Hanna Realty Trust v. Board of Assessors of the Town of Natick (July 2, 2002)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD

HANNA REALTY TRUST           v. 	BOARD OF ASSESSORS OF THE TOWN OF NATICK


Docket Nos. 	F262306				Promulgated:
			F262307				July 2, 2002

These are appeals under the formal procedure, pursuant to G.L. c. 59,  §§ 64 and 65, from the refusal of the appellee to abate taxes on certain real estate in the Town of Natick owned by and assessed to the appellant under G.L. c. 59, § 38, for fiscal year 2001.  
	Commissioner Rose heard these appeals and issued a single-member decision for the appellee in accordance with G.L. c. 58A, § 1, and 831 C.M.R. 1.20.
	These findings of fact and report are made pursuant to a request by the appellant under G.L. c. 58A, § 13, and 831 C.M.R. 1.32.



	Leonard Hanna, Trustee, pro se, for the appellant.

	John Flynn, Esq., assessor, for the appellee.



FINDINGS OF FACT AND REPORT

On January 1, 2000, Hanna Realty Trust ("appellant") was the assessed owner of two parcels of real estate, each improved with a dwelling, located at 20A Manchester Place (F262307) and 20B Manchester Place (F262306) in the Town of Natick.  The Board of Assessors of Natick ("Assessors") valued the properties respectively at $163,200 and $207,700, and assessed a tax thereon, at the rate of $12.74 per thousand for both years, in the amounts of $2,079.17 and $2,712.56, respectively.  
On February 1, 2001, the appellant timely filed applications for abatement for both parcels.  In the applications, the appellant sought an $81,600 reduction in the valuation of 20A Manchester Place and a $117,700 reduction in valuation for 20B Manchester Place.   
	The Assessors denied the appellant's applications on May 1, 2001.  On July 24, 2001, the appellant timely filed appeals with the Appellate Tax Board ("Board").  On this basis, the presiding member found that the Board had jurisdiction to hear and decide these appeals.
The property at issue in docket number F262307, 20A Manchester Place, consists of a 26,259 square-foot parcel of land, improved with a 585 square-foot, cottage-style house.  Built in 1940, the house has one bedroom, one bathroom, and a partial basement.  
The property at issue in docket number F262306, 20B Manchester Place, consists of a 34,844 square-foot parcel of land, improved with a 651 square-foot, cottage-style house.  Built in 1940, this house has one bedroom and one bathroom, but has no basement.
Leonard T. Hanna, trustee of the Hanna Realty Trust, testified on behalf of the appellant.  He maintained that the properties' fair cash values were $81,600 and $90,000 respectively.  Mr. Hanna alleged discriminatory assessment as evidenced by the valuations of other properties located on Manchester Place.  He further alleged that, when valuing the subject properties, the Assessors did not consider restrictions, such as restrictive covenants on both properties and an inability to gain approval for a sewer easement over 20B Manchester Place which he claims restricted his ability to further develop his parcels.  
In support of his claims, Mr. Hanna submitted documents demonstrating his efforts to further develop the properties.  Among the documents was a Natick Zoning Board of Appeals approval of a special permit to divide a preexisting single parcel improved by two houses with frontage of 25 feet, into the two subject lots, 20A and 20B Manchester Place. Each lot contains one house and has 12.5 feet of frontage.  There is a covenant that runs with the land executed by the appellant agreeing that there will be no further subdivision of the lots and that each lot is restricted to one dwelling.  The covenant allows the appellant to sell portions of the lots to abutting lot owners, as long as the lots remain in compliance with area, set back, and other zoning by-law requirements.  Further, the appellant cannot alter the frontage configuration. 
Mr. Hanna also submitted documents showing that the town approved demolition of the cottage on each subject property, but denied an application for building permits because the sewer service to the properties is not adequate to support the proposed construction of one 2,400 square-foot, two-story home on each property.  He provided documentation of two separate bids of approximately $60,000 each to upgrade sewer service for both properties. 
 In his applications for abatement, Mr. Hanna asserted that his lots should not be assessed as legal building lots because they are nonconforming to zoning requirements for frontage.  He alleged that he cannot expand the house located at 20A Manchester Place because he cannot obtain a zoning variance for frontage or a building permit to expand the property.  Thus, he reasoned, the land at 20A Manchester Place should not be assessed any higher than $35,600, the fiscal year 2001 assessment of the home located on the parcel.  
In regard to 20B Manchester Place, Mr. Hanna alleged that the lot should not be assessed as a potential buildable lot because of nonconforming frontage.  In addition, he alleged that the town will not permit him to run a water and sewer line over 20B Manchester Place to connect to the existing line in Manchester Place.  Mr. Hanna maintained that this situation prohibits him from using the lot as a building lot or from selling the cottage located on the property.
Mr. Hanna, however, provided no evidence of any restrictions other than a copy of the covenant, and provided no evidence regarding any diminution to the value of the properties caused by the covenant.  In addition, Mr. Hanna produced no evidence regarding the purported sewer easement, nor did he produce evidence of any diminution to the value of the properties attributable to the sewer easement.  Furthermore, he provided no support for his conclusion that the valuations should be discounted because the lots are not legal building lots.  He also failed to provide documentation that the town has prohibited him from building new homes on the lots for frontage or sewer easement reasons.  
Although Mr. Hanna maintained that the various issues he raised interfered with his ability to develop and sell the parcels, he presented no evidence that he had either unsuccessfully tried to sell the properties or that restrictions, necessary sewer repairs, or other issues, have prevented him from selling the properties.  Further, he offered no evidence to support a conclusion that the issues he raised affected the value of the parcels as currently developed.  The Assessors valued the subject lots based on the cottages located on the subject parcels, as of the assessment date at issue.  The Assessors determined, and the Board agrees, that the current use of the properties constitutes the highest and best use as of the fiscal years at issue.  Accordingly, Mr. Hanna's alleged inability to further develop the parcels with larger, more valuable, two-story homes does not address the central issue of these appeals which is whether the assessed values of the appellant's properties as of the relevant assessment date exceeded their fair cash values.  Mr. Hanna provided no support for his allegations that the properties were overassessed.  
Moreover, even assuming that Mr. Hanna's argument concerning a perceived interference with development was relevant, the documentation he submitted does not support his position.  The documents show that Mr. Hanna obtained demolition permits for the homes located on the subject properties, but was denied building permits for inadequate sewer only, not nonconforming frontage or sewer easement issues.  Also, the restrictive covenant does not prohibit building new homes on the subject properties, it merely limits each lot to one home.  Accordingly, the evidence establishes that Mr. Hanna can proceed with the development of larger homes on the parcels if he is willing to incur the expense of improving the sewer connections.   
Further, Mr. Hanna provided no support for his claim of discriminatory assessment as compared to other properties on the street.  He submitted no evidence of comparable sales or assessment data to support his opinions of value or the allegations asserted.  
William Chenard, assessor for Natick, testified in defense of the assessment of the subject properties.  Mr. Chenard offered into evidence an assessment report containing comparable sales data for seven properties sold between June 1999 and June 2000.  These comparable sales were made within six months of the relevant assessment date.  The properties all contain single-family dwellings built on lots ranging in size from 3,798 square feet to 27,199 square feet.  The per-square-foot selling price for the lot areas ranged from a high of $46 for the smallest lot to a low of $6.69 for the largest lot.  The subject properties, 26,259 and 34,844 square feet, are most proximate in size to the largest comparable offered by the Assessors of 27,199 square feet located at 34 Jennings Pond.  This property is improved with an 851 square-foot cottage style house built in 1930.  The lot sold for $6.69 per-square-foot ($182,000) of lot area on February 25, 2000, within three months of the relevant assessment date.  The assessed lot values per-square-foot for the subject properties, $6.21 for 20A Manchester Place and $5.96 for 20B Manchester Place, are less than the per-square-foot sale price of the largest comparable lot.  The appellant's opinion of value for the properties, $3.11 per-square-foot of lot area for the lot located at 20A Manchester Place, and $2.58 per-square-foot of lot area for the lot at 20B Manchester Place are not supported by any persuasive evidence.  Thus, the presiding member found and ruled that the comparable sales data offered by the Assessors supports the Assessors' valuations of the subject properties.  
Mr. Chenard also presented a table containing information on sales of unimproved lots in the town of Natick between September 1999 and October 2000.  This report included per-square-foot sale prices relating to the appellant's recent sales of two unbuildable parcels of land that abut the subject properties.  According to the Assessors' records and deeds evidencing these sales, the appellant sold one abutting, unbuildable, 6,919 square-foot lot for $5.06 per-square-foot on January 7, 1999.  Further, two days before the relevant assessment date, December 30, 1999, the appellant sold a second abutting, unbuildable, 4,900 square-foot lot for $7.14 per-square-foot.  The presiding member found and ruled that these sales do not support the appellant's opinion of value of the subject properties.
Finally, Mr. Chenard presented a table entitled "Review of Assessed Values" which stated that, in Natick, a base lot of 20,000 square feet is assessed at $9.20 per-square-foot ($184,000) of land, and for parcels of land containing more than 20,000 square feet, the first 20,000 square feet of land are assessed at $9.20 per-square-foot ($184,000) and the parcel's land in excess of 20,000 square feet is assessed at $1.20 per-square-foot.  This report included fourteen properties in Natick ranging in size from 18,528 square feet to 46,400 square feet.  The assessed land values ranged from $4.65 per-square-foot to $9.83 per-square-foot.  The land area of twelve of the fourteen properties was assessed within the $7 to $9 per-square-foot range.  The land located at 20A Manchester Place was assessed at $4.86 per-square-foot, and the land located at 20B Manchester Place was assessed at $4.87 per-square-foot.  Further, Mr. Chenard noted that, contrary to the appellant's assertion, the sewer easement was taken into consideration in determining the subject properties' values by allowing a ten percent reduction in value.  Mr. Chenard testified that the Assessors also allowed a ten percent reduction in valuation for the properties' topographies.  The presiding member found that Mr. Chenard's testimony supported the Assessors' valuation.  
The presiding member found and ruled that the subject assessments were within the range of valuation of the comparable sales offered by the Assessors.  Further, the presiding member found that the appellant failed to offer any substantial evidence to support his opinion of fair cash value.  
The presiding member found and ruled that the appellant did not support his claim of overvaluation.  His vague assertions concerning perceived difficulties with further development of the parcels did not establish that the assessed value of the parcels exceeded their fair cash value.  Moreover, the Assessors' evidence of comparable sales supported the assessed value. Thus, the presiding member found that the appellant did not meet its burden of proving that the subject properties were overvalued for fiscal year 2001.
Moreover, to the extent that the appellant attempted to allege disproportionate assessment in the claim of discriminatory assessment, the presiding member found and ruled that there was no evidence that established, or even raised an inference, that the Assessors engaged in an intentional scheme of disproportionate assessment. Accordingly, the presiding member found and ruled that the appellant did not satisfy its burden of proving that the subject properties were overassessed.
On this basis, the presiding member decided these appeals for the Assessors and issued a single member decision for the appellee on March 13, 2002.      

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 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 assessment is presumed valid unless the taxpayer sustains the burden of proving otherwise.  Schlaiker v. Board of Assessors of Great Barrington, 365 Mass. 243, 245 (1974).
	Accordingly, the burden of proof is upon the appellant to make out its right as a matter of law to an abatement of the tax.  Id.  The appellant must show that it has complied with the statutory prerequisites to its appeal, Cohen v. Assessors of Boston, 344 Mass. 268, 271 (1962), and that the assessed valuation of the property was improper.  See Foxboro Associates v. Board of Assessors of Foxborough, 385 Mass. 679, 691 (1982).  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. v. Assessors of Lynn, 393 Mass. 591, 600 (1984) (quoting Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983)).    
	In the present appeals, the presiding member found that the appellant did not "expose flaws or errors in the assessors' method of valuation," nor did the appellant "present persuasive evidence of overvaluation."  In fact, the appellant offered no evidence supporting its opinion of fair cash valuation of the subject properties.  Instead, the appellant offered vague assertions, testimony and documents regarding plans for further improvement of the properties.  The presiding member found and ruled that the appellant offered no competent evidence to support its opinion of the fair cash value of the properties.
Furthermore, "[i]n order to obtain relief on the basis of disproportionate assessment, a taxpayer must show that there is an 'intentional policy or scheme of valuing properties or classes of properties at a lower percentage of fair cash value than the taxpayer's property.'"  Brown v. Assessors of Brookline, 43 Mass. App. Ct. 327, 332 (1997) (quoting Shopper's World, Inc. v. Assessors of Framingham, 348 Mass. 366, 377 (1965)).  If taxpayers successfully demonstrate improper assessment of such a number of properties to establish an inference that such a scheme exists, the burden of going forward to disprove such a scheme shifts to the assessors.  Shopper's World, 348 Mass. at 377.  "The ultimate burden of persuasion, of course, will remain upon the taxpayer[s]."  First National Stores, Inc. v Assessors of Somerville, 358 Mass. 554, 562 (1971).
In the present appeals, the presiding member found that the appellant did not present evidence supporting a scheme of disproportionate assessment.  Furthermore, the presiding member found that the appellant did not produce evidence that could even raise an inference of a scheme of disproportionate assessment.  Accordingly, the presiding member found and ruled that the appellant failed to prove that the Assessors engaged in an "intentional widespread scheme of discrimination."  Stillson v. Assessors of Gloucester, 385 Mass. 724, 727-28 (1982).
Based on the evidence, the presiding member found and ruled that the appellant failed to meet its burden of proving that the subject properties were overvalued in fiscal year 2001.  Accordingly, the presiding member decided these appeals for the appellee. 

					     APPELLATE TAX BOARD
						    By:__________________________
     James D. Rose, Member



True copy,


Attest:______________________
        Clerk of the Board 
			

1


ATB 2002-309