Assessor failed to show property wasn’t the “same property” for purposes of burden-shifting rule; ratio study didn’t prove individual assessment value; appraiser erroneously used assessed values instead of sales; owners failed to use generally accepted appraisal and assessment principles to prove lower value under Indiana Code § 6-1.1-15-18. 

Reed v. Wells County Assessor, Pet. No. 90-009-11-1-5-00015 (May 28, 2013) (March 1, 2011 assessment). Because the 2011 assessment of a single-family home increased by more than five percent over its 2010 assessment, the Assessor “had the burden of proving that the . . . assessment was correct.” (Page 1, ¶ 1.)  The Indiana Board considered whether the property was the “same property” from the prior assessment date, because the PTABOA’s 2011 assessment determination accounted for the basement’s “actual finish.”   (Page 10, ¶ 32.)  But nothing accounted for an 8.85% increase to the property’s assessed value before the PTABOA applied the finish adjustment; the Assessor failed to show that the property had changed physically or that previously omitted property was now being assessed.  (Pages 10-11, ¶¶ 32-33.)  Thus, the Assessor had the burden of proof under Ind. Code § 6-1.1-15-17.2.

The Board held that “the Assessor did not offer probative evidence.” (Page 12, ¶ 34(e).) The Assessor attempted to use “his own ratio study to support” the property’s assessment, but the Board rejected this evidence. (Page 12, ¶ 34(d).)  The Board held that “ratio study statistics cannot be used to judge the level of appraisal of an individual parcel.” Id. (citing International Association of Assessing Officers Standard on Ratio Studies Version 17.03 Part 2.3).  Because the Assessor failed to defend the assessment, Homeowners were entitled to have the property’s assessment reduced to its 2010 assessed value.  (Page 15, ¶ 36.)

Homeowners failed to justify an assessment value that would have been lower than the home’s previously assessed value. (Page 15, ¶ 36.)  Their appraisers were “seriously impeached” by the Assessor. (Page 13, ¶ 35(d).)  Notably, one appraiser incorrectly used the sales comparison approach by using assessment values instead of sale prices. Id.  And a second appraiser relied in part on the first appraiser’s analysis, assuming the data to be accurate.  (Page 13-14, ¶ 35(d).)  Homeowners failed to properly apply Indiana Code § 6-1.1-15-18, which allows the taxpayer to use assessments of similar properties to prove the value of the subject property. (Page 14, ¶ 35(f).)  The Board found Homeowners’ application of the statute improper because they did “not comply with generally accepted appraisal or assessment practices.” (Page 15, ¶ 35(g).)

Homeowners justify lower value with purchase price and USPAP-compliant appraisal; Assessor fails to impeach this evidence with claims it included “short sales” and “sales out of foreclosure.”

Glenn v. Kosciusko County Assessor, Pet. No. 43-025-11-1-5-00068 (May 29, 2013) (March 1, 2011 assessment).  Homeowners proved that their lake home’s assessed value should be reduced to $160,000 from $196,000. (Page 7, ¶ 16.)  Homeowners had purchased the home less than eight months before the assessment date for $159,900. (Page 6, ¶ 15(c).)  And they offered a USPAP-compliant appraisal valuing the property at $160,000. Id. The Board observed, “A property’s sale price is often compelling evidence of its market value-in-use, as is an appraisal . . . that has been performed in accordance with USPAP.” Id.

The Board rejected the Assessor’s efforts to discredit both the sale price and the appraisal. (Page 7, ¶ 16.)  The Assessor attempted to impeach the sale price on the grounds that it was a “short sale.” (Page 6, ¶15(d).)  “Unfortunately, none of the people who characterized the sale in that way explained what they meant by the term ‘short sale.’” Id.  For its analysis, the Board assumed that the term was “being used to denote a sale where the sale price was less than existing mortgages or other liens on the property.” Id.  The Board explained:  “There may be reasons not to rely on a given short sale when estimating a property’s value . . . .  Simply characterizing a transaction as a ‘short sale’ does not automatically invalidate the sale price as a measure of the property’s market value-in-use.” (Page 6, ¶ 15(e).)  Because the Assessor simply characterized the sale as a short sale without offering additional reasons for why it should invalidate the sale price, the Board found the Assessor’s argument unpersuasive. See id.

Similarly, the Assessor attempted to impeach the appraisal because three of the five “comparable sales involved properties that were sold out of foreclosure.” (Page 6, ¶ 15(f).)  Again, the Assessor did little to explain what was meant by “out of foreclosure” and why it should invalidate the appraisal. Id. The Assessor did not adequately explain what “generally accepted appraisal principles required in the context of the particular sales at issue.” Id.  The Assessor offered evidence showing only that some of the foreclosed properties were later resold for significantly higher prices, but she did not rule out other factors, such as improvements, that could account for the increased price. Id. Consequently, the Assessor failed to rebut Homeowners’ claims that their property should be valued no higher than $160,000. (Page 7, ¶ 16.)

Property owners’ USPAP appraisal trumps Assessor’s alleged evidence of comparable sales and an outdated sale price of the subject property.

600 W. Partners, LLC et al. v. Lake County Assessor, Pet. No. 45-030-10-1-4-00001 (April 19, 2013) (March 1, 2010 assessment). Property Owners proved that their shopping center should be assessed at $1,125,000 instead of $1,662,800 as the Assessor claimed. (Page 9, ¶ 24.) To support the requested reduction, Owners offered two appraisals into evidence that each estimated that the property was worth approximately $1,125,000. (Page 7, ¶ 18.) Finding this sufficient to establish a prima facie case, the Board stated, “An appraisal performed in conformance with generally recognized appraisal principles is often enough to establish a prima facie case that a property’s assessment is incorrect.” Id. (citation omitted).

The Assessor attempted to offer evidence that the assessment was correct based on the sales of comparable properties. (Page 8, ¶ 20.) “In order to effectively use the sales comparison approach as evidence in a property assessment appeal, . . . the proponent must establish the comparability of the properties being examined.” Id. Statements that are conclusory will not be sufficient. Id. (citation omitted).  The proponent must actually “identify the characteristics of the subject property and explain how those characteristics compare to the characteristics of the purportedly comparable properties.” Id. Here, however, the Assessor “made no attempt to show how the properties compared to the subject property and she presented nothing to explain how any differences may have affected the properties’ values.” (Page 8, ¶ 21.)

The Assessor also tried to defend the property’s assessment based on its $1.8 million sale price in October 2006 – more than three years before the 2010 assessment. (Page 9, ¶ 22.)  Because the Assessor “failed to relate the property’s 2006 purchase price to the property’s market value-in-use as of March 1, 2010, the evidence [was] insufficient to rebut the property’s appraised value.” Id.

Nick Alford