Parviz Tayebati, Trustee, Parviz Tayebati 2004 Revocable Trust v. Board of Assessors of the Town of Sherborn (May 4, 2017)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD



PARVIZ TAYEBATI, TRUSTEE		   v.	   BOARD OF ASSESSORS OF
PARVIZ TAYEBATI 2004 			   	   THE TOWN OF SHERBORN
REVOCABLE TRUST			

Docket Nos. F318909, F318910		   	   Promulgated:
								   May 4, 2017
							   

	These are appeals 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 Town of Sherborn ("assessors" or "appellee") to abate taxes on certain real estate located in the Town of Sherborn, owned by Parviz Tayebati, Trustee of Parviz Tayebati 2004 Revocable Trust ("appellant"), under G.L. c. 59, §§ 11 and 38 for fiscal year 2013 ("fiscal year at issue").
	Commissioner Good heard these appeals.  Chairman Hammond and Commissioners Rose and Chmielinski joined her in the Revised Decisions for the appellant. 
	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.

	Joel E. Faller, Esq. and Arnold W. Hunnewell, Jr., Esq. for the appellant.

	Michael R. Siddall, Esq. for the appellee.
FINDINGS OF FACT AND REPORT

On January 1, 2012, the relevant date of assessment for the fiscal year at issue, the appellant was the assessed owner of two contiguous parcels of real estate, containing 11.49 acres of land, located at 134 Farm Road and 134A Farm Road (collectively "subject properties") in Sherborn.  The subject properties are part of a 12.24-acre estate that abuts Farm Pond, and they are located in the most desirable part of Sherborn.  The appellant purchased the subject properties, together with a 0.75-acre parcel not at issue in these appeals, for $7,500,000 on August 1, 2008.  
The parcel located at 134 Farm Road, which is identified for assessing purposes as Map 15, Lot 5E, is a 4.74-acre waterfront parcel of land improved with a two-story, custom-built, Mansion-style home, built in 2000.  The parcel located at 134A Farm Road, which is identified for assessing purposes as Map 15, Lot 5F, is a 6.75-acre, irregularly shaped parcel of land, with approximately 2.58 acres of wetlands.  This parcel is improved with a large barn and attached conventional-style home, also built in 2000.  
For the fiscal year at issue, the assessors valued 134 Farm Road and 134A Farm Road at $4,274,200 and $1,324,000, respectively, and assessed taxes thereon at the rate of $19.72 per thousand, in the corresponding amounts of $84,287.22 and $26,109.28.  The Sherborn Collector of Taxes mailed the fiscal year 2013 tax bills on September 21, 2012.  In accordance with G.L. c. 59, § 57, the appellant timely paid the taxes assessed without incurring interest.  On October 30, 2012, in accordance with G.L. c. 59, § 59, the appellant timely filed Applications for Abatement with the assessors.  The assessors denied the appellant's abatement applications on January 29, 2013.  On April 17, 2013, in accordance with G.L. c. 59, §§ 64 and 65, the appellant seasonably filed his appeals with the Board.  On the basis of these facts, the Board found and ruled that it had jurisdiction to hear and decide these appeals.
Sherborn is a small rural community located about 18 miles southwest of Boston.  Sherborn's population is just slightly more than four thousand people and it has a very limited amount of commercial and industrial property, with open space comprising more than 50% of the town's area.  Known for its excellent school system, which it shares with the town of Dover, high property values, and open land, Sherborn is a very desirable residential community. 
Situated on the Natick/Dover side of Sherborn, the subject properties are located close to schools, the town center and natural amenities.  They are bordered on the south by Farm Pond, on the east by a 9.15-acre estate, on the west by a 5.58-acre parcel, and on the north by two estate properties, Charlescote Farm (168+ acres) and the Massachusetts Audubon Society (277+ acres).  Amenities of the subject properties include significant privacy, spectacular views and direct water access via 134 Farm Road.       
The parcel located at 134 Farm Road is improved with a mansion-style home ("subject home") that is set to the rear of the parcel, providing dramatic views of the water and privacy from the street.  The subject home contains 9,331 square feet of living area and is comprised of twelve rooms, including five bedrooms, as well as three full bathrooms, two half bathrooms and one three-quarter bathroom.  The exterior of the subject home is a mix of wood-shingle and fieldstone, with an asphalt-shingled gable roof.  
The subject home features double-door entry into the foyer; a formal dining room; a chef's kitchen wing with an adjoining butler's pantry; a family room with a floor-to-ceiling stone fireplace; a billiards room with a wet bar; and a formal living room with a cathedral ceiling.  There are fine interior finishes throughout the home, including cherry-wood floors and woodwork, tray ceilings, and custom crown and base moldings.  Other amenities include:  a three-car attached garage; two additional fireplaces; a home theater; a meditation room; a fitness room; a wine cellar; an in-ground pool and a cabana with bath; a private beach, a dock and patio area; a central vacuum system; an alarm system; a lawn sprinkler system; and a screened-in porch with built-in grill and refrigerator.  
The parcel located at 134A Farm Road is improved with a 2,547-square-foot Conventional style home ("guesthouse") that, although located closer to the front of the parcel than the subject home, is still situated far enough from the road to provide considerable privacy.  The guesthouse contains five rooms, including one bedroom, as well as two full bathrooms.  Other amenities include a screened-in porch, a greenhouse, an open porch, and a central vacuum system.  The exterior of the structure is wood-shingled, with an asphalt-shingled gable roof.  The parcel also includes an attached two-car garage and an attached four-stable barn, which are at grade level with the guesthouse.  Located on the parcel is a dry hydrant, which would allow firefighters to pump water from the pond in the case of a fire on either of the subject properties. 
Both the subject home and the guesthouse are heated by a hydro-air heating system fueled by oil, and they also include central air conditioning.  The subject properties are serviced by private water and sewer systems.  
At the time that the appellant purchased the subject properties, the parcels were subject to certain conditions and limitations set forth in a Subdivision Plan ("Plan") created by the previous owner.  The intent of the original subdivision was to allow the previous owner to build an accessory apartment for her parents that contained 1,500 square feet, which is in excess of the 800 square feet allowed by Sherborn zoning by-laws.  In return, the previous owner voluntarily limited the transfer and usage of the subject properties. Pursuant to the Plan, the subject properties were required to be maintained in common ownership and 134A Farm Road was restricted to a single-family dwelling with a living area no greater than 1,500 square feet with occupancy limited to blood relatives of the owners of 134 Farm Road, a caretaker of the property or other domestic employee, or persons qualifying as low or moderate income tenants under state law.  
At the hearing of these appeals, the appellant introduced the testimony and appraisal report of William Curley, Jr., whom the Board qualified as an expert in the area of residential real estate valuation.  
Mr. Curley first determined that the highest and best use of the subject properties was their existing residential use.  Mr. Curley next considered the approaches to value - the cost approach, income-capitalization approach and sales-comparison approach.  Mr. Curley determined that only the sales-comparison approach should be employed in valuing the subject properties, and thus, this was the only method that he developed.  
Mr. Curley noted that he had previously provided an opinion of value for the subject properties in a Board appeal concerning the prior fiscal year.  See Parviz Tayebati 2004 Revocable Trust v. Sherborn, Mass. ATB Findings of Fact and Reports 2014-838.  For that proceeding, Mr. Curley had prepared two separate appraisals, one for each of the subject properties' two lots.  For the appraisal for 134A Farm Road, Mr. Curley considered its lack of independent transferability and thus employed the income-capitalization approach.  The Board rejected Mr. Curley's approach in that prior fiscal year; "[i]nstead, the Board found that the appropriate method to value the subject properties was a comparison to other similarly situated estate-type residential properties."  Id. at 850.  Mr. Curley employed the sales-comparison approach to value the subject properties as a single unit in the present appeals.  
Mr. Curley selected four "country estate" properties on large estates and subject to similar restrictions on development and usage, which sold between December 2012 and December 2013, as comparable to the subject properties.  Mr. Curley explained that there was a limited market activity for this type of property, necessitating his consideration of other affluent Boston suburban communities beyond Sherborn.  Mr. Curley's analysis is summarized in the following table:

Address	Comparable #1
85 Hunting Lane, Sherborn	Adj.	Comparable #2
20 Pegan Lane, Dover	Adj.	Comparable #3
190 Concord Road, Weston	Adj.	Comparable #4
1437-1 Monument Street, Concord	Adj.		Sale date	12/20/2012		12/05/2013	1%	08/15/2013	3.5%	12/31/2012			Sale price	$3,200,000		$3,050,000		$4,350,000		$2,775,000			Acreage	49.6	10%	7.55		7.33		10.97			Development restricted	Yes		Yes		Yes		Yes			Living area	7,355 sf		8,763 sf		13,000 sf		13,182 sf			Includes	Guesthouse		Guesthouse		Guesthouse		Guesthouse			Year built	1960/
renovated		1910/
renovated		1999		1987			Amenities 	- Barn
- Pool
- Pond frontage		- Barn 
- Pool
- Pond		- Barn
- Pool
- Abuts conservation land		- Barn
- Pool
- Abuts conservation land			Adjusted sales price	$391.57 psf		$344.57 psf		$322.90 
psf		$210.51
psf			
These purportedly comparable properties, as adjusted by Mr. Curley, yielded a mean of $317.39 per square foot of living area and a median of $333.74 per square foot of living area.  Mr. Curley arrived at a value of $350 per square foot for the subject properties.  With a living area of 11,878 square feet, this per-square-foot value yielded an estimated value of $4,157,300, which Mr. Curley rounded down to $4,157,000, which was his opinion of the fair market value of the subject properties for the fiscal year at issue.
The assessors did not offer an appraisal.  They did, however, offer the testimony of appraiser Pam Remillard, together with numerous photographs, deeds, and property record cards for purportedly comparable properties relied upon by Mr. Curley.  Ms. Remillard opined that the subject properties were superior to Mr. Curley's purportedly comparable properties in size, elegant interior finishes, direct access to Farm Pond and location in Sherborn. 
Based on all of the evidence, the Board found that the appellant met his burden of demonstrating that the subject property was overvalued for the fiscal year at issue. In reaching this conclusion, the Board did not give weight to the 2008 sale price of the subject property, as the evidence indicated that market conditions had changed significantly in the years leading up to the relevant valuation date in these appeals.  Additionally, the evidence indicated that, in the year prior to the fiscal year at issue, the highest residential sale price in Sherborn was $3.4 million, and further that no sale in Sherborn or the neighboring and very similar community of Dover exceeded $4 million in that time period.  The Board found this to be a persuasive indication that the total assessed value of the subject properties, at just under $5.6 million, was out of line with values in the relevant market.  
The Board found that the property in evidence that was most similar to the subject properties, and thus most indicative of their fair market value, was Comparable #3.  Like the subject home, Comparable #3's home also features magnificent finishes, including dramatic floor-to-ceiling windows, a stone fireplace and a formal living room with a cathedral ceiling.  Its 13,000 square feet of living area is also closest in size to the subject properties' 11,878 square feet of living area.  The Board additionally noted that Comparable #1, although considerably smaller in living area than the subject properties, also provided persuasive evidence of value, because it shared the subject properties' desirable Sherborn location and pond frontage.  The Board did not find the sale price of Comparable #4, the Concord property, to be persuasive evidence, because the Board, in a previous appeal, had ruled that the sale price did not reflect that property's fair market value.  See Lorusso v. Assessors of Concord, Mass. ATB Findings of Fact and Reports 2016-257.   
The Board, in further analyzing Mr. Curley's comparables, also applied the familiar appraisal concept that increases in unit size generally result in decreases in per-unit value.  This concept was evident in the per-square-foot values of Mr. Curley's comparable-sale properties, with the first two smaller properties earning a higher per-square-foot sales value than the larger Comparable #3.  Weighing all of these factors, the Board arrived at an adjusted price of $370 per square foot for the subject properties, yielding a value of $4,394,860, which the Board rounded to a fair cash value of $4,400,000 for the subject properties for the fiscal year at issue.
Finally, because Sherborn separately taxes the subject properties, the Board needed to allocate the abatement.  After concluding that the abatement should be allocated on the basis of the percentage of each parcel's assessed value to the total assessment of the subject properties, the Board allocated 76% of the abated value to 134 Farm Road and 26% to 134A Farm Road.  Therefore, the Board found and ruled that the fair market value of 134 Farm Road was $3,340,000 and the fair market value of 134A Farm Road was $1,056,000 for the fiscal year at issue.  
Accordingly, the Board issued a decision for the appellant ordering an abatement of $18,422.42 for 134 Farm Road and $5,284.96 for 134A Farm Road.

OPINION
The assessors are required to assess real estate at its fair cash value as of the first day of January preceding the start of the fiscal year.  G.L. c. 59, §§ 2A and 38.  Fair cash value is defined as the price at which a willing seller and a willing buyer in a free and open market will agree if both parties 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 subject 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)).
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)). 
"[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. 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 2007-321, 400 (citing McCabe v. Chelsea, 265 Mass. 494, 496 (1929)), aff'd, 73 Mass. App. Ct. 1107 (2008).
Properties are "comparable" when they share "fundamental similarities" with the subject property, including age, location and size.  See Lattuca v. Robsham, 442 Mass. 205, 216 (2004). The appellant bears the burden of "establishing the comparability of . . . properties [used for comparison] to the subject property."  Silvestri v. Assessors of Lowell, Mass. ATB Findings of Fact and Reports 2012-926, 935.  Accord New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 470 (1981).  "[B]asic comparability is established upon considering the general character of the properties."  Id. "Once basic comparability is established, it is then necessary to make adjustments for the differences, looking primarily to the relative quality of the properties, to develop a market indicator of value."  New Boston Garden Corp., 383 Mass. at 470. 
In the present appeals, the Board found Comparable #3 to be particularly persuasive, because it was similar to the subject properties in living area size and exquisite interior finishes, as well as Comparable #1, which, like the subject properties, had a waterfront location in Sherborn. The Board further considered the well-established concept of diminishing returns, meaning that "[generally], as size increases, unit prices decrease.  Conversely, as size decreases, unit prices increase." Appraisal Institute, The Appraisal of Real Estate 212 (13th ed. 2008); see also Seto v. Assessors of Quincy, Mass. ATB Findings of Fact and Reports 2006-585, 591.  On the basis of all of its findings, the Board found and ruled that $370 was an appropriate per-square-foot value for the subject properties, yielding an indicated overall fair market value of $4,400,000 for the subject properties.  
Accordingly, the Board issued decisions for the appellant in these appeals.  Because the appellee separately assessed each parcel of the subject properties, the Board allocated the abated value based on the relationship of each parcel's assessed value to the entire assessed value.  

		
						THE APPELLATE TAX BOARD

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

A true copy,
Attest: ___________________________
			Clerk of the Board

 Additionally, the property owner could seek approval to add an 800-square-foot apartment, as allowed by Sherborn zoning by-laws, on 134A Farm Road.

ATB 2017-115