630 South Main Street Realty Trust v. Board of Assessors of the Town of Sharon (September 5, 2002)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



630 SOUTH MAIN STREET		v.	BOARD OF ASSESSORS OF 
REALTY TRUST					THE TOWN OF SHARON

Docket No. F260226				Promulgated:
							September 5, 2002


	This is an appeal filed under the formal procedure in accordance with G.L. c. 59, §§ 64 and 65, from the refusal of the Assessors of Sharon to abate the taxes on certain real estate located in the town of Sharon owned by and assessed to the appellant under G.L. c. 59, § 38, for fiscal year 2001.
	Commissioner Scharaffa heard the appeal and, pursuant to G.L. c. 58A, § 1, issued a single-member decision for the appellant.
These findings of fact and report are issued pursuant to a request by the appellee under G.L. c. 58A, § 13 and 831 CMR 1.32.

	James F. Zoppo, Trustee, pro se, for the appellant.
	Mark J. Mazur, Asst. Assessor, for the appellee.
FINDINGS OF FACT AND REPORT
	On January 1, 2000, 630 South Main Street Realty Trust ("appellant") was the assessed owner of a parcel of real estate located at the same address in the town of Sharon.  For fiscal year 2001, the Board of Assessors of the Town of Sharon ("assessors") valued the property at $356,100 and assessed a tax at the rate of $17.44 per thousand in the amount of $6,210.38.  The appellant timely paid the tax due without incurring interest.  On December 13, 2000, the appellant timely applied in writing for an abatement.  The assessors purported to deny the application for abatement on March 15, 2001.  Subsequently, on May 10, 2001, the appellant seasonably filed an appeal with the Appellate Tax Board ("Board").  On this basis, the presiding member found that this Board had jurisdiction to hear and decide the present appeal. 
	The subject property is a 1.4 acre, mixed-use parcel of real estate located at 630 Main Street, Sharon.  The parcel is improved with a single-family residence and a nursery/garden center.  The subject property is "grandfathered" under the current zoning laws and can be used only for its current combined use or solely for residential purposes.
The dwelling is a wooden, two-story "Cape" style house, built circa 1900, with 1,881 square feet of gross living area.  The house has six rooms in total, including two bedrooms, two bathrooms and an unfinished basement.  There are two fireplaces.  The dwelling is serviced by a cesspool.  The subject property is also improved with two structural greenhouses and one "lean-to" greenhouse.  In total, there are approximately 3,800 square feet of greenhouse space.  There is also a retail building, which the appellant uses for the sale of nursery products.  This building contains approximately 1,044 square feet of retail space on the ground floor, and approximately 720 square feet of office area on the upper level.  
The assessors classified 1.17 acres (51,116 square feet) of the subject property as commercial property and valued the land itself at $157,400 or $3.08 per square foot.  The remaining 0.23 acre (10,000 square feet) of land was classified as residential and valued at $30,800 or $3.08 per square foot.  The assessors valued the residence at $107,300 or $57.04 per square foot of gross living area, and all of the commercial improvements at $60,600.  The total assessment for fiscal year 2001 was $356,100.  
	Mr. Joseph Zoppo, trustee of the realty trust, who was familiar with the subject property, testified on behalf of the appellant.  In his opinion, the subject property's fair cash value, as of January 1, 2000, was $262,385.  He testified that this amount could be broken down into two components, $94,485 for the combined land value and $167,900 total for the value of all buildings.  In support of his opinion of value, Mr. Zoppo relied on the assessment for 586 South Main Street, located adjacent to the subject property.  
According to the property record cards offered into evidence by the assessors, 586 South Main is also a   mixed-use property with a dwelling and a veterinary clinic located on the 2.7 acre parcel.  The residence, built circa 1921, is a four-bedroom, two-bath, wooden structure.  The house has an enclosed porch and a partially finished basement.  The dwelling has 2,316 square feet of gross living area.  The commercial building is much newer, having been built in 1979, and is used as the property owner's veterinary clinic.  This one-story building which contains a fireplace, unfinished basement, garage, and central air conditioning has a gross area of 2,914 square feet.  
For fiscal year 2001, the assessors valued 586 South Main Street at $319,600.  Mr. Zoppo pointed out that, in contrast to the subject property, which the assessors classified as primarily commercial, the assessors classified and valued 586 South Main Street as primarily residential.  In fact, the assessors classified only 0.46 acre (20,000 square feet) of 586 South Main Street as commercial and valued it at $34,900 or only $1.75 per square foot.  The majority of 586 South Main Street, 2.24 acres, was classified as residential and assessed in two separate parts.  First, the assessors determined that 1.38 acres (60,000 square feet) was devoted to the dwelling and valued this land at $83,400 or only $1.39 per square foot.  Second, the assessors valued the remaining 0.86 acres, located in the rear of the lot, at only $5,200 or approximately $0.14 per square foot.  The dwelling was valued at $124,700 or $53.84 per square foot of gross living area, and the commercial office building was valued at $71,400. 
Relying primarily on the land assessment for 586 South Main Street, $123,500 for 2.7 acres, Mr. Zoppo argued that the subject property was overvalued because it was assessed at a higher amount, $188,200, for a parcel roughly one-half the land area of 586 South Main Street.  
In support of the assessment, the assessors offered the testimony and appraisal report of Charles R. Haven.  Mr. Haven testified that in his opinion, the subject property's fair cash value as of January 1, 2000, ranged from $375,000 to $425,000, with a median value of $400,000.  Mr. Haven's opinion of value was obtained by adding together two components, (1) a value for the nursery/garden center and (2) a value for the residence.  
To arrive at a fair cash value for the commercial portion of the subject property, Mr. Haven relied upon four sales of nursery/garden center properties, all of which were located outside of Sharon.  The sales information, which Mr. Haven provided for these transactions, is as follows.


Town	Sale  Price	Sale Date	Lot Size (Acres) 	
Property Description	
Randolph	$227,000	07/30/99	2.90	Sm. Garden Center with minimal improvements	
Weymouth	$260,000	04/24/97	1.42	Sm. Garden Center with minimal improvements	
Natick	$750,000	01/19/99	1.12	Large Florist in good commercial area	
Needham	$345,000	10/08/99	0.71	Small Florist shop/4,000 SF wood-frame improvements	

To determine the fair cash value for the residential portion of the subject property, Mr. Haven relied on four residential sales and five vacant lot sales, all located in Sharon.  The sales information, which Mr. Haven presented pertaining to these transactions, is as follows.

Location	Sale Price	Sale Date	Lot Size (acres)	
Property Description	
29 High Plan Rd	$151,000	06/30/99	1.20	6-Rm. Cape/inferior to subject	
341 South Main St 	$168,000	09/26/00	0.55	6-Rm. Cape/inferior to subject	
475 South Main St	$170,000	12/16/99	0.55	5-Rm. Ranch/average condition	
42 Walpole St	$171,000	09/29/00	0.23	6-Rm. Cape/average condition	
315 Mansfield St 	$110,000	11/17/99	1.78	Some wetlands reported	
84 Azalea St	$155,000	06/30/99	2.90		
Lot 18 Iris Lane	$105,000	06/08/00	9.90	Some wetlands reported	
71B Mansfield St	$125,000	09/14/99	1.70		
719 Bay Rd	$170,000	06/30/99	4.50	Higher value area than subject	

Mr. Haven did not, however, explain, either in his appraisal report or his testimony, how these properties compared to the subject property.  Although he did have a column for "comments" in his report, they were limited to the type of improvement on the comparable-sale property, if any, and an indication that some of the lots contained wetlands.  Moreover, in his comparable-sales analysis, Mr. Haven did not make any adjustments to either the commercial or residential sales for factors different from the subject property, such as time of sale, location, lot size, gross living area, commercial building area, age or property condition.  Instead, he simply stated the sale date, lot size and sale price and then offered an opinion of fair cash value for the subject property.  
Mr. Haven opined that the nursery portion of the subject property had a fair cash value ranging from $250,000 to $275,000, and that the residential portion of the subject property had a fair cash value that ranged from $125,000 to $150,000.  To arrive at his final estimate of value for the subject property Mr. Haven simply added together his estimates of value for (1) the commercial and (2) the residential components, suggesting a fifty-fifty allocation.  However, in his testimony, Mr. Haven indicated that his estimate of value was based on an overall assumption that the property was eight-five percent commercial.  Mr. Haven did not explain either this discrepancy or on what basis this later assumption was made.  Furthermore, he did not explain how that assumption entered into his final estimate of value for the subject property.  Lastly, Mr. Haven did not address the issue of how, and to what extent, the mix of residential and commercial use land affected the total value of the subject property.    
Based on the evidence presented, the presiding member found and ruled that the appellant met his burden of proving that the subject property was overvalued for fiscal year 2001.  According to the property record cards, the subject property was classified as eighty-five percent commercial whereas the adjacent property, also a mixed use, was classified as only seventeen percent commercial.  In addition, both the commercial and the residential land of the subject parcel were valued at $3.08 per-square-foot.  The land value of the parcel located at 586 South Main Street, however, was valued significantly less than the subject property.  Specifically, the "commercial" land was valued at $1.75 per-square-foot, and the "residential" land was separated into two valuations, (1) 1.38 acres valued at $1.39 per-square-foot and (2) 0.86 acres valued at only $0.14 per-square-foot.  Accordingly, the presiding member found that both the "commercial" and the "residential" portions of the property located at 586 South Main Street were assessed at considerably less per-square-foot values than the subject property and, therefore, supported a reduction in the subject property's value.  
Moreover, the presiding member found significant flaws in Mr. Haven's comparable-sales approach including, Mr. Haven's failure to establish comparability between the subject property and the sales that he relied upon in his analysis.  The presiding member further found that to the extent the referenced sale properties differed from the subject property, Mr. Haven failed to make appropriate adjustments for factors such as timing, location, lot size, building area, age or condition.  Furthermore, the presiding member found that Mr. Haven failed to explain how such differences could or would affect the fair cash value of the subject property.  
On the basis of the foregoing, the presiding member found that the fair cash value of the subject property for the fiscal year at issue was $300,000 and granted an abatement in the amount of $978.38.  
  
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 his burden of proving otherwise.  Schlaiker v. Board of Assessors of Great Barrington, 356 Mass. 243, 245 (1974).  Accordingly, the burden of proof is upon the appellant to make out his right as a matter of law to an abatement of the tax.  Id.  The appellant must show that the assessed valuation of his property was improper.  See Foxboro Associates v. Board of Assessors of Foxborough, 385 Mass. 679, 391 (1982).  
In appeals before this Board, the appellant "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).  Generally, real estate valuation experts, the Massachusetts courts and this Board rely upon three approaches to determine the fair cash value of property:  income capitalization, sales comparison, and cost reproduction.  Correia v. New Bedford Development Authority, 375 Mass. 360, 362 (1978).  
In the present appeal, the appellant offered his opinion of the subject property's fair cash value for the fiscal year at issue.  Generally, an owner of property is competent to testify to his or her opinion of value of the property.  See Board of Assessors of Holbrook v. Dennehey, 357 Mass. 243, 245 (1970)("as an owner of the property in question, he 'is assumed to have a knowledge of his property adequate to form an intelligent estimate of its value.'").  In support of his opinion that the fair cash value of the subject property was $262,385 for fiscal year 2001, the appellant relied on the assessment for 586 South Main Street, located adjacent to the subject property.  
At any hearing relative to the assessed fair cash valuation or classification of property, evidence as to the fair cash valuation or classification of property at which assessors have assessed other property of a comparable nature or class shall be admissible.

G.L. c. 58A, § 12B.  In the present appeal, the presiding member found and ruled that the assessment for 586 South Main Street was probative evidence that the subject property was overvalued for fiscal year 2001.
The presiding member further found that Mr. Haven's flawed appraisal report did not reliably estimate the subject property's fair cash value.  First and foremost, Mr. Haven failed to establish comparability between the subject property and the sales that he relied upon to arrive at a determination of fair cash value for the subject property.  Furthermore, the presiding member found that Mr. Haven failed to make any qualified percentage adjustments for differences that did exist between the subject property and the so-called "comparables."  Accordingly, the presiding member found that the appraisal report offered into evidence and relied upon by the assessors was flawed and unreliable.
The presiding member further found that the property located at 586 South Main Street was valued at (1) $0.14 per-square-foot for 0.86 acres of residential classified land, (2) $1.39 per-square-foot for 1.38 acres of residential classified land; and, (3) $1.75 per-square-foot for 0.46 acres of commercial classified land.  He found that these values were considerably less than the $3.08 per-square-foot assessed value attributed to the subject property's residential and commercial land.
In evaluating the evidence before it, the presiding member selected from among the various elements of value and formed his own independent judgment of fair cash value.  General Electric v. Assessors of Lynn, 393 Mass. 591, 605 (1984); North American Philips Lighting Corp. v. Assessors of Lynn, 392 Mass. 296, 300 (1984).  The Board need not specify the exact manner in which it arrived at its valuation.  Jordan Marsh v. Assessors of Malden, 359 Mass. 106, 110 (1971).  The fair cash value of property cannot be proven with "mathematical certainty and must ultimately rest in the realm of opinion, estimate and judgment."  Assessors of Quincy v. Boston Consol. Gas Co., 309 Mass. 60, 72 (1941).
Based on the evidence presented, the presiding member found and ruled that the appellant exposed flaws in the assessors' method of valuation.  He further found and ruled that the fair cash value of the subject property for fiscal
year 2001 was $300,000.  Accordingly, the presiding member issued a single-member decision for the appellant and granted an abatement in the amount of $978.38.  

						APPELLATE TAX BOARD

					By:					    	
					   Frank J. Scharaffa, Member


A true copy,

Attest:					
		Clerk of the Board

 The assessors denied the appellant's application for abatement more than three months after the application was filed.  Accordingly, the denial was a nullity and the application was deemed denied by operation of law three months after the filing of the application for abatement, or March 13, 2001.  See G.L. c. 59, § 64.  The appellant filed its appeal with this Board within three months of the deemed denial date and, therefore, the Board has jurisdiction over the appeal.

ATB 2002-401