23-002837.pdf
Katey Bryan, Petitioner V Township Of White Lake, Respondent · 24-003558-TT
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STATE OF MICHIGAN GRETCHEN WHITMER GOVERNOR DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS LANSING MARLON I. BROWN, DPA DIRECTOR MICHIGAN TAX TRIBUNAL · 611 W. OTTAWA ST., LANSING, MI 48933 · 517-335-9760 PO BOX 30232, LANSING, MI 48909 · Other Carriers: 2407 N. GRAND RIVER AVE., LANSING, MI 48906 Katey Bryan, MICHIGAN TAX TRIBUNAL Petitioner, SMALL CLAIMS DIVISION MTT Docket No. 23-002837 & 24-003558 v Case Type: Valuation White Lake Township, Presiding Judge Respondent. Mark Perry FINAL OPINION AND JUDGMENT ORDER SEVERING 2024 TAX YEAR AND ASSIGNING IT DOCKET NUMBER 24-003558 Location of Hearing: Telephonic Hearing Held on: May 7, 2024 Appearances on Behalf of Petitioner: Jessica Dadas-Schulze Appearances on Behalf of Respondent: Dave Hieber and Heather Charlick SUMMARY OF JUDGMENT The subject property’s true cash value (TCV), state equalized value (SEV), and taxable value (TV), for the tax year at issue, shall be as follows: Parcel Number: Y-12-14-203-021 Year TCV SEV TV 2023 $630,000 $315,000 $303,450 The 2024 tax year shall be severed and assigned a new docket number. PROCEDURAL HISTORY Petitioner was required to protest the subject property’s assessment to the Board of Review (BOR). Petitioner protested the subject property’s assessment to the 2023 March BOR. Petitioner filed a Petition with the Tribunal on July 27, 2023, and Respondent filed an Answer on August 24, 2023.
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MTT Docket No. 23-002837 & 24-003558 Page 2 of 11 The amount of the SEV or TV in dispute, as set forth in the pleadings, for all tax years at issue is within the jurisdictional limits of the Small Claims Division.1 Further, the property’s assessment for subsequent tax years is included in this proceeding.2 ISSUES AND APPLICABLE LAW The issues in this matter are: 1. Whether the subject property is assessed in excess of 50% of its TCV. “The petitioner has the burden of proof in establishing the true cash value of the property.”3 The assessment of real property in Michigan shall not exceed 50% of its TCV.4 “True cash value” means “the usual selling price . . . .”5 “True cash value” means “fair market value.”6 The Tribunal is required to make an independent determination of TCV.7 “[T]he tribunal is not bound to accept either of the parties’ theories of valuation. It may accept one theory and reject the other, it may reject both theories, or it may utilize a combination of both in arriving at its determination.”8 The Tribunal is required to select the valuation methodology that is accurate and bears a reasonable relationship to the property’s TCV.9 2. Whether the TV exceeds the amount provided by MCL 211.27a. MCL 211.27a provides that a property’s TV is the lesser of the property’s SEV or capped TV, and a property’s capped TV is, absent a transfer of ownership, determined mathematically by taking into consideration the prior tax year’s TV, statutory losses, the lesser of the rate of inflation or 5%, and statutory additions, including omitted property (i.e., property not previously assessed).10 SUMMARY OF EVIDENCE A. Petitioner’s Evidence 1 See MCL 205.762(1). 2 See MCL 205.737(5)(b). 3 MCL 205.737(3); see also Kern v Pontiac Twp, 93 Mich App 612, 620; 287 NW2d 603 (1979). 4 Michigan Const 1963, art IX, sec 3. 5 MCL 211.27(1). 6 CAF Investment Co v State Tax Comm, 392 Mich 442, 450; 221 NW2d 588 (1974). 7 See Jones & Laughlin Steel Corp v City of Warren, 193 Mich App 348; 483 NW2d 416 (1992). 8 Id. at 356. 9 See Safran Printing Co v Detroit, 88 Mich App 376; 276 NW2d 602 (1979). 10 See MCL 211.34d.
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MTT Docket No. 23-002837 & 24-003558 Page 3 of 11 Petitioner’s contentions of TCV, SEV, and TV: Parcel Number: Y-12-14-203-021 Year TCV SEV TV 2023 $580,000 $290,000 $290,000 Petitioner offered the following exhibits: 1. Evidence, filed on July 27, 2023 a. 2023 Notice of March BOR Action No exhibits were excluded from evidence. Based on the pleadings, admitted exhibits, and sworn testimony, Petitioner contends that “Petitioner appeared at the March BOR hearing and was granted a reduction in Assessed Value but no reduction in Taxable Value. Further, Petitioner believes that other comparable properties, including those recently sold and uncapped, have lower Taxable Values than Petitioner.” The Tribunal inquired at the commencement of the hearing whether Petitioner preferred to include or sever the 2024 tax year valuation, Petitioner expressed her desire to server the 2024 tax year valuation dispute. Petitioner’s representative provided testimony on the average sale price to assessment ratio for properties in the immediate Pontiac Lake neighborhood, selling between tax years 2020 and 2021, ranged between 49.7% and 86.7%, and since 2019 values had increased on an average of 4% per year. Petitioner’s representative testified that she identified, examined, and stratified the homes’ sales prices ranging from $500,000 to $900,000 confirming that the homes’ sale prices located on Lake Pontiac generally sold at a higher price point than homes without lake frontage. 2031 Drury Lane sold for $610,000 in March 2022, SEV $237,000 or 77.7% compared to the subject property’s SEV. 2290 Kingston sold for $720,000 in August 2021, the SEV was 54% of the subject property’s SEV. 8780 Arlington sold for $840,000 in June 2022, the SEV was 80.5% of the subject property’s SEV. 2734 Wabum Road sold for $599,900 and required approximately $15,000 in repairs. Based on these comparable sales in the Pontiac Lake neighborhood, Petitioner’s representative opined the TCV of the subject property is $606,000. The Tribunal inquired whether Petitioner submitted written copies of the comparable sales evidence her testimony relied upon to the Tribunal and Respondent. This information was not posted on the Tribunal’s case docket lookup system. Petitioner’s representative responded she submitted the documentary evidence and proof of service prior to the adjournment order issued by the Tribunal on January 31, 2024. The Tribunal also inquired that since Petitioner’s representative’s testimony was primarily based on comparing assessments as a percent of sale price, was Petitioner’s case one of
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MTT Docket No. 23-002837 & 24-003558 Page 4 of 11 uniformity of assessments in comparison to other residential properties in the immediate Pontiac Lake neighborhood, Petitioner’s representative responded in the affirmative. B. Respondent’s Evidence The property’s TCV, SEV and TV, as confirmed by the BOR, for the tax year at issue: Parcel Number: Y-12-14-203-021 Year TCV SEV TV 2023 $650,000 $325,000 $303,450 Respondent’s revised contentions of TCV, SEV and TV: Parcel Number: Y-12-14-203-021 Year TCV SEV TV 2023 $630,000 $315,000 $303,450 Respondent offered the following exhibits: 1. Evidence, filed on January 12, 2024 a. 2023 Valuation Report (VR) 2. Evidence, filed on March 20, 2024 a. Property Valuation Report No exhibits were excluded from evidence. Based on the pleadings, admitted exhibits, and sworn testimony, Respondent contends that, “Petitioner came to March Board of Review to appeal her assessed value. Petitioner was granted the reduction by the Board of Review and correction was made. Petitioner[‘]s taxable value falls below the assessed value, resulting in no change to taxable value.” Respondent’s representative testified that that Respondent did not receive any of Petitioner’s documentary valuation evidence and did not find it posted on the Tribunal’s case docket lookup system. Respondent’s representative requested the Tribunal confirm Petitioner’s representative contends their requested TCV is $606,000, Petitioner’s representative confirmed the requested TCV is $606,000. Petitioner’s representative also confirmed the AV and TV contention for the tax year at issue is $303,000. Respondent’s representative testified that the TV difference under contention is $450.
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MTT Docket No. 23-002837 & 24-003558 Page 5 of 11 On rebuttal, Respondent’s representative provided testimony he was not previously aware of Petitioner’s contention that there was an equalization uniformity of assessment dispute and was not prepared to defend such a claim. Respondent’s representative did testify that a uniformity appeal requires the opposing party prove Respondent’s entire residential classification is not uniformly assessed among all properties making up the entire residential class, not just a few individual properties within the classification. Respondent’s representative provided documentary valuation evidence and testified to Respondent’s valuation disclosure (VD), which included three improved comparable sales and one vacate land sale for reference purposes. The 3 improved sales are all located on Pontiac Lake with lake frontage. After adjusting the improved sales for dissimilarities compared to the subject property, the appraiser, Heather Charlick, reconciled the estimated TCV as of tax day 2023, at $630,000. The calculated AV/SEV is $315,000, and TV remains unchanged at $303,450. Based on the valuation evidence, Respondent’s representative recommends the Tribunal reduce the 2023 March BOR confirmed TCV from $650,000 to $630,000, AV to $315,000, and TV remains unchanged at $303,450. FINDINGS OF FACT The following facts were proven by a preponderance of the evidence: 1. The subject property is located at 9536 Thames Blvd in Oakland County. 2. The subject property is classified as residential. 3. The subject property land area is 0.397 acres with lake frontage of 170 feet and a 2,089 sq.ft. home. 4. Petitioner did not submit a written VD used to establish the subject property’s TCV. 5. Petitioner did not submit a properly prepared residential sales or appraisal ratio study as proof there was no uniformity of assessing in White Lake Township residential classification as claimed. 6. Respondent submitted the property record card and detailed VR in support of its mass appraisal cost, less depreciation approach TCV estimate of $688,880 and $650,000 as reduced by the 2023 March BOR. 7. Respondent did not submit its 2023 land value sales study for Table 11L Pontiac Lake in support of its $2,700/front foot land value or $283,677. 8. Respondent did not submit its 2023 economic condition factor (ECF) study for 11L Pontiac Lake in support of an ECF factor of 1.250 applied to the adjusted improved building TCV of $381,639. 9. Respondent submitted a VD including a sales comparison analysis with 3 comparable sales. a. Comparable #1, 2665 Tackels Dr., sold for $531,000 on November 5 2021. Adjustments were made for less lake footage, number of bathrooms, and garage size for an adjusted sale price of $596,500, with net and gross adjustments being 12.3%.
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MTT Docket No. 23-002837 & 24-003558 Page 6 of 11 b. Comparable #2, 8852 Tackels Dr., sold for $575,000 on May 31, 2023. Adjustments were made for less lake footage, number of bathrooms, and larger living square footage for an adjusted sale price of $633,100, with net and gross adjustments being 10.1% and 10.7%, respectively. c. Comparable #3, 2031 Drury Ln., sold for $610,000 on February 25, 2022. Adjustments were made for less lake footage, number of bathrooms, basement and basement finish, and smaller living square footage for an adjusted sale price of $655,200, with net and gross adjustments being 7.4% and 14.5%, respectively. Petitioner’s representative testified citing this comparable sale as similar to the subject property. CONCLUSIONS OF LAW The following authority and reasoned opinion supports the Tribunal’s determination: A proceeding before the Tax Tribunal is original, independent, and de novo.11 The Tribunal's factual findings are to be supported by competent, material, and substantial evidence.12 Further, “[i]t is the duty of the [T]ax [T]ribunal to select the approach which provides the most accurate valuation under the circumstances of the individual case.”13 In doing so, the Tribunal shall consider the three most common approaches to valuation - the capitalization of income approach, the sales comparison or market approach, and the cost-less-depreciation approach.14 The petitioner has “the burden of proof in establishing the TCV of the property” under MCL 205.737(3).15 The Michigan Court of Appeals stated in Alhi Dev Co v Orion Twp16 that the petitioner must prove, by the greater weight of evidence, that one or more of the assessments in question were too high based upon the Tax Tribunal’s findings as to the true cash value.” The petitioner’s burden “encompasses two separate concepts”: (1) the burden of persuasion; and (2) the burden of going forward with the evidence.17 Generally, in a valuation case, to meet the burden of going forward with the evidence, the petitioner must present evidence for the Tribunal to consider in making its independent determination of value.18 Here, Petitioner contends that the subject property is assessed at greater than 50% of its TCV and provides oral testimony citing several comparable sales in support of their contentions. 11 MCL 205.735a(2). 12 See Antisdale v City of Galesburg, 420 Mich 265, 277; 362 NW2d 632 (1984); Dow Chemical Co v Dep’t of Treasury, 185 Mich App 458, 462-463; 462 NW2d 765 (1990). 13 Antisdale at 277; citing Pantlind Hotel Co v State Tax Comm, 3 Mich App 170; 141 NW2d 699 (1966). 14 See Meadowlanes Ltd Dividend Housing Ass’n v City of Holland, 437 Mich 473, 484-485; 473 NW2d 636 (1991); Pantlind Hotel Co, 3 Mich App 170. 15 See also Kern v Pontiac Twp, 93 Mich App 612, 620; 287 NW2d 603 (1979). 16 Alhi Dev Co v Orion Twp, 110 Mich App 764, 768; 314 NW2d 479 (1981). 17 Jones & Laughlin Steel Corp v City of Warren, 193 Mich App 348, 355; 483 NW2d 416 (1992). 18 See Jones & Laughlin.
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MTT Docket No. 23-002837 & 24-003558 Page 7 of 11 Neither party raised any issue with respect to the highest and best use of the property by way of the testimony and evidence provided, and the Tribunal finds that there is no dispute that its highest and best use is continued use as residential. Prior to addressing the substantive valuation issues of this appeal, the Tribunal notes, without objection by Respondent’s representative, Petitioner’s representative expressed a desire to sever the 2024 tax year.19 Furthermore, neither party provided any relevant evidence of value for the 2024 tax year. “The Tribunal may not automatically accept a respondent's assessment, but must make its own findings of fact and arrive at a legally supportable true cash value.”20 As such, the Tribunal shall sever the 2024 tax year, assign it a new docket number, and parties will be ordered to file pleadings specific to the 2024 tax year. Cost Approach The cost approach “is particularly useful in valuing new or nearly new improvements and properties that are not frequently exchanged in the market.”21 Further, it is more useful when “a lack of market activity limits the usefulness of the sales comparison approach” and it is “especially persuasive when land value is well supported and the improvements are new or suffer only minor depreciation . . . .”22 Respondent calculated the subject property’s assessment using the mass appraisal, cost-less-depreciation approach to value, which includes market adjustments through the use of a county multiplier and an ECF. Although this approach is most applicable to newly constructed properties, such as the subject, it also requires that the land value be well supported and Respondent did not provide the land sales study and ECF analysis used in its valuation of the subject property in this case.23 Absent the land and ECF sales studies, the Tribunal finds Respondent’s mass appraisal cost, less depreciation approach is not persuasive and assigned little weight. Income Approach “In the income capitalization approach, the present value of the anticipated future benefits of property ownership is measured. . . . In direct capitalization, the relationship between one year’s income and value is reflected in either a capitalization rate or an income multiplier.”24 In this case, neither party provided an income approach, and the Tribunal finds that approach is not applicable for an owner-occupied property. Sales Comparison Approach 19 See MCL 205.737(5)(b). 20 Jones & Laughlin Steel Corp v City of Warren, 193 Mich App 348, 355; 483 NW2d 416 (1992) (Citing Pinelake Housing Cooperative v Ann Arbor, 159 Mich App 208, 220; 406 NW2d 832 (1987)); Consolidated Aluminum Corp v Richmond Twp, 88 Mich App 229, 232-233; 276 NW2d 566 (1979)). 21 Appraisal Institute: The Appraisal of Real Estate (Chicago, Appraisal Institute, 15th ed, 2020), p. 36. 22 The Appraisal of Real Estate at 530. 23 Id. 24 Id.
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MTT Docket No. 23-002837 & 24-003558 Page 8 of 11 “The sales comparison approach is most useful when a number of similar properties have recently been sold or are currently for sale in the subject property’s market.”25 Here, only Respondent submitted a sales comparison approach contained in its VD. Petitioner provided six comparable sales through oral testimony. The sales were all located nearby the subject on Pontiac Lake, and all sold within sixteen months of the relevant date of valuation, December 31, 2022. Petitioner’s representative’s testimony lacked any confirmation the cited comparable sales were adjusted for dissimilarities to the subject property. Petitioner’s representative testified based on the cited comparable sales, it was her opinion the subject property’s TCV was $606,000. Petitioner’s representative failed to demonstrate adjustments were made to their comparable sales for differences between the properties and “the comparative techniques of analysis applied in the sales comparison approach are fundamental to the valuation process.”26 Petitioner’s representative’s information on record is not sufficient to establish that the properties are sufficiently similar to the subject to properly be considered comparable, or what, if any, adjustments would be required to make the sales prices indicative of the subject’s TCV. Respondent’s appraiser provided three comparable sales, one each closing in 2021, 2022, and 2023, with no adjustment made for date of sale. It is noted that Respondent’s appraiser adjusted the comparables for dissimilarities to the subject property for land area and lake frontage, differences in number of baths, size of garage, basement area and finish, and gross square footage of living area. No explanation was provided for not adjusting for year built, condition of structures, and quality of construction. Respondent’s representative testified that they believed their comparable #2 is most similar to the subject property with net and gross adjustments of 10.1% and 10.7%, respectively. It is of similar square footage, 2,226 sq.ft., and year built in 2004 in comparison with the subject’s 2,089 sq.ft. built in 2007. It is also noted that Respondent’s comparable #3 and Petitioner’s comparable #1 are the same property, 2031 Dury Lane, however, Respondent’s appraiser arrived at different adjusted sale price of $655,200, and Petitioner did not adjust the sale price and principally relied on the unadjusted transaction sale price of $610,000. Reconciliation of Value Overall, the Tribunal finds that Respondent’s comparable sale #2 is the best evidence of value on the record. Some weight is also given to Respondent’s comparable sales #1 and #3. Giving appropriate weight to each comparable sale and consideration to the included sales in light of the foregoing discussion, noted deficiencies, and other market- based evidence on record, the Tribunal finds that the evidence on the record indicates that the subject property has a TCV of $630,000 as of tax day. SEV is set at 50% of 25 The Appraisal of Real Estate at 36. 26 Appraisal Institute, The Appraisal of Real Estate (Chicago: Appraisal Institute, 15th ed. 2020) p. 351 (emphasis added). “Comparative analysis . . . focuses on similarities and differences that affect value, called elements of comparison, which may include variations in property rights, financing terms, conditions of sale, market conditions, locational influences, and physical characteristics, among others.”
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MTT Docket No. 23-002837 & 24-003558 Page 9 of 11 TCV. The revised SEV is greater than the capped TV, and as a result, the 2023 BOR TV is confirmed. JUDGMENT IT IS ORDERED that the 2024 tax year shall be SEVERED and assigned Docket No. 24-003558. IT IS FURTHER ORDERED that Petitioner shall file a petition pertaining to the 2024 tax year within 21 days of the entry of this Order.27 The petition shall note the docket number assigned by the Tribunal for the 2024 tax year and if filed utilizing the Tribunal’s e-filing system, must be filed on the assigned 2024 docket number as a “Severed Petition.” IT IS FURTHER ORDERED that the Tribunal shall issue a Notice of Docket after receipt of Petitioner’s petition. IT IS FURTHER ORDERED that the officer charged with maintaining the assessment rolls for the tax year(s) at issue shall correct or cause the assessment rolls to be corrected to reflect the property’s TCV and TV within 20 days of entry of this Final Opinion and Judgment, subject to the processes of equalization.28 To the extent that the final level of assessment for a given year has not yet been determined and published, the assessment rolls shall be corrected once the final level is published or becomes known. IT IS FURTHER ORDERED that the officer charged with collecting or refunding the affected taxes shall collect taxes and any applicable interest or issue a refund within 28 days of entry of this Final Opinion and Judgment. If a refund is warranted, it shall include a proportionate share of any property tax administration fees paid and penalty and interest paid on delinquent taxes. The refund shall also separately indicate the amount of the taxes, fees, penalties, and interest being refunded. A sum determined by the Tribunal to have been unlawfully paid shall bear interest from the date of payment to the date of judgment, and the judgment shall bear interest to the date of its payment. A sum determined by the Tribunal to have been underpaid shall not bear interest for any time period prior to 28 days after the issuance of this Final Opinion and Judgment. Pursuant to MCL 205.737, interest shall accrue (i) after December 31, 2013, through June 30, 2016, at the rate of 4.25%, (ii) after June 30, 2016, through December 31, 2016, at the rate of 4.40%, (iii) after December 31, 2016, through June 30, 2017, at the rate of 4.50%, (iv) after June 30, 2017, through December 31, 2017, at the rate of 4.70%, (v) after December 31, 2017, through June 30, 2018, at the rate of 5.15%, (vi) after June 30, 2018, through December 31, 2018, at the rate of 5.41%, (vii) after 27 Alternatively, the petition may be downloaded from the Tribunal’s website and mailed to the Tribunal via United States Postal Service at: Michigan Tax Tribunal, PO BOX 30232, Lansing, MI 48909. The petition may also be delivered to the Tribunal via overnight carrier (UPS, FedEx, or DHL) at: Michigan Tax Tribunal, 2nd Floor MTT, 2407 N. Grand River Avenue, Lansing, MI 48933. 28 See MCL 205.755.
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MTT Docket No. 23-002837 & 24-003558 Page 10 of 11 December 31, 2018 through June 30, 2019, at the rate of 5.9%, (viii) after June 30, 2019 through December 31, 2019, at the rate of 6.39%, (ix) after December 31, 2019, through June 30, 2020, at the rate of 6.40%, (x) after June 30 2020, through December 31, 2020, at the rate of 5.63%, (xi) after December 31, 2020, through June 30, 2022, at the rate of 4.25%, (xii) after June 30, 2022, through December 31, 2022, at the rate of 4.27%, (xiii) after December 31, 2022, through June 30, 2023, at the rate of 5.65%, (xiv) after June 30, 2023, through December 31, 2023, at the rate of 8.25%, and (xv) after December 31, 2023, through June 30, 2024, at the rate of 9.30%. This Final Opinion and Judgment resolves all pending claims in this matter and closes this case. APPEAL RIGHTS If you disagree with the final decision in this case, you may file a motion for reconsideration with the Tribunal or a claim of appeal with the Michigan Court of Appeals. A motion for reconsideration must be filed with the Tribunal with the required filing fee within 21 days from the date of entry of the final decision. Because the final decision closes the case, the motion cannot be filed through the Tribunal’s web-based e-filing system; it must be filed by mail or personal service. The fee for the filing of such motions is $50.00 in the Entire Tribunal and $25.00 in the Small Claims Division, unless the Small Claims decision relates to the valuation of property and the property had a principal residence exemption of at least 50% at the time the petition was filed or the decision relates to the grant or denial of a poverty or disabled veterans exemption and, if so, there is no filing fee. You are required to serve a copy of the motion on the opposing party by mail or personal service or by email if the opposing party agrees to electronic service, and proof demonstrating that service must be submitted with the motion. Responses to motions for reconsideration are prohibited and there are no oral arguments unless otherwise ordered by the Tribunal. Alternatively, you may file a claim of appeal with the Michigan Court of Appeals. If the claim is filed within 21 days of the entry of the final decision, it is an “appeal of right.” If the claim is filed more than 21 days after the entry of the final decision, it is an “appeal by leave.” A copy of the claim of appeal must be filed with the Tribunal to certify the record on appeal. There is no certification fee. By _______________________________________ Date Entered by Tribunal:
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MTT Docket No. 23-002837 & 24-003558 Page 11 of 11 PROOF OF SERVICE I certify that a copy of the foregoing was sent on the entry date indicated above to the parties or their attorneys or authorized representatives, if any, utilizing either the mailing or email addresses on file, as provide by those parties, attorneys, or authorized representatives. By: Tribunal Clerk