustments he made to those properties, the Board found that many of the sales-comparison properties used by Mr. Neas were not sufficiently comparable to the subject property to provide reliable evidence of the fair cash value of the subject property. 
Although the Board found the appellants' valuation analysis highly persuasive, it did not adopt their opinion of value of the subject property.  Market value is a matter of judgment; the Board must make its decision on evidence presented but need not adopt the valuation of any particular witness.  Assessors of Quincy v. Boston Consol. Gas Co., 309 Mass. 60 (1941).  In evaluating the evidence before it, the Board may select among the various elements of value and form its own independent judgment of fair cash value.  North American Philips Lighting Corp. v. Assessors of Lynn, 392 Mass. 296, 300 (1984).  
In the present appeal, the Board adopted those portions of the appellants' sales-comparison analysis which it found to be supported by the evidence. However, with respect to adjustments for differences in lot size, the Board found that the data used by Mr. Neas was better supported by the evidence.  It therefore adopted Mr. Neas' $50,000-per- acre adjustment to account for differences in lot size.  Further, the Board declined to make an adjustment to 306 Musketaquid Road to account for its supposedly updated kitchen, as the appellants had, because there was not enough detail or evidence in the record to support such an adjustment.  
Therefore, the Board formed its own opinion of value of the subject property, and found and ruled that its fair cash value was $1,700,000 for fiscal year 2008.  Accordingly, the Board decided this appeal for the appellants, and granted an abatement of $4,847.40.  

				           APPELLATE TAX BOARD 

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


A true copy,

Attest:						__
	       Clerk of the Board

 The appellants originally filed an appeal under the informal procedure.  On September 2, 2008, the assessors elected to transfer this appeal to the formal docket.  Pursuant to G.L. c. 58A, § 7, the assessors, "within 30 days of the date of service of the [petition], may elect to have the appeal heard under the formal procedure."  
 This amount includes a Community Preservation Act Tax. 
 Per G.L. c. 59, §§ 59 and 57C, when assessors have mailed the actual tax bills after December 31st, taxpayers have until the later of May 1st or 30 days from the date of mailing to file an abatement application.  The appellants' abatement application was therefore timely filed on May 1, 2008.  
 The Board noted that there appeared to be minor mathematical errors in the appellants' calculation of the sale/time adjustment.  
 As discussed further below, for the purposes of their analysis, the appellants considered the subject property as having 2.13 acres rather than its actual 3.35 acres.  According to the appellants, prior to 2002, the assessors treated the subject property as having only 2.13 acres because of its odd configuration and the various easements towards the rear of the subject property.  
  Nashawtuc Hill in Concord has been abbreviated as "NH."
 Though both parties used 306 Musketaquid Road in Concord in their sales-comparison analyses, there was a slight discrepancy in the gross living area reported by each party.  Because it was supported by other documentary evidence entered into the record, the Board adopted the gross living area reported by the appellants, which was 3,002 square feet.  

ATB 2010-299