Opinion
No. 109,155.
2013-08-23
In the Matter of the Equalization Appeal of Kent E. & Judith C. WHITTAKER for the Year 2012 in Johnson County, Kansas.
Appeal from Court of Tax Appeals. Kent E. and Judith C. Whittaker, appellants pro se. Kathryn D. Myers, assistant county counselor, for appellee Board of County Commissioners of Johnson County, Kansas.
Appeal from Court of Tax Appeals.
Kent E. and Judith C. Whittaker, appellants pro se. Kathryn D. Myers, assistant county counselor, for appellee Board of County Commissioners of Johnson County, Kansas.
Before MALONE, C J., ATCHESON, J., and LARSON, S.J.
MEMORANDUM OPINION
PER CURIAM.
Kent E. Whittaker and Judith C. Whittaker (Whittakers or taxpayers) appeal the Court of Tax Appeals' (COTA) decision upholding Johnson County's (County) 2012 appraised value of the Whittakers' home (the subject property).
The Whittakers argue the County's valuation violates Article 11, section 1 of the Kansas Constitution (2012 Supp.) that requires the “uniform and equal basis of valuation and rate of taxation on all property subjection to taxation.” They also contend COTA erred in holding the sole issue before it was whether the County followed appropriate valuation procedures without regard to substantially disparate and unequal results reached compared to comparable properties.
The record presented to us shows the taxpayers' property is a residence located at 40 Le Mans Court in Prairie Village, Kansas. The subject property is one side of a conventional style duplex unit built in 1983 in the Corinth Downs subdivision. The home has two bedrooms, three full bathrooms, two half bathrooms, an attached garage, and a finished basement. There is 2,603 square feet of living space on the main floor and 2,065 square feet of finished space in the basement.
In 2012 the County originally valued the subject property at $806,500 relying on the sales comparison valuation approach. After an informal meeting with the Whittakers, the County lowered the valuation to $796,200.
The Whittakers appealed to the COTA Small Claims Division which affirmed the County's valuation. The matter subsequently came before the regular division of COTA.
Tracy Weaver, Johnson County Appraiser, testified for the County. Mr. Whittaker testified on behalf of the Whittakers. Weaver testified the County used the comparable sales method to determine the fair market value of the subject property. The County compared the subject property to three other duplex units in the same subdivision which had sold in 2011. The three properties which were deemed to be comparable to the subject property, had sold for between $525,000 and $785,000.
Weaver testified the County made adjustments for multiple differences between the comparable properties and the subject property. These adjustments included living space square footage, finished versus unfinished basements, the number of bathrooms, and fireplaces. Weaver's testimony and the fair market value of the subject property was listed as $806,500 and then adjusted to $796,900 which was the lowest adjusted sales price for the three comparable homes.
The County also presented a report of the 2012 final values of all houses with over 3,000 square feet of living area located on Le Mans Court in Corinth Downs. This report showed valuations ranging from $579,800 to $1,625,500, Weaver explained that because the subject property had substantial lower level finish, the value of the property is much higher than those homes without any lower level finish.
Mr. Whittaker testified on behalf of himself and his wife. He selected six properties in the vicinity of the subject property and presented a 2010, 2011, and 2012 chart showing the County's valuations had all declined for 2012 by an average of 9.34% while his and Mrs. Whittaker's property had increased by 14%. He contended there was no basis for any increase and asked COTA for a valuation of $665,000, a 5% decrease from its 2011 valuation.
Judge Lee asked Mr. Whittaker about the square footage of 38 Le Mans, the property directly attached to his. He did not know, but the County's records showed it to be 2,992 square feet of main floor living area and no lower level finish with a valuation for tax purposes of $750,200.
Ms. Weaver stated the County does not try to achieve an overall increase or decrease percentage for a certain neighborhood but tries to achieve what the property would sell for as of January 1 of the tax year. She noted that $665,000 would be similar to considerably smaller homes in the area without any lower level finish and did not fit the equity standard the County is trying to achieve.
Mr. Whittaker concluded by restating his argument that properties in an area would move in tandem which did not exist with the County's valuation.
The COTA opinion adopted the County's valuation after setting forth the facts of the property, the contentions of the parties, recognized the County's burden under K.S.A.2012 Supp. 79–1609, and concluded as follows:
“Taxpayer's evidence of relative changes in appraised values of some properties within the area is not particularly relevant, as there are many factors which may affect individual valuations from year to year, including a property's appeal history. When determining the validity of an assessment of real property for uniformity and equality in the distribution of the burdens of taxation, the essential question is whether the statutory standards for fair market value have been considered and applied by the county. See Marriott Corp. v. Board of Johnson County Comm'rs, 25 Kan.App.2d 840, 845, 972 P.2d 793 (1999). According to the evidence in this case, the statutory standards for fair market value were in fact considered and applied by the County. The County performed both the cost approach and sales comparison approach and relied upon a more conservative value of $796,200. The County considered the fact that the subject property includes over 2,000 square feet of finished basement while the comparable sales have no basement finish. Based upon the weight of the evidence presented, the Court concludes that the current valuation best reflects the fair market value of the subject property.”
After taxpayers' motion for reconsideration was denied, they have appealed raising the two issues above set forth.
The Kansas Judicial Review Act (KJRA), K.S.A.2012 Supp. 77–601 et seq. defines the scope of judicial review of state agency actions unless the agency is exempted under K.S.A. 74–2426(c). COTA orders are subject to KJRA review. K.S.A. 74–2426(c). “The burden of proving the invalidity of agency action is on the party asserting invalidity.” K.S.A. 77–621(a)(1). K.SA. 77–621(c) sets out eight standards under which the appellate court shall grant relief. As relevant to the Whittakers' argument in this case, “[t]he court shall grant relief only if it determines ... [t]he agency action ... is unconstitutional on its face or as applied.” K.SA. 77–621(c)(1).
The Whittakers first contend that COTA wrongly upheld the County's valuation of the subject property in violation of Article 11, Section 1 of the Kansas Constitution (2012 Supp.) which states: “... [T]he legislature shall provide for a uniform and equal basis of valuation and rate of taxation of all property subject to taxation.”
Pursuant to this direction, the legislature has adopted K.S.A.2012 Supp. 79–1609 which in applicable part states:
“With regard to any matter properly submitted to the court relating to the determination of valuation of residential property ... for taxation purposes, it shall be the duty of the county appraiser to initiate the production of evidence to demonstrate, by a preponderance of the evidence, the validity and correctness of such determination.... No presumption shall exist in favor of the county appraiser with respect to the validity and correctness of such determination.”
The legislature has also adopted K.S.A. 79–501 which requires that each parcel of real property be appraised for taxation purposes to determine its fair market value.
K.S.A. 79–503a defines “fair market value” as “the amount in terms of money that a well informed buyer is justified in paying and a well informed seller is justified in accepting for property in an open and competitive market, assuming that the parties are acting without undue compulsion.” K.S.A. 79–503a goes on to give a nonexhaustive list of factors for the appraiser to consider in connection with the cost of the property. The statutory factors, as relevant to this case, include: the classification of the land, the size, the location, depreciation, the cost of improvements, the sale value on the open market, zoning or other restrictions, and specifically applicable to this appeal, subsection “(k) Comparison with values of other property of known or recognized value.”
“When determining the validity of an assessment of real property for uniformity and equality in the distribution of the burdens of taxation, the essential question is whether the standards prescribed in K.S.A. 79–503a have been considered and applied by the taxing officials. [Citations omitted.]” Krueger v. Board of Woodson County Comm'rs, 31 Kan.App.2d 698, 702–03, 71 P.3d 1167,aff'd277 Kan. 486, 85 P.3d 686 (2004).
Although couched as a constitutional violation, the Whittakers' basic challenge is nothing more than an argument that COTA chose to follow the County's valuation based on the consideration of three properly adjusted 2011 comparable sales over the taxpayers' contention based on a statistics-based analysis of the changes in taxable valuations of six properties located close to the subject property.
The COTA opinion correctly limited the relevance and persuasiveness of the taxpayers' presentation when it stated: “Taxpayers' evidence of relative changes in appraised values of some properties within the area is not particularly relevant, as there are many factors which may affect individual valuations from year to year, including a property's appeal history.”
On the other hand, the County's evidence and testimony followed the requirements of K.S.A. 79–503a(k). The County adjusted the sales price of each comparable property either up or down depending on how the sold property compared to the subject property. It is clear from the County's evidence that the subject property's location, size, makeup of the house, improvements, and comparison to the comparable 2011 sales was considered and legally applied.
Simply stated, there was substantial competent evidence to support the COTA decision and COTA correctly disregarded the Whittakers' evidence as failing to show the physical characteristics of the six properties were comparable to the subject property.
On appeal, the burden is on the Whittakers to show that the County's appraisal is unconstitutional as they have claimed, K.S.A. 77–621(a)(1), and they have failed to sustain that burden.
The Whittakers' second appellate contention that it was improper and reversible error for COTA to suggest the sole issue before it was whether “the County followed appropriate procedures for valuation of taxpayer's property without regard to substantially disparate and unequal result reached compared to comparable properties” is without merit.
This argument essentially repeats with sophisticated rephrasing the contention that it was improper for COTA to rely on the County's comparable sales testimony and evidence properly given and considered over the Whittakers' statistical analysis of noncomparable properties which COTA deemed to be irrelevant to the ultimate issue of the valuation of the subject property as of January 1, 2012.
We have reviewed the record and considered all of the contentions of the taxpayers and the County. We hold COTA considered the evidence and arguments of both parties and reached a legally correct result.
Affirmed.