Summary
In Howard v. Cuyahoga Cty. Bd. of Revision, 37 Ohio St.3d 195, 197, 524 N.E.2d 887 (1988), this court reversed the BTA's decision because the BTA failed to specify whether it relied on sale-price evidence or the evidence of one of the two appraisers who testified in that case.
Summary of this case from Columbus City Sch. Bd. of Educ. v. Franklin Cnty. Bd. of RevisionOpinion
No. 86-1951
Submitted April 6, 1988 —
Decided June 22, 1988.
Taxation — Real property taxes — Valuation of property — BTA need not adopt testimony of any particular expert or witness — BTA must set forth the basis for its findings and state what evidence it considered relevant.
APPEAL from the Board of Tax Appeals, Nos. 84-A-1087 and 84-A-1088.
This cause arises from an appeal by appellant, Harry E. Howard, from valuations by the Board of Tax Appeals ("BTA") of his real property for the tax years 1982 and 1983.
The property consists of a building housing a 93,333 square-foot K-Mart discount store and two smaller stores, together containing 20,000 square feet on 10.719 acres of land in Middleburg Heights, Ohio. For each of the tax years at issue, the county auditor determined the true value to be $3,110,020. Appellee, the board of revision, after hearing appellant's complaint, rendered the same valuations. On appeal, the BTA found the value for each tax year to be $2,700,000.
Appellant's expert witness before the BTA indicated in his appraisal report that the property's value was $1,850,000 for 1982 and $2,000,000 for 1983. Appellee's expert witness testified that the value was $2,600,000 for 1982 and $2,800,000 for 1983.
The record also contains evidence indicating that the property sold in July 1984 for $1,959,000. The report of appellant's witness discussed this sale and adjusted it for favorable financing and differences in capitalization rates between the dates of valuation and the date of sale. The 1984 sale price adjusted to 1982 conditions was $1,487,000, and as adjusted to 1983 conditions was $1,710,280. The witness testified that the sale was based on rent under an existing contract which was below the economic rent. He also stated that the lessee, K-Mart, was a good tenant, which fact practically guaranteed payment. He testified further that the low contract rent alone would tend to lower the sale price, and that if the property had sold under economic rent conditions, the sale price would have been higher; but that the guaranteed payment of the low contract rent would tend to increase the sale price because the lower risk of default on the lease would produce a lower capitalization rate. The BTA, nevertheless, did not mention in its decision this 1984 sale, or an earlier sale in 1980 for $1,282,623.
This cause is now before this court upon an appeal as a matter of right.
Fred Siegel Co., L.P.A., Fred Siegel and Wayne E. Petkovic, for appellant.
John T. Corrigan, prosecuting attorney, Richard A. Wise and William J. Day, for appellees.
The principles followed by this court in reviewing the BTA's real property value determinations are stated in the syllabus in Cardinal Federal S. L. Assn. v. Bd. of Revision (1975), 44 Ohio St.2d 13, 73 O.O. 2d 83, 336 N.E.2d 433, as follows:
"2. The Board of Tax Appeals is not required to adopt the valuation fixed by any expert or witness. * * *
"3. The Board of Tax Appeals is vested with wide discretion in determining the weight to be given to evidence and the credibility of witnesses which come before the board. * * *
"4. The fair market value of property for tax purposes is a question of fact, the determination of which is primarily within the province of the taxing authorities, and this court will not disturb a decision of the Board of Tax Appeals with respect to such valuation unless it affirmatively appears from the record that such decision is unreasonable or unlawful. * * * [Citations omitted.]"
The BTA has wide latitude to weigh the evidence and determine the credibility of witnesses. It need not adopt the testimony of any particular expert or witness. The BTA's decision will not be reversed if it is supported by the record.
We do, though, have a responsibility when an appeal is brought under R.C. 5717.04. After we hear arguments and consider the record and evidence, we then decide whether the BTA's decision is reasonable and lawful. If it is, we affirm the decision; if it is not, we reverse and vacate or modify it.
In Alliance Towers, Ltd. v. Stark Cty. Bd. of Revision (1988), 37 Ohio St.3d 16, 523 N.E.2d 826, this court reversed the BTA's decision with regard to the Sunset Square property in part because the BTA did not state specific reasons for changing its decision on reconsideration. This court held that it was not enough for the BTA to state that its additional study compelled its conclusion.
In Cleveland Public Library v. Cuyahoga Cty. Budget Comm. (1986), 28 Ohio St.3d 390, 28 OBR 448, 504 N.E.2d 421, this court reversed the BTA's decision because the BTA did not set forth the basis of its findings in its decision. We observed that we could perform our duty to affirm reasonable and reverse unreasonable determination only when the BTA set forth its findings. Accord Cleveland v. Budget Comm. of Cuyahoga Cty. (1976), 47 Ohio St.2d 27, 1 O.O. 3d 17, 350 N.E.2d 924.
The BTA in the instant cause had much evidence before it, including the testimony of two appraisers and evidence concerning a recent sale. While the sale price is not necessarily the property's true value, it is an indication of that value. Ratner v. Stark Cty. Bd. of Revision (1986), 23 Ohio St.3d 59, 23 OBR 192, 491 N.E.2d 680, and (1988), 35 Ohio St.3d 26, 517 N.E.2d 915. Surprisingly, though, the BTA's valuation is $741,000 higher than the purchase price of a sale of the property that occurred after the valuation date. The BTA did not explain this discrepancy, and we are unable to understand how such a value can be found.
The witnesses' opinions on the valuation of the property were divergent. This court is unable to perform its appellate duty when it does not know which facts the BTA selected in rendering its decision. We now require it to state what evidence it considered relevant in reaching its value determinations. Accordingly, the decision of the BTA is reversed and the cause is remanded for reconsideration in conformity with this opinion.
Decision reversed and cause remanded.
MOYER, C.J., SWEENEY, HOLMES, WRIGHT and H. BROWN, JJ., concur.
LOCHER and DOUGLAS, JJ., concur in judgment only.