Frederick D. Lewis, Et ux v. Board of Assessors of the City of Lowell (May 14, 2015)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


FREDERICK D. LEWIS, ET UX       v. 	  BOARD OF ASSESSORS OF   THE CITY OF LOWELL


Docket No.: F318856					  Promulgated:
								  May 14, 2015

			
	This is an appeal 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 City of Lowell ("appellee" or "assessors") to abate a tax on certain real estate in Lowell, owned by and assessed to Frederick D. Lewis, Et Ux ("appellant" or "Mr. Lewis") under G.L. c. 59, §§ 11 and 38, for fiscal year 2013 ("fiscal year at issue"). 
	Commissioner Good heard this appeal.  Chairman Hammond and Commissioners Scharaffa, Rose and Chmielinski joined her in the 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.

Frederick D. Lewis, pro se, for the appellant.

	Karen Golden, assessor for the appellee.




FINDINGS OF FACT AND REPORT
	Based on the testimony and exhibits offered into evidence at the hearing of this appeal, the Appellate Tax Board ("Board") made the following findings of fact.
	On January 1, 2012, the relevant valuation date for the fiscal year at issue, the appellant was the assessed owner of a 0.76-acre parcel of land improved with a 5,148 square-foot Colonial-style residence located at 818 Andover Street in Lowell ("subject property").  For the fiscal year at issue, the assessors valued the subject property at $582,600, and assessed a tax thereon, at the rate of $15.01 per thousand, in the total amount of $8,744.83, which the appellant timely paid without incurring interest.  
	On January 30, 2013, the appellant timely filed an Application for Abatement with the assessors, who voted to deny the abatement on February 5, 2013.  On April 16, 2013, the appellant timely filed his appeal with the Board.  On the basis of the foregoing facts, the Board found and ruled that it had jurisdiction to hear and decide this appeal.  
The subject property's dwelling was built in 1870 and has ten rooms, including five bedrooms, along with three full bathrooms and one half bathroom, for a total of 5,148 square feet of living area.  The subject property also features a two-car garage.  The assessors considered it to be in overall good condition.  
The appellant contended that the assessed value of the subject property exceeded its fair cash value for the fiscal year at issue.  In support of his claim, he submitted a bank appraisal, conducted for financing purposes, dated June 8, 2012.  Using a sales-comparison analysis, the appraiser, who did not testify at the hearing of this appeal, determined a fair cash value for the subject property of $495,000 as of June 8, 2012.  
In addition to the appraisal, the appellant introduced a real estate listing for a property located at 386 Andover Street in Lowell.  The dwelling at 386 Andover Street was built in 1874 and had 7,304 square feet of finished living area, including seven bedrooms as well as three full bathrooms and one half bathroom.  That property was put on the market in March of 2014 with a listing price of $499,900, and it remained on the market as of the time of the hearing of this appeal in June of 2014.  
Lastly, the appellant presented three sales of purportedly comparable properties.  The following table includes relevant information about each of those properties. 
Address	Living Area (sf)	Sale Date	Sale Price	
53 Mansur St.	5,647	7/31/12	$570,000	
31 Waverly Ave.	4,400	5/17/13	$419,000	
70 Fairmount St.	4,419	3/29/13	$335,000	



	
	The appellant's opinion of the subject property's fair market value for the fiscal year at issue was $495,000, consistent with its appraised value.  
In defense of the assessment, the assessors presented a sales-comparison analysis of three properties.  Relevant information about each of those properties appears in the following table.
Address	Living Area (sf)	Sale Date	Sale Price	Sale Price/PSF	
726 Andover St.	3,845	8/26/11	$535,000	$139.14	
657 Andover St.	2,844	9/30/10	$399,000	$140.30	
208 Fairmount St.	3,803	6/30/11	$515,000	$135.42	

	These properties, the assessors noted, had an average sale price of $137.50 per square foot, which was significantly higher than the subject property's assessed value on a per-square-foot basis, which was $113.17.  Thus, in the assessors' opinion, these sales provided additional support for the subject property's assessed value.
 The Board's Valuation Conclusions
	There were shortcomings in the evidence presented by both parties. 
The Board placed no weight on the appraisal offered by the appellant for a number of reasons.  First, the appraiser was not present to testify at the hearing of this appeal and he therefore could not be questioned regarding his adjustments and conclusions by either the Presiding Commissioner or the assessors.  Second, the appraisal did not include property record cards or deeds of sale for the purportedly comparable properties contained therein, and the Board could not verify the accuracy of the information presented nor confirm that the sales were arm's-length transactions.  Third, the appraiser included in his appraisal and appeared to have relied in part on properties that were on the market at the time of the appraisal, but had not sold, and thus represented mere asking prices rather than consummated, arm's-length transactions.  For all of these reasons, the Board found that the appraisal did not provide a reliable indication of the subject property's fair cash value, and it therefore placed no weight on the opinions contained therein.  
The Board likewise declined to place weight on the listing for 386 Andover offered by the appellant.  As an initial matter, that listing represented a mere asking price and not a consummated, arm's-length sale. Moreover, that property was listed in March of 2014, well after the relevant valuation date of January 1, 2012.  The Board found that, without adjustment to account for this difference, the listing was too remote in time to provide a reliable indication of the subject property's fair cash value on that date.  This same deficiency detracted from the probative worth of the appellant's comparable sales.  
The appellant relied in part on the sales of 70 Fairmount Street and 31 Waverly Street, but those sales did not occur until March 29, 2013 and May 17, 2013, well after the relevant valuation date of January 1, 2012.  The Board found that these sales, without adjustment to account for this difference, did not provide a reliable indication of the subject property's fair cash value on that date.  That left just one sale, 53 Mansur Street, which sold in July of 2012 for $570,000.  However, the Board could not say that a single, unadjusted sale price represented persuasive evidence of fair cash value.  
The evidence offered by the assessors suffered from many of the same shortcomings as the evidence offered by the appellant.  For example, 657 Andover Street sold in 2010 and was nearly half the size of the subject property, with just 2,844 square feet of finished living area.   Thus it was too remote in time and too different from the subject property to provide a reliable indication of its fair cash value on the relevant valuation date.  In fact, all three of the properties relied upon by the assessors were smaller in size than the subject property, which made their reliance on per-square-foot sale prices for comparison particularly unavailing, as per-square-foot sale prices typically decline with increases in living area.   appraisal institute, the appraisal of real estate 212 (13th ed. 2008). ("Generally, as size increases, unit prices decrease. Conversely, as size decreases, unit prices increase.")  Finally, like the appellant, the assessors failed to make any adjustments to the sale prices of their sales-comparison properties, despite obvious differences from the subject property.  For these reasons, the Board declined to place weight on the valuation evidence offered by the assessors, deferring instead to the presumptive validity of the assessment.  
In conclusion, on the basis of all of the evidence and bearing in mind the presumptive validity of the assessment, the Board found that the appellant failed to meet his burden of proving that the subject property's assessed value exceeded its fair cash value for the fiscal year at issue.  Accordingly, the Board issued a decision for the appellee in this appeal.

				   OPINION
Assessors are required to assess real estate at its fair cash value. G.L. c. 59, § 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 its assessed value. See Schlaiker v. Assessors of Great Barrington, 365 Mass. 243, 245 (1974). "The burden of proof is upon the petitioner to make out its right as [a] matter of law to [an] abatement of the tax." Id. (quoting Judson Freight Forwarding Co. v. Commonwealth, 242 Mass. 47, 55 (1922)). 
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.'" General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 600 (1984) (quoting Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983)).  
In the present appeal, the Board found that the evidence presented by the appellant was not reliable or persuasive enough to establish that the assessed value of the subject property exceeded its fair cash value.  For example, the appellant offered into evidence an appraisal report valuing the subject property, but not the testimony of the appraiser who conducted the appraisal or other evidence, such as deeds or property records for the properties discussed in the appraisal, which could be used to verify or support the information and conclusions contained in the appraisal.  The Board therefore gave the opinions contained therein no weight.  See, e.g. Papernik v. Assessors of Sharon, Mass. ATB Findings of Fact and Reports 2011-600, 615 (ruling that hearsay opinion evidence, which, although not objected to by the assessors, was entitled to no weight because it was offered without proper foundation, qualification, or underlying factual support and without providing the assessors with an opportunity for cross-examination).    
Similarly, the Board found that the current sale listing for a nearby property offered by the appellant lacked probative force because it was a mere asking price, rather than a consummated sale price, and therefore it did not provide a reliable indication of the subject property's fair market value.  See Campanelli Westfield LLC v. Assessors of Quincy, Mass. ATB Findings of Fact and Reports 2014-101, 122 (finding that mere asking prices do not furnish reliable evidence of market prices).  Moreover, that listing was comparatively remote in time from the relevant date of valuation, as were some of the other comparable sale properties offered by the appellant, and the appellant made no adjustment to account for this difference.  Properties are "comparable" to the subject property when they share "fundamental similarities" with the subject property, including location, size, and date of sale. Lattuca v. Robsham, 442 Mass. 205, 216 (2004). When comparable sales are considered, adjustments must be made for various differences among the properties which would otherwise cause disparities in the properties' sale prices. See Pembroke Industrial Park Co., Inc. v. Assessors of Pembroke, Mass. ATB Findings of Fact and Reports 1998-1072, 1082.  As the appellant used properties that were remote in time from the relevant date of valuation, and made no adjustment to account for this difference, the Board found and ruled that this evidence did not provide a reliable indication of the subject property's fair market value on that date. See Trustees of the Charles Cotesworth Pinckney Trust v. Assessors of West Tisbury, Mass. ATB Findings of Fact and Reports 2007-621, 628 (finding that sales too remote in time from the relevant date of valuation, with no adjustment for this difference, did not provide persuasive evidence of value for the property at issue).  
The remaining evidence offered by the appellant was a single sale - 53 Mansur Street - which sold in July of 2012 for $570,000.  However, a "single sale does not necessarily reflect market value."  The Appraisal of Real Estate at 317.   Furthermore, as with the other comparison properties, the appellant made no adjustment to account for differences between 53 Mansur Street and the subject property, and the Board therefore declined to place weight on that sale price.  
The Board was similarly unpersuaded by the evidence proffered by the assessors, and it placed no weight on the valuation evidence offered by them.  Because neither party presented reliable evidence of the subject property's fair cash value for fiscal year 2009, the Board relied on the presumptive validity of the assessment.  See The May Department Store Co. v. Assessors of Newton, Mass. ATB Findings of Fact and Reports 2009-153, 195 ("'[T]he taxpayer loses when the taxpayer and the assessors present the board with equally footless cases.'")(quoting Hampton Assoc. v. Assessors of Northhampton, 52 Mass. App. Ct. 110, 119 (2001)).   
In conclusion, on the basis of all of the evidence, the Board found and ruled that the appellant failed to meet his burden of proving that the assessed value of the subject property exceeded its fair cash value for the fiscal year at issue.  Accordingly, the Board issued a decision for the appellee in this appeal.

  THE APPELLATE TAX BOARD


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



A true copy,


Attest:		______	_______
	     Clerk of the Board

ATB 2015-182