King v. Columbia County Assessor

IN THE OREGON TAX COURT

MAGISTRATE DIVISION

Property Tax

RICHARD A. KING, )

)

Plaintiff, ) TC-MD 210327N

)

v. )

)

COLUMBIA COUNTY ASSESSOR, )

)

Defendant. ) DECISION

Plaintiff appealed the assessment of property identified as Account 2970 (subject

property) for the 2020-21 tax year. A trial was held remotely on April 19, 2022. Plaintiff

appeared and testified on his own behalf. David Leader (Leader), Chief Appraiser, appeared on

behalf of Defendant. Caron J. Melville (Melville), Certified Residential Appraiser, testified on

behalf of Defendant. Plaintiff’s Exhibits 1 to 7 were received without objection. Defendant’s

Exhibit A was received over Plaintiff’s objection. 1 Following trial, Defendant filed a Statement

for Costs and Disbursements seeking to recover $1,050 associated with its appraisal expert.

I. STATEMENT OF FACTS

The subject property is a 65 by 205-foot manufactured home situated on a 13,325-square-

foot site with an outbuilding. (Def’s Ex A at 3-4.) The home was built in 2015 and contains 859

square feet of living area. (Id. at 3.) The subject property is located on the Scappoose-Vernonia

Highway, a “minor arterial.” (Ptf’s Ex 7 at 13.) Plaintiff testified that the highway speed limit is

45 miles per hour, but most cars drive faster than that. Log trucks start passing by at 4:30 a.m.

1

Plaintiff objected to the exhibit because it contained “errors.” For instance, Plaintiff disagreed with

Melville’s statement that she heard no traffic noise within the subject property. (Def’s Ex A at 3.) Plaintiff’s

objection concerns differing perceptions, which the court must weigh upon hearing witness testimony. It is not a

basis to exclude Defendant’s appraisal report from evidence.

DECISION TC-MD 210327N 1

and traffic is heavy until 8:00 a.m., then again between 4:00 p.m. and 7:00 p.m. (See also Def’s

Ex A at 3 (describing the highway as “a busy feeder street with commercial property located

across the street and residential properties immediately surrounding the subject”).) Plaintiff

testified that a scrap yard is located across the highway from the subject property and the

abutting neighbor’s yard is filled with rabbit hutches, dogs, and trash. (Ptf’s Ex 7 at 3-4, 7-9.)

Plaintiff purchased the subject property for $110,000 in November 2014. (Ptf’s Ex 5 at

3.) He testified that it was affordably priced and that appealed to him due to his fixed income.

Since purchasing the subject in 2014, Plaintiff built a new home on the site. (See id.) He

testified that the changes he made to the subject property qualify as “minor construction” and

should not have resulted in a tax increase. For the 2020-21 tax year, the subject property’s tax

roll real market value was $250,160 and its maximum assessed value was $220,030. (Ptf’s Ex

1.) Plaintiff requests that the real market value of the entire property be reduced to $160,000 and

the maximum assessed value be reduced to $98,400, noting his taxes have become unreasonable.

Defendant requests that the real market value be increased to $314,500. 2

A. Plaintiff’s Value Evidence

Plaintiff challenges the subject property’s land value, which was $171,460 for the 2020-

21 tax year. (Ptf’s Ex 1.) He submitted a list of land sales from 2019 and 2020 that he received

from Defendant, with his own descriptions and comments. (Ptf’s Ex 2 at 1.) Plaintiff testified

that a property on Maple Street was the most similar to the subject property; it sold as an 11,325-

square-foot bare lot for $64,500 on May 13, 2020, but now has a manufactured structure on it.

2

Although Plaintiff appealed only the land value of the subject property, Defendant placed the entire real

market value at issue pursuant to ORS 305.287. (See Ans, Dec 20, 2021.)

DECISION TC-MD 210327N 2

(Id. at 1-4.) Plaintiff testified that the lot had gas and sewer at the time of sale. 3 The property at

the rear of the Maple Street lot has an easement to use the driveway. Leader noted that the

Maple Street lot is 54 feet wide with a 20-foot easement, so its effectively only 34 feet wide for

purposes of building. Plaintiff responded that the subject property is also narrow (50 feet wide)

with a driveway. He testified that many of the other land sales on the list were mountain view

lots in the West Hills, which are not comparable to the subject despite being only 0.25 miles

away. (See id. at 1; Ptf’s Ex 7 at 14.) Plaintiff testified that the $125,000 price for several of the

mountain view lots supports his claim that the subject is overvalued. (Ptf’s Ex 4 at 1.)

Plaintiff also provided a list of improved sales from 2019 to 2021 that averaged $105.60

per square foot, indicating a real market value of $160,000 for the subject property. (Ptf’s Ex 3

at 1.) He received the list from an attorney to support his requested real market value. (See id.)

Leader disagreed that any of the sales listed are truly comparable to the subject property: sale 1

was in a manufactured home park; sale 2 was by quitclaim deed after foreclosure and auction;

sale 3 was not a true sale, but rather some kind of transfer back and forth between the buyer and

seller; sale 4 was a “bank-owned fixer”; and sale 5 was between relatives. 4 (See also id. at 2-11.)

Plaintiff testified that he compared the maximum assessed value with the real market

value of sales in the subject’s area from 2019 and 2020, finding the average ratio was 0.56. (See

Ptf’s Ex 4 at 2.) The subject property’s ratio is 0.79, so he requests a reduction in maximum

assessed value consistent with the ratio of those other properties. (See id.)

3

The listing states “city improvements needed to build. 29 foot wide house will fit according to city but

buyer will need to verify.” (Ptf’s Ex 2 at 4.)

4

Sale 1 is a manufactured structure located in Green Meadows Park. (Ptf’s Ex 3 at 3.) The assessment

includes improvements only, no land. (Id. at 2.) Sale 2 was foreclosed in 2019 and described as being in “fair

condition” at that time. (Id. at 5.) Repair work had begun in 2020 and was described as a “complete reno”

underway in 2021. (Id.) Defendant’s notes from 2020 indicate sale 4 had a new roof and windows, as well as a

permit for additional work indicating the home was “a rental with ‘upgrades’ to interior.” (Id. at 9.)

DECISION TC-MD 210327N 3

B. Defendant’s Value Evidence

Melville appraised the subject property as of January 1, 2020. (Def’s Ex A at 1.) She

testified that the subject property is typical for the area. The subject suffers from no adverse

conditions that impact its marketability. (See id. at 4.) Melville performed the sales comparison

and cost approaches to determine the subject property’s real market value, ultimately placing

“[a]ll weight” of her appraisal on the sales comparison approach with some support from the cost

approach. (Id. at 4-5, 9.)

1. Sales comparison approach

Melville identified four comparable sales from 2019: two located within a mile of the

subject property in Scappoose and two located over eight miles away in St. Helens. (Def’s Ex A

at 4-5.) She testified that she selected sale 2 because it had a larger site size and outbuilding like

the subject, and she selected sale 4 because it had a “rehabbed” home similar to the subject in

condition. The properties sold for prices ranging from $179,000 to $317,500. (Id.) Melville

adjusted for a variety of factors and concluded an indicated real market value of $314,500 for the

subject property. (Id. at 4.)

Plaintiff questioned why Melville did not consider the 2014 sale of the subject property

as part of her analysis. She testified in response that she typically only considers about three

years of sales history, beyond which the market has changed too much. Plaintiff questioned

whether Melville adequately accounted for the subject property’s location on a busy highway

and the related traffic noise. Melville wrote that, “[w]hile inside the subject’s dwelling, there

was no evidence of background traffic noise. The subject’s dwelling sits at the back half of the

property[,] which further limits noise and provides additional privacy.” (Def’s Ex A at 3.)

Plaintiff noted that Melville visited the subject at 1:00 p.m., which is not a high-traffic time. She

DECISION TC-MD 210327N 4

testified in response that semi-trucks run at all hours and reiterated her opinion that the set-back

location of the home and its insulation dampened traffic noise. Melville testified that her

comparable sale 1 has similar traffic influences as the subject and is located across from a sand

and gravel company, similar to the scrap yard across from the subject. (See Def’s Ex A at 4.)

She testified that sale 3 was also on a “somewhat busy” road. (See id.)

2. Cost approach

Melville also performed a cost approach using land sales, Marshall and Swift building

cost estimates, and her “knowledge of local building costs.” (Def’s Ex A at 4.) She identified

four land sales (three in 2018 and one in 2020) for prices ranging from $87,000 to $125,500, two

of which evidently had tear-down homes. 5 (Id.) Melville concluded a land value of $140,000

for the subject property. (Id.) To that, she added the depreciated cost of improvements

($150,386) and the as-is value of site improvements ($25,000) for a rounded total value of

$315,400. (Id.)

II. ANALYSIS

The issues before the court are the 2020-21 real market value and maximum assessed

value of the subject property.

As the party seeking affirmative relief, Plaintiff bears the burden of proving his claim by

a preponderance of the evidence. ORS 305.427. 6 Preponderance of the evidence means “the

greater weight of evidence, the more convincing evidence.” Feves v. Dept. of Revenue, 4 OTR

302, 312 (1971). Evidence that is inconclusive or unpersuasive is insufficient to sustain the

burden of proof. Reed v. Dept. of Rev., 310 Or 260, 265, 798 P2d 235 (1990). “[I]t is not

5

Melville’s first land sale had a house that was “demolished after purchase.” (Def’s Ex A at 4.) Her third

land sale had a “major fixer” that, presumably, did not contribute to the land value. (See id.)

6

The court’s references to the Oregon Revised Statutes (ORS) are to 2019.

DECISION TC-MD 210327N 5

enough for a taxpayer to criticize a county’s position. Taxpayers must provide competent

evidence of the [real market value] of their property.” Poddar v. Dept. of Rev., 18 OTR 324, 332

(2005). “Competent evidence includes appraisal reports and sales adjusted for time, location,

size, quality and other distinguishing differences, and testimony from licensed professionals such

as appraisers, real estate agents and licensed brokers.” Danielson v. Multnomah County

Assessor, TC–MD 110300D, 2012 WL 879285 (Or Tax M Div Mar 13, 2012). Defendant bears

the burden of proof with respect to its request to increase the subject property’s real market

value. “[T]he court has jurisdiction to determine the real market value or correct valuation on

the basis of the evidence before the court, without regard to the values pleaded by the parties.”

ORS 305.412.

A. Real Market Value

Real market value is defined as “the amount in cash that could reasonably be expected to

be paid by an informed buyer to an informed seller, each acting without compulsion in an arm’s-

length transaction occurring as of the assessment date for the tax year.” ORS 308.205(1). The

assessment date for the 2020-21 tax year was January 1, 2020. See ORS 308.007; 308.210. Real

market value must “be determined by methods and procedures in accordance with rules adopted

by the Department of Revenue.” ORS 308.205(2). To determine real market value, the

department requires consideration of three approaches to value: the cost approach; the sales

comparison approach; and the income approach. OAR 150-308-0240(2)(a). Even though all

three approaches must be considered, all three may not be applicable to the valuation of the

subject property. Id. The applicable approach to value is a question of fact determined on the

evidence presented. Pacific Power & Light Co. v. Dept. of Rev., 286 Or 529, 533, 596 P2d 912

(1979).

DECISION TC-MD 210327N 6

Plaintiff requests a reduction in the subject property’s land value. In support of that

request, he offered several unadjusted land sales. Plaintiff’s best comparable sale is the Maple

Street property, encumbered by an easement for a rear neighbor to use the driveway, a difference

that should be addressed through a market-based adjustment. 7 Most of Plaintiff’s additional

comparable sales are superior properties meant to bracket the subject below their higher values,

though Plaintiff provided relatively little information about them and made no adjustments. 8 See

OAR 150-308-0240(2)(c) (sales must be “verified to ensure they reflect arms-length market

transactions” and must be “comparable to the subject, or adjusted to be comparable”). Plaintiff’s

evidence does not meet the burden of proof.

Plaintiff also offered some evidence of the subject property’s total real market value,

specifically his 2014 purchase price and a list of comparable sales from an attorney. “[A] recent,

voluntary, arm’s length transaction between a buyer and seller, both of whom are knowledgeable

and willing, * * * while certainly not conclusive, is very persuasive of the market value.” Kem v.

Dept. of Rev., 267 Or 111, 114, 514 P2d 1335 (1973). The 2014 sale of the subject is not recent

as of the January 1, 2020, assessment date. Moreover, Plaintiff has made significant changes to

the subject since his purchase, notably adding a new manufactured structure in 2015. The list of

sales from the attorney were not adjusted for differences from the subject despite atypical market

conditions, significant work performed following sale, and the lack of land component in the first

sale. For those reasons, Plaintiff’s evidence does not support a real market value reduction.

Melville concluded that the subject property’s real market value was $314,500 based on

7

Cf Macy’s Dept Stores, Inc. v. Lane County Assessor, TC-MD 180097R, 2020 WL 406826 at *9 (Or Tax

M Div Jan 24, 2020) (“To properly analyze * * * property value, one must use properties subject to similar

restrictions[, like easements,] or make adjustments to address those issues.”).

8

For instance, Plaintiff’s exhibit does not list the site size of any lots, nor does it explain why two lots have

two different sale dates or why two lots include a sale date but no price. (Ptf’s Ex 2 at 1.)

DECISION TC-MD 210327N 7

the sales comparison approach, with support from the cost approach. Her analysis conformed to

approved appraisal techniques and supported her conclusion. Plaintiff challenged whether

Melville adequately captured the impact of the subject property’s location on a busy road, to

which Melville noted that the location of her first comparable sale was similar. Plaintiff offered

no evidence to rebut Melville’s value conclusion and the court finds that the subject property’s

2020-21 real market value was $314,500.

Plaintiff expressed outrage that Defendant may seek a higher real market value than the

tax roll. A county assessor may not appeal from a board of property tax appeals order sustaining

the tax roll value because the assessor is not aggrieved and lacks standing to appeal the board

order. See ORS 305.275(4) (permitting appeal by “[a] county assessor who is aggrieved by an

order of the county board of tax appeals” (emphasis added)); see also Bear Creek Plaza v. Dept.

of Rev., 12 OTR 272, 274 (1992) (holding that an assessor may appeal from a board order only if

it changed the value set by the assessor; otherwise, the assessor would be appealing its own

determination). However, once the question of real market value is placed before the court in a

de novo hearing, it must determine the correct real market value. See ORS 305.425 (stating tax

court proceedings are de novo); see also ORS 305.412 (quoted above). In the court’s de novo

proceeding, the county assessor may present evidence of a real market value greater than the tax

roll. Clark v. Dept. of Rev., 14 OTR 221, 223-224 (1997). The tax roll real market value is

“typically based on mass appraisal techniques. As a property tax appeal proceeds,

the property is given more individual attention and, consequently, the

determination of value becomes more refined. Because the goal of contested

proceedings is to determine the real market value of property, an assessor must be

allowed to present evidence of that value.”

Id. at 226. Although the court has found evidence to increase the real market value, it is unclear

whether the finding will have any impact on Plaintiff’s tax burden because the subject property’s

DECISION TC-MD 210327N 8

assessed value was and is based upon the maximum assessed value of $220,030. See ORS

308.146(2) (stating assessed value is lesser of real market and maximum assessed value).

B. Maximum Assessed Value

Plaintiff requests a reduction in the subject property’s maximum assessed value based on

the ratios of maximum assessed value to real market value of other properties in the area. This

court fully addressed and rejected Plaintiff’s similar claim in a prior tax year appeal. King v.

Columbia County Assessor, TC-MD 190107G, 2020 WL 5554534 (Or Tax M Div Sept 16,

2020); see also Moore v. Jackson County Assessor, TC-MD 210339N, 2022 WL 2045739 (Or

Deny Ptf’s Mot for Summ J, June 7, 2022) (rejecting Plaintiff’s equal protection challenge to

maximum assessed value based on a ratio analysis of similar properties in the same

neighborhood).

Plaintiff also challenged the subject property’s maximum assessed value alleging that it

should not have been increased for new construction because that new construction qualified as

minor improvements. See ORS 308.149(5) (defining minor construction); 308.149(6)(b)(B)

(excluding minor construction from the definition of “new property or new improvements”).

Plaintiff did not allege or offer evidence that the subject property’s 2020-21 maximum assessed

value increased by more than three percent for new improvements or any other reason. Thus,

Plaintiff’s claim relating to minor construction has no relevance to the 2020-21 tax year, which is

the only tax year under appeal. Plaintiff’s request to reduce maximum assessed value is denied. 9

///

9

Plaintiff expressed concern about his ability to pay property taxes and the court noted that Oregon

provides a homestead property tax deferral for qualifying individuals based on age or disability. See ORS 311.666

to 311.701. The court expresses no opinion whether Plaintiff and the subject property might qualify but mentioned

the program as a possible avenue for Plaintiff to seek property tax relief.

DECISION TC-MD 210327N 9

C. Costs and Disbursements.

Defendant filed a statement for costs and disbursements, seeking to recover expenses

incurred in connection with hiring a fee appraiser to prepare an appraisal report and testify at

trial. “Fees of experts such as appraisers are not allowable as costs and disbursements in the

Magistrate Division.” Harder v. Deschutes County Assessor, TC-MD 200126G, 2022 WL

714976 at *2 (Or Tax M Div Mar 10, 2022); see also ORS 305.490(4)(a)(B) (allowing tax court

judge to award expert witness fees to a prevailing taxpayer “in addition to costs and

disbursements”). Defendant’s request for costs and disbursements is denied.

III. CONCLUSION

Upon careful consideration, the court concludes that the subject property’s 2020-21 real

market value was $314,500. Plaintiff’s request to reduce the subject property’s maximum

assessed value is denied because Plaintiff has identified no legal authority supporting the request.

Defendant’s request for costs and disbursements is also denied because expert witness fees are

not recoverable as costs and disbursements. Now, therefore,

IT IS THE DECISION OF THIS COURT that the 2020-21 real market value of property

identified as Account 2970 was $314,500. Plaintiff’s appeal is denied.

IT IS FURTHER DECIDED that Defendant’s request for costs and disbursements is denied.

Dated this ____ day of June 2022.

______________________________

ALLISON R. BOOMER

PRESIDING MAGISTRATE

If you want to appeal this Decision, file a complaint in the Regular Division of

the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563;

or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.

DECISION TC-MD 210327N 10

Your complaint must be submitted within 60 days after the date of this Decision

or this Decision cannot be changed. TCR-MD 19 B.

This document was signed by Presiding Magistrate Allison R. Boomer and

entered on June 30, 2022.

DECISION TC-MD 210327N 11