Mark Nelson, Trustee/P.O.A. for George Nelson v. Board of Assessors of the Town of Wilmington (May 20, 2013)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


MARK NELSON, TRUSTEE/P.O.A. 	 v.	  BOARD OF ASSESSORS OF
FOR GEORGE NELSON      	 	  THE TOWN OF WILMINGTON
 							 		   
Docket Nos. F310076, F310892 		  Promulgated:
							  May 20, 2013

				   
These are appeals filed under the formal procedure pursuant to G.L. c. 58A, § 7 and G.L. c. 59, §§ 64 and 65  by the appellant, Mark Nelson, Trustee/ Power of Attorney for George Nelson ("trustee" or "appellant") from the refusal of the appellee, the Board of Assessors of the Town of Wilmington ("assessors" or "appellee"), to grant an abatement of tax on real estate owned or occupied for the fiscal years 2010 and 2011 ("fiscal years at issue").
Commissioner Chmielinski heard these appeals and was joined by Chairman Hammond and Commissioners Scharaffa, Rose and Mulhern in decisions for the appellee.  
The 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. 
 
Mark Nelson, pro se, for the appellant.

John Richard Hucksman, Jr., Esq. for the appellee.
	
FINDINGS OF FACT AND REPORT
On the basis of testimony and exhibits offered into evidence at the hearing of these appeals, the Appellate Tax Board ("Board") made the following findings of fact.
On January 1, 2009 and on January 1, 2010, the assessment dates for the fiscal years at issue, George Nelson was the assessed owner of a 36,000 square-foot (0.83-acre) parcel of land improved with a Colonial-style, single-family dwelling ("subject dwelling") located at 4 Poplar Street in Wilmington ("subject property").  
For fiscal year 2010, the assessors valued the subject property at $968,800 and assessed a tax thereon, at the rate of $11.53 per thousand, in the total amount of $11,170,26.   Pursuant to G.L. c. 59, § 57C, the appellant paid the tax due in four timely quarterly payments.  On February 1, 2010, the appellant filed a timely Application for Abatement under G.L.  c. 59, § 59 with the assessors.  The abatement application was deemed denied on May 1, 2010; however, the assessors did not send a notice of the deemed denial to the appellant as required by G.L. c. 59, § 63.  Instead, they purported to deny the application on June 14, 2010.  Because the assessors failed to notify the appellant under G.L. c. 59, § 63, the appellant had two additional months -- until October 1, 2012 -- to file an appeal, pursuant to G.L. c. 59, § 65C.  On September 13, 2010, the appellant seasonably 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 the appeal for fiscal year 2010.  
For fiscal year 2011, the appellee valued the subject property at $968,800 and assessed a tax thereon, at the rate of $11.88 per $1,000, in the total amount of $11,509.34.  Pursuant to G.L. c. 59, § 57C, the appellant paid the tax due in four timely quarterly payments.  On January 21, 2011, the appellant filed a timely Application for Abatement under G.L. c. 59, § 59 with the assessors, who denied the application on March 7, 2011.  On April 25, 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 the appeal for fiscal year 2011.
The subject property is located in Wilmington, in a residential neighborhood that is improved with homes that are in well-maintained condition and is located a short driving distance from shopping and other amenities.  
The subject home, built in 2004, is actually comprised of two separate detached dwellings.  The first dwelling is a two and one-half story Colonial-style dwelling, which is comprised of ten rooms, including four bedrooms as well as three full and one half bathrooms.  In addition to the above-grade living area, the dwelling includes a partially finished basement with a media room that was not on the property record card.  The second dwelling is a one and one-half story, Cape Cod-style dwelling that functions as a detached garage with an "au pair" suite above it.  This dwelling is comprised of seven rooms, including three bedrooms, as well as two full and one half bathrooms.  In total, including the above-grade, below-grade and au pair suite for both dwellings, the subject home contains approximately 6,546 square feet of gross living area.  
The subject home is equipped with forced hot water heating fueled by oil and with central air conditioning.  The exterior is cedar or redwood clapboard and it has an asphalt gable/hip style roof.  Other amenities include one fireplace, hardwood flooring in the Colonial-style dwelling, a covered porch in front, a large rear deck off the au pair suite, a shed, and a fenced-in yard.  The property record card lists the Cape Cod-style dwelling as in "below average" condition and the Colonial-style dwelling in "good" condition; the property record cards for both dwellings reference the subject home's "modern" bathrooms and "luxurious" kitchens.  
The subject property is located on Poplar Street, which is a private way and is serviced by private water and septic systems.  The subject property abuts 53 acres of conservation land, which the subject dwelling overlooks.  As of the relevant assessment dates, no occupancy permit had been issued. 
The appellant presented his case in chief through the testimony of Mr. Nelson and Humphrey Moynihan, the Chairman of the appellee and through the submission of documentary evidence.  
The appellant submitted his own appraisal of the subject property, completed by David Johnson.  The cover sheet to his appraisal report was missing, and on the signature sheet, Mr. Johnson noted that the "effective date" of his appraisal was June 2, 2011.  Mr. Johnson was not presented as a witness at the hearing.  The appellee, however, did not object to the admission of the appraisal report.
Mr. Johnson used the comparable-sales method for appraising the subject property.  He selected three purportedly comparable properties:  33 Mill Road; 24 Mill Road; and Lot 6 Lt. Buck Drive.  Only Comparables One and Three were comparable sales; Comparable Two was merely a real estate listing.   Mr. Johnson's report indicated that he made $20-per-square-foot adjustments for differences in above-grade gross living areas over 100 square feet, a flat $25,000 adjustment for the subject property's finished basement, and a flat $50,000 square-foot adjustment for the subject property's above-garage living area.  He did not make any adjustment for the subject property's location adjacent to 53 acres of conservation property.  On the basis of his comparable-sales analysis, Mr. Johnson concluded that the subject property had a fair market value of $900,000 as of June 2, 2011. 
The appraisal contains an addendum, in which the appraiser related that, through conversations with the property owner, he had learned that Wilmington had refused to issue an occupancy permit for the subject home.  The addendum stated Mr. Johnson's opinion that "[t]he property owner has in the past and will in the future have problems transferring title without this occupancy permit."  The addendum concluded that the lack of an occupancy permit would potentially reduce the subject property's value to "zero."  
The appellant also submitted evidence of nuisance activity on Poplar Street in front of and adjacent to the subject property.  The evidence included his testimony, photographs depicting all-terrain vehicle ("ATV") activity on Poplar Street, and copies of his numerous e-mail correspondences to Wilmington law enforcement officers complaining of his neighbor's ATV activity.  The appellant also submitted evidence of winter conditions on Poplar Street in an attempt to demonstrate that the subject property should be devalued for its location on a private way devoid of town services for snow removal.  
Mr. Moynihan, whom the appellant called as a witness, testified that he did not agree with Mr. Johnson's opinion that the lack of an occupancy permit would result in a considerable decrease in fair market value.  Mr. Moynihan also testified that, in his opinion, the subject property's location on a private way versus a public way did not decrease its fair market value. 
The appellee presented its case-in-chief through the testimony of Phyllis DeChristophoro, an independent real estate appraiser whom the Board qualified as a residential real estate appraisal expert, and the submission of documentary evidence.  Ms. DeChristophoro presented her real estate appraisal, which she had prepared for the hearing of these appeals.  Her appraisal gave her opinion of the subject property's value as of both relevant assessment dates.  Ms. DeChristophoro testified that, in her opinion, the relevant real estate market was very stable during the fiscal years at issue, so she gave the same opinion of value for both valuation dates.
Ms. DeChristophoro noted that the subject property has a private water and private septic system but, in her opinion, those features did not affect market value or marketability of the subject property.  The Board found Ms. DeChristophoro's opinion on this to be credible.  Ms. DeChristophoro also testified that the subject property was an attractive and well-maintained property.
Ms. DeChristophoro used the comparable-sales method as her primary method for appraising the subject property.  Ms. DeChristophoro selected five purportedly comparable properties:  59 Lexington Street in the abutting town of Burlington; 40 Mill Road in Wilmington; 33 Mill Road in Wilmington; 132 Marion Street in Wilmington; and 42 Florenza Drive in Wilmington.  Ms. DeChristophoro explained that, while she found four comparable-sale properties in Wilimington in the "high-end range," she did venture into neighboring Burlington in order to find her Comparable Sale One, a property with a dwelling that contained over 3,400 square feet of gross living area, which she found to be very comparable to the subject.  Ms. DeChristophoro testified that, in preparing her appraisal report, she relied on property record cards, spoke with the real estate brokers involved in the comparable sales and viewed the comparable-sale properties from the exterior.  
Ms. DeChristophoro next explained her adjustments.  She stated that she gave a $60-per-square-foot adjustment for gross living area, but only a $30-per-square-foot adjustment for the gross living area over the subject property's garage because she considered this space to be an accessory unit and thus only worth half the value of the regular living space.  She also applied a $10,000 adjustment per room of below-grade living area, and a $10,000 adjustment for each additional bathroom.  Finally, she applied a 10% adjustment for superior location to her comparable property located in Burlington.  The Board found these adjustments to be reasonable.  
Comparable One, 59 Lexington Street in Burlington, was a 47,906 square-foot site improved with a single-family Cape-style dwelling, in good condition and of comparable age to the subject dwelling, with 5,399 square feet of above-grade living area comprised of eleven rooms, including three bedrooms, as well as four full and one half bathrooms, and a full finished basement with an office and game room.  Amenities included a six-car garage without a finished portion above, a sprinkler system, one fireplace, and central air conditioning.  Comparable One sold on May 20, 2010 for $1,159,000.  Ms. DeChristophoro made an upward adjustment for the subject's above-garage living space, and downward adjustments for the comparable property's superior location, site size, above-grade living space and room count, and larger garage, for a total net adjustment of    -$87,080, resulting in an adjusted sale price of $1,071,920.
Comparable Two, 40 Mill Road in Wilmington, was a 25,992 square-foot site improved with a single-family Colonial-style dwelling, in good condition and the same age as the subject dwelling, with 3,794 square feet of abov-grade living area comprised of ten rooms, including four bedrooms, as well as two full and one half bathrooms, and a full finished basement with a great room and an additional bathroom.  Amenities included a three-car garage without a finished portion above, a sprinkler system, three fireplaces, and central air conditioning.  Comparable Two sold on October 31, 2008 for $829,750.  Ms. DeChristophoro made an upward adjustment for the subject's above-grade living space and room count, porch, and above-garage living space, and downward adjustments for the comparable's larger garage and additional fireplaces, for a total net adjustment of $190,120, resulting in an adjusted sale price of $1,019,870.
Ms. DeChristophoro's Comparable Three, 33 Mill Road in Wilmington, was the same property that Mr. Johnson had used as his Comparable One.  According to Ms. DeChristophoro, this was a 32,324 square-foot site improved with a single-family Colonial-style dwelling, in good condition and of comparable age to the subject dwelling.  Mr. Johnson and Ms. DeChristophoro agreed that the above-grade living area was 3,454 square feet, but Ms. DeChristophoro counted a total of ten rooms, versus Mr. Johnson's eleven-room count.  Both agreed that the dwelling had four bedrooms, as well as two full and one half bathrooms.  Mr. Johnson characterized the basement as full and partially finished.  Ms. DeChristophoro characterized it as having a full finished basement and further described it as containing a game room and an additional bedroom.  Amenities included a three-car garage without an above finished portion, a sprinkler system and three fireplaces.  Unlike Mr. Johnson, Ms. DeChristophoro further found that Comparable Three had central air conditioning.  Ms. DeChristophoro found that Comparable Three sold on December 4, 2000 for $750,000.  Ms. DeChristophoro made an upward adjustment for the subject's above-grade living area and room count, porch, and above-garage living space, and downward adjustments for the comparable's larger garage and additional fireplaces, for a total net adjustment of $212,520, versus Mr. Johnson's adjustments of $146,220, which included an adjustment for the comparable's supposed lack of central air conditioning.  Ms. DeChristophoro arrived at an adjusted sale price of $962,520, as compared with Mr. Johnson's adjusted sale price of $896,220.
Comparable Four, 132 Marion Street in Wilmington was a 54,414 square-foot site improved with a single-family Colonial-style dwelling, in good condition and of comparable age to the subject dwelling, with 3,346 square feet of above-grade living area comprised of ten rooms, including four bedrooms, as well as two full and one half bathrooms and a full unfinished basement.  Amenities included a two-car garage without a finished portion above, one fireplace, and central air conditioning.  Comparable Four sold on May 15, 2008 for $725,000.  Ms. DeChristophoro made upward adjustments for the subject's above-grade living area and room count, finished basement, deck, porch, above-garage living space, and fence and shed, for a total net adjustment of $263,000, resulting in an adjusted sale price of $988,000.  Ms. DeChristophoro testified that, while the lot size of Comparable Four was larger than the subject property, she did not make an adjustment for lot size because, in her opinion, the usable portion of the Comparable Four's lot was equivalent to the subject property's lot.
Comparable Five, 42 Fiorenza Drive in Wilmington, was a 27,118 square-foot site improved with a single-family Colonial-style dwelling, in good condition and about seven years older than the subject dwelling, with 3,520 square feet of above-grade living area comprised of nine rooms, including three bedrooms, as well as two full and one half bathrooms, and a full finished basement with two additional rooms.  Amenities included a two-car garage without a finished portion above, two fireplaces, and central air conditioning.  Comparable Five sold on July 30, 2009 for $758,500.  Ms. DeChristophoro made upward adjustments for the subject's above-grade living space and room count and the above-garage living space, and downward adjustments for the comparable's fenced gazebo and pool and its additional fireplace, for a total net adjustment of $206,560, resulting in an adjusted sale price of $965,060.
Ms. DeChristophoro analyzed and weighed her various comparable-sale prices and determined a fair market value of $1,000,000 for the subject property for both fiscal years at issue.  
The appellee also submitted into evidence a real estate listing of the subject property by the appellant's real estate agent, last updated on January 14, 2010, characterizing the subject dwelling as an "exceptional home" and with an asking price of $1,080,000.  The attached pictures of the interior show the subject dwelling to be a very modern residence with ample light and in good condition.  
Ms. DeChristophoro testified that, in preparing her appraisal report, she had not considered the subject property's lack of an occupancy permit.  She explained that, in general, a great many properties lack an occupancy permit when they are on the market.  She further testified that, after completing her appraisal, she then spoke with the building inspector for Wilmington, Al Spaulding, to determine the extent of work needed to be done to secure an occupancy permit for the subject property.  On the basis of this investigation, Ms. DeChristophoro determined that further work and the submission of a certified plot plan, a building permit for the above-garage living space, a structural engineer review, and architectural plans for the dwelling and the garage - all at a cost of approximately $20,000 -- were necessary to obtain a building permit.  Ms. DeChristophoro thus testified that, in her opinion, the subject property's fair market value should be reduced to $980,000 for both fiscal years at issue to account for the approximately $20,000 of expenses.  Ms. DeChristophoro admitted that she did not verify whether $20,000 was a reasonable cost for the above items, stating that architectural, certification and engineering plans were beyond the scope of her expertise, so she relied upon the opinion of the building inspector for this information.
On cross-examination, Ms. DeChristophoro admitted that she did not enter the subject property in conducting her appraisal.  Ms. DeChristophoro also admitted that she did not check any police reports for a history of police activity in the subject property's general vicinity, explaining that, in her opinion, the neighborhood appeared quiet, as it was a private road and abutted conservation property.  Because she did not observe any problems with the neighborhood, she stated that researching police reports would have been beyond the ordinary scope of appraisal work.
On the basis of the evidence presented, the Board made the following ultimate findings of fact.  First, the Board found that the appellant failed to meet his burden of proving whether, and the extent to which, the lack of an occupancy permit affected the fair market value of the subject property.  The appellant further failed to show that the subject assessment did not already account for the lack of an occupancy permit for the subject property.  The property record card specifies the assessors' opinion that the Cape Cod-style home was in "below average" condition as of the relevant assessment dates, indicating that the assessors valued the property recognizing that further work was required.  Moreover, as the real estate listing for the subject property revealed, the appellant believed that the subject property, with its "exceptional home," would justify an asking price of $1,080,000 once it was able to be occupied; the appellant offered no evidence of the cost necessary to complete the subject dwelling to a condition where an occupancy permit could issue.  Because the only evidence indicated that there remained about $20,000 worth of items to repair before the occupancy permit could be issued, the appellant failed to show that the lack of an occupancy permit rendered the subject assessment excessive.  
Second, the Board found that Mr. Johnson's appraisal report was not persuasive in proving a value for the subject property that was lower than its assessed value for the fiscal years at issue.  Mr. Johnson was not presented as a witness at the hearing and thus not available for cross-examination by the assessors or questioning by the hearing officer.   The Board therefore found that the portions of the report containing Mr. Johnson's opinions of value, as well as the adjustments upon which those opinions were based, lacked adequate foundation and were unsubstantiated hearsay.  Accordingly, the Board considered only the undisputed factual descriptions contained in his appraisal report, and gave no weight to the opinions of value expressed in Mr. Johnson's appraisal report.
Finally, the Board found that the appellant failed to meet his burden of proving that conditions on Poplar Street -- either the fact that it was a private way without connection to the public water and sewer system, or the activity on the street -- devalued the subject property.  The Board found credible the testimony of Mr. Moynihan, who explained that, based on his experience of valuing residential real estate, the subject property's location on a private road did not in any way decrease its fair market value.  The Board also found credible Ms. DeChristophoro's testimony that she found Poplar Street to be a safe street and, based on her observation and her expertise, she did not feel that investigation into police reports was warranted in connection with a fair-market analysis of the subject property.  Further, the appellant in no way quantified the impact of these alleged deficiencies on the subject's fair market value.  
Therefore, the Board determined that the appellant failed to meet his burden of proving that the assessed value was higher than the subject property's fair market value.  Accordingly the Board issued decisions for the appellee in these appeals.

OPINION
The 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 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, taxpayers "'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)).  In the present appeals, the appellant attempted to undermine the assessment by introducing affirmative evidence of value.  
The appellant argued that the lack of an occupancy permit diminished the fair cash value of the property.  However, the appellant offered no testimony or reasoned analysis regarding how the value was affected.  He merely asserted that the subject home lacked an occupancy permit as of the valuation date and therefore the subject property was worthless.  However, the mere existence of some sort of restriction, by itself, does not merit an abatement of tax. To establish the effect of the restriction on value, "the appellant must show how the restriction 'would affect the value of the property to a potential buyer.'"  See, Ross v. Board of Assessors of the Town of Ipswich, Mass. ATB Findings of Fact and Reports 2000-952, 959 (citing Reliable Electronic Finishing Co. v. Assessors of Canton, 410 Mass. 381, 382 (1991); and Parkinson v. Assessors of Medfield, 398 Mass. 112 (1986).  
The appellant offered no opinion and did not present credible expert testimony to quantify how the lack of an occupancy permit would affect the subject property's valuation.  Instead, the appellant presented an appraisal report by Mr. Johnson that contained an unsubstantiated statement that the lack of an occupancy permit would potentially reduce the subject property's value to "zero."  "However, the fact that land is not saleable does not mean it must have no 'fair cash value.'"  Mashpee Wampanoag Indian Tribal Council, Inc. v. Assessors of Mashpee, 379 Mass. 420, 421 (Mass. 1980) (quoting Beale v. Boston, 166 Mass. 53, 55 (1896)).  Rather, "it is proper to determine fair cash value from the intrinsic value of the property, including 'any and all the uses to which the property is adapted in the hands of any owner.'"  Id. at 421 (quoting Tremont & Suffolk Mills v. Lowell, 163 Mass. 283, 285 (1895)).  Here, the Board found credible the testimony of Ms. DeChristophoro that only about $20,000 worth of work was all that was required to obtain the occupancy permit. 
The appellant next offered a comparable-sale analysis completed by Mr. Johnson in an attempt to undermine the subject assessment.  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).  
However, the Board did not rely on the comparable-sales analysis prepared by the appellant's appraiser, Mr. Johnson, because Mr. Johnson did not testify at the hearing and was not available for voir dire or cross-examination. The Board considered only the undisputed factual descriptions contained in Mr. Johnson's appraisal report, and excluded his opinions of value as well as the adjustments upon which those opinions were based.  The Board rejected these elements of the appraisal report because they lacked adequate foundation,  were unsubstantiated hearsay, and Mr. Johnson was not present at the hearing or available for cross-examination by the assessors or questioning by the hearing officer.  Accordingly, the Board gave no weight to the opinions expressed in the hearsay appraisal report.  See, e.g., Lian & Chan v. Assessors of Lexington, Mass. ATB Findings of Fact and Reports 2012-1098, 1103-1104; Turner v. Assessors of Lunenburg, Mass. ATB Findings of Fact and Reports 2012-912, 917-918; Florio, Trustee v. Assessors of Newbury, Mass. ATB Findings of Fact and Reports 2011-725, 757; Walachy v. Assessors of Holyoke, Mass. ATB Findings of Fact and Reports 2009-620, 626.    
Finally, the appellant attempted to show that the subject property had a value lower than that assessed by demonstrating that the subject's location on a private way with no public water or sewer service and with recreational-vehicle activity negatively impacted its value.  The Board, however, found that the appellant failed to quantify any diminution in the subject property's value associated with any of these issues.  See, e.g., Abuzahra v. Assessors of Rowley, Mass. ATB Findings of Fact and Reports 2008-1514, 1522 (citing Braintree Real Estate Management Co., LLC v. Assessors of Braintree, Mass. ATB Findings of Fact and Reports 2005-432, 446-447, aff'd, 66 Mass. App. Ct. 1112 (2006)).  The Board also credited the testimony of Mr. Moynihan, who explained that, based on his valuation experience, a property's location on a private road does not decrease its fair market value.  The Board also found credible Ms. DeChristophoro's statement that Poplar Street appeared to be a reasonably safe street.  Not every nuisance resulting from living near neighbors must result in a reduction in fair market value; in the instant appeal, the Board found that the appellant failed to quantify any diminution in value resulting from activity on Poplar Street. Id.  The Board thus ruled that no adjustment for such activity was warranted.
On the basis of the foregoing, the Board ultimately found that the appellant failed to prove a value lower than the subject assessments for the subject property.  Accordingly, the Board issued decisions for the appellee.
   
 APPELLATE TAX BOARD

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

A true copy,

Attest: __________________________ 
	   Clerk of the Board

 Although he did not mention in his testimony before the Board, the e-mail correspondence submitted as documentary evidence also refers to the neighbor's stockcar activity.
 Mr. Johnson reported that he measured the site at 32,234 square feet.
 Mr. Johnson's report indicated that 33 Mill Road sold on December 12, 2009.

ATB 2013-320