Opinion
Case No. 11-58110
02-02-2012
In re: George L. Brooks Sharon D. Brooks, Debtors.
Chapter 13
Judge Caldwell
ORDER OVERRULING OBJECTION OF TELHIO CREDIT UNION
TO CONFIRMATION OF DEBTORS' CHAPTER 13 PLAN (DOC. NO. 14)
On February 1, 2012, the Court conducted an evidentiary hearing on the above-captioned Objection filed by Telhio Credit Union. ("Creditor"). The Creditor disputes the value placed on the home by George L. and Sharon D. Brooks ("Debtors"). The Debtors assembled their Unibuilt modular home in 1997 on approximately five acres in Cardington, Ohio. The home includes a living room/kitchen, two bedrooms and bath on the first floor, and one bedroom and bath on the second floor. The basement is completely unfinished.
The Debtor, Mr. Brooks, testified that the plumbing in the second floor bathroom is no longer working, and that there is no permanent source of heating or permanent flooring on the second floor. In addition, there is no central air conditioning for the home, and there is only one window air conditioner on the first floor. The Debtor, Mr. Brooks, testified that given the condition of the second floor bathroom, no one has lived on the second floor for a significant period. He further testified that due to the lack of heat on the second floor, the drywall has retained excess moisture to the point that drywall tape will not adhere. Appraisal photos support this view.
The Court received competing appraisal testimony on behalf of the Creditor and the Debtors. Mr. James Holycross, retained by the Creditor, valued the home at $100,000.00. His valuation includes a combination of three comparable properties with an adjustment for the condition of the Debtors' home. The Debtors' appraiser, Mr. Gary Francis, also used three comparable properties, but places greater emphasis upon the habitability of the second floor, due to its unfinished and unusable state. Mr. Francis valued the home at $86,000.00, resulting in a. $14,000.00 difference between the two appraisals.
Both appraisers appeared equally qualified and capable; however, the Court finds that the Debtors' appraisal is a more accurate assessment for two reasons. First, Mr. Francis determined and reflected in his estimate, that the second floor, in its current state is not habitable. The Court has reviewed the interior photos and concurs with this assessment. Substantial drywall repairs, and/or replacement may be necessary, in addition to permanent flooring and bathroom repairs. Further, the lack of a permanent heat source on the second floor and central air conditioning, detract from the market value of the home. Second, two of Mr. Francis' comparable properties included a foreclosure and a short sale. Given the present state of the real estate market and the condition of the Debtors' home, such sales may be a more accurate reflection of values compared to traditional multiple listing sales.
For all these reasons, the Court finds and concludes that the value of the Debtors' home is $86,000.00. On this basis, the Objection to Confirmation of Telhio Credit Union, Inc. is OVERRULED.
IT IS SO ORDERED.
Copies to:
Default List
Scott W. Paris, Esq. (electronic service)