Victor H. Dabah Personal Residence Trust v. Borough of Deal

Annotate this Case

NOT FOR PUBLICATION WITHOUT APPROVAL OF

THE TAX COURT COMMITTEE ON OPINIONS

 

TAX COURT OF NEW JERSEY

 



Mala Sundar R.J. Hughes Justice Complex

JUDGE P.O. Box 975

25 Market Street

Trenton, New Jersey 08625

Telephone (609) 943-4761

TeleFax: (609) 984-0805

taxcourttrenton2@judiciary.state.nj.us

June 7, 2013

BY ELECTRONIC MAIL

Michael A. Mishaan, Esq.

12 Christopher Way, Suite 200

Eatontown, New Jersey 07724


Martin M. Barger, Esq.

Reussille Law Firm, L.L.C.

149 Avenue At the Common, Suite 1

Shrewsbury, New Jersey 07702

 

Re: Victor H. Dabah Personal Residence Trust v. Borough of Deal

Block 30, Lot 15

Docket No. 010067-2012 ______________

Dear Counsel:

 

This letter constitutes the court s decision following trial in the above-captioned matter. Plaintiff contests the local property tax assessment for tax year 2012 on the above captioned property located at 41 Parker Avenue ( Subject ), in the Borough of Deal ( Borough ). The contested assessment is as follows:

Land: $2,540,000

Improvements: $ 963,300

Total: $3,503,300

 

The Chapter 123 ratio applicable to tax year 2012 was 98.88%, with an upper limit of 113.71% and a lower limit of 84.05%.

*

Both parties presented the testimony of witnesses who were qualified as experts in real estate appraisal for purposes of the action. Both experts reports were admitted into evidence without objection. Plaintiff s expert opined the value of the Subject as of the October 1, 2011 valuation date as $3,030,000 (which would reduce the $3,503,300 assessment to $2,996,064), while the Borough s expert opined the value as $3,700,000 (which would retain the assessment as is).

The court finds that the six comparable sales used by both experts are reliable indicators of the Subject s value because all are located in the Borough and their sale dates are in reasonable proximity to the assessment date. After accepting the experts adjustments which the court finds reasonable and persuasive; rejecting the adjustments made by the Plaintiff s expert for market conditions, age, partial ocean view, and bedroom count; rejecting the Borough s expert s adjustment for location and effective age; and rejecting both experts adjustment for fireplace count, the court finds the Subject s value to be $3,350,000. Since the assessed-to-true value ratio exceeds 100%, the Chapter 123 ratio reduces the assessment to $3,312,480, rounded to $3,313,000.

FACTS

The Subject is a single family home located on a lot sized 30,000 square feet ( SF ), and legally conforming in the residential R-2 zone. The zoning laws require the minimum lot size to be 18,750 SF. The site is improved with a Dutch Colonial styled house built in 1928.1 Plaintiff s expert deemed its effective age as 15 years while the Borough s expert deemed its effective age as 5-10+ years.

The Subject is located about two blocks from the beach, amongst a residential neighborhood comprising of single family detached dwellings of varying styles and ages. It has convenient access to the beach and major/local highways. The Deal Casino Club is located a few blocks from the Subject. The Plaintiff s expert testified, and the Borough s expert agreed, that the Borough is unique in that the homes are mostly summer homes, the community is closed and the homes are usually not listed for sale on the Multiple Listing Services ( MLS ). Plaintiff s expert s report also noted that the Borough is an exclusive New Jersey seashore community with ocean recreation being a major draw, where homes are very well maintained, and older homes have been upgraded and improved over the last 100 years.

The house is 2 stories with six bedrooms. According to the Plaintiff s expert, it has five full and two one-half bathrooms, which includes a full bathroom in the basement (which, per Plaintiff s expert, is used by the help ). However, the sketches of the living area in her report show four full bathrooms and one halfbathroom. The Borough s expert s report listed four full bathrooms and one half-bathroom. The property card/sketch attached to the Borough s expert s report indicates three 3-fixture baths; one 4-fixture bath; one 2-fixture bath; and one 1-fixture bath. Upon the court s post-trial request for clarification, each expert maintained their bathroom count. Given this discrepancy in a basic fact, the court will use the bathroom count as four full and one half bathrooms for purposes of adjustment. Any bathroom in the basement should be considered as an adjustment to that area as opposed to the above-grade area.

The experts also had a different measurement of the Subject s gross living area ( GLA ). The Plaintiff s expert used 5,530 SF which included the third level which she measured from the inside. The Borough s expert used 5,427 SF as measured around the exterior.2 While measuring the exterior is the preferred method, see Appraisal Institute, The Appraisal of Real Estate 237 (13th ed. 2008) (GLA as defined by federal agencies such as Fannie Mae, is the total area of finished above-grade residential space; calculated by measuring the outside perimeter of the structure and includes only finished, habitable, above-grade living space ), the Borough s expert did not dispute the minor discrepancy of 103 SF. The court will thus use 5,530 SF as the GLA which is also borne by the building sketch (with room measurements) included in Plaintiff s expert s report.

The basement is full measuring 2,483 SF. It is partially finished. According to the Borough s expert there is a summer kitchen in the basement, which Plaintiff s expert denied. Plaintiff s expert noted the finished portion to be 1,616 SF, or about 65% finished, while the Borough s expert deemed 32%, or 800 SF, to be the finished portion, which conforms to the property record card/sketch attached to her report. At the court s post-trial request for clarification, both experts maintained that their measurement/record information was correct. The Plaintiff s expert explained that 876 SF was the area that was completely unfinished, and the 1,616 SF of the finished portion included a laundry room measuring 17.6 x 11, plus two bedrooms that had a minimal finish and used by the help. For purposes of this opinion, the experts disagreement is not relevant because their adjustment in this regard was to the status, not the quantum, of finished area. Thus, the court simply finds simply that the Subject has a partially finished basement.

Yet another discrepancy was the fireplace count with Plaintiff s expert s report noting the Subject had no fireplaces, and the Borough s expert noting it had one fireplace. The property record card/sketch attached to the Borough s expert s report indicates one fireplace. Again, each expert maintained their position when asked for clarification in this regard, with Plaintiff s expert noting that the same was located in the family room. Neither expert s report contained a picture of a fireplace, nor was there a picture of the family room. Therefore, the court will disregard any adjustments for this amenity, being unable to verify the veracity of the experts description.

The home has a covered porch in the front, a deck on the sides and rear of the house, and a stone patio per the Borough s expert s report. It has two-car detached garage, a carport, and a driveway that can hold up to three to four cars.

Both experts agreed that the Subject was well maintained, had been subject to improvements/updates over the years, and was in a good condition. Both experts also agreed that the highest and best use of the Subject is its present use as a single family residential home.

CONCLUSIONS OF LAW

A. Standard of Review

Original assessments and judgments of county boards of taxation are entitled to a presumption of validity. MSGW Real Estate Fund, L.L.C. v. Borough of Mountain Lakes, 18 N.J. Tax 364, 373 (Tax 1998). Due to the strength of the presumption, a taxpayer has the burden of proving that the assessment is erroneous with evidence that must be definite, positive and certain in quality and quantity to overcome the presumption. Ibid. (citations and quotations omitted).

Oncethe presumption of correctness is overcome, the court must determine the value based on a fair preponderance of the evidence provided by both parties. Ford Motor Co. v. Township of Edison, 127 N.J.290, 312-13 (1992) (citation omitted). The the court should proceed to weigh and evaluate the evidence and decide the appeal on the merits, whether or not the defendant seeks relief against the assessment. MSGW, supra, 18 N.J. Taxat 378.

The court s independent assessment depends on the evidence before it and the data that are properly at its disposal. F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J.418, 430 (1985). The complainant continues to bears the burden of persuading the court that the judgment under review is erroneous. Ford Motor Co., supra, 127 N.J.at 314-15.

B. Valuation

Both experts used the market or comparable sales approach for their respective value conclusions. Plaintiff s expert also used the cost approach to support her value conclusion but placed most reliance on the market approach.

The sales comparison approach is generally accepted as an appropriate method of estimating value for a residence. Brown v. Borough of Glen Rock, 19 N.J Tax 366, 377 (App. Div.), certif. denied, 168 N.J. 291 (2001). The market value for the subject is derived by comparing similar properties that have recently sold, identifying appropriate units of comparison, and making adjustments to the sale prices of the comparable properties based on relevant, market-derived elements of comparison. The Appraisal of Real Estate, supra, at 301-02.

The cost approach, on the other hand, is appropriate for valuing new or relatively new construction since cost and market value are more closely related when properties are new. Id. at 382; Congoleum Corp. v. Township of Hamilton, 7 N.J. Tax 436, 443 (Tax 1985). It is also frequently applied to a proposed construction, special-purpose or specialty properties, and other properties [infrequently] exchanged . . . such as public buildings. The Appraisal of Real Estate, supra, at 382. Further, this approach is reliable where there is a lack of market activity that would render the comparable sales approach of limited usefulness. Ibid. It is usually not applicable in valuing properties with older improvements that suffer substantial depreciation, which may be difficult to estimate. Id. at 141.

Here, there was nothing to show that there was a dearth of market activity for one-family residences such that a sales comparison approach was unreliable. Further, Plaintiff s expert s report noted that she placed all weight on the latter approach as it best reflect[ed] the actions of buyers and sellers in the subject market place. Therefore, the court finds it unnecessary to examine the reliability of the cost approach in this matter.

Experts Comparable Sales

Plaintiff s expert used four comparables sales from the Borough. They were: a colonial style home located at 232 Ocean Avenue ( 232 Ocean ) to the Subject s south; a cape/ranch style home at 58 Ocean Avenue ( 58 Ocean ) located northeast of the Subject; a split level style home at 10 Milan Place ( 10 Milan ) to the Subject s south; and a colonial style home located at 18 Jerome Avenue3 ( 18 Jerome ) located northeast of the Subject. They sold for $2.9 million; $2.85 million; $2.9 million; and $2.975 million respectively. The sale dates were 4/5/2011; 5/9/2011; 12/14/2010; and 8/13/2010 respectively.

The expert inspected the exteriors of all the comparables, and the interior plus exterior of the Subject and 58 Ocean. She conceded that 232 Ocean had a non-usable designation, NU-10,4 by the Division of Taxation (for purposes of the assessment-sales ratios). She was unaware that 58 Ocean was deemed non-usable by the Division of Taxation as a corporate sale under NU-3. 5

The Borough s expert also used 10 Milan. In addition she used two other comparables located in the Borough. One was 49 Phillips Avenue ( 49 Phillips ), a ranch style home located northeast of the Subject, which sold on 1/13/2011 for $3.475 million. The other was 61 Darlington Road, an old style home to the south of the Subject which sold on 5/13/2010 for $4.32 million. She conducted a drive-by exterior inspection of the comparables. She inspected the exterior and interior of the Subject.

The court finds the sales used by both experts are credible since they were located primarily in the Borough and are not that remote in relation to the assessment date as to be unreliable. However, the weight to be accorded to each comparable will vary depending on the circumstances.

2. Experts Adjustments to the Comparable Sales

Both experts made adjustments to their comparable sales for site size, GLA, bathroom count, and amenities (garage, porch, fireplace and the like). Plaintiff s expert also made adjustments for market condition, view, bedroom count, and age, while the Borough s expert made additional adjustments for location (proximity to the beach) and effective age.

For her four comparable sales, Plaintiff s expert s gross/net adjustments were as follows:

Comparable

Gross Adj. ($)

Gross Adj. (%)

Net Adj ($$)

Net Adj (%)

232 Ocean

$486,909

16.8%

+$132,909

4.6%

58 Ocean

$641,415

22.5%

+$190,915

6.7%

10 Milan

$225,668

7.8%

+$101,002

3.5%

18 Jerome

$673,514

22.6%

-$126,291

-4.2%

 

The Borough s expert s gross/net adjustments for her three comparables were as follows:

 

Comparable

Gross Adj. ($$)

Gross Adj. (%)

Net Adj ($$)

Net Adj (%)

49 Phillips

$688,125

19.8%

+$438,125

12.6%

61 Darlington

$589,125

13.6%

+$459,125

10.6%

10 Milan

$481,250

16.6%

+$461,250

15.9%

 

The credibility of the adjustments is discussed below.

In this connection, it should be noted that in making value determinations, the Tax Court is regarded as an expert, and can adopt, reject, or adapt, all or a portion of the experts value opinions. Jersey City, Div. of Water v. Township of Parsippany-Troy Hills, 16 N.J. Tax 504, 528 (Tax 1997), aff d, 17 N.J. Tax 538 (App. Div. 1998). Although the court must apply its own judgment to valuation data submitted by experts in order to arrive at a true value and find an assessment for the years in question, it cannot make adjustments without sufficient cognizable factual evidence in the record. Township of Warren v. Suffness, 225 N.J. Super. 399, 413-14 (App. Div.) (citations omitted), certif. denied, 113 N.J. 640 (1988). Nor can it arbitrarily assign a value to the property not supported in the record. U.S. Life Realty Corp. v. Township of Jackson, 9 N.J. Tax 66, 79 (Tax 1987). The above principles are balanced with the recognition that generally, adjustments made to comparable sales are mainly subjective in nature. Owens-Illinois Glass Co. v. Town of Bridgeton, 8 N.J. Tax 495, 512 (Tax 1986). Thus, the court is left to decide the credibility of the same.

(i) Site Size

Plaintiff s expert used $25 per SF ( PSF ) of surplus land sale value based upon recently sold sites in the Borough. She testified that she deemed the Subject as having surplus land because the land remaining after the zoning requirements (11,250 SF, which is 30, 000 SF less 18,750 SF) was insufficient to build another home. She further stated she based her analysis upon two land sales, one measuring 25,200 SF which sold for $1.3 million and another measuring about 30,000 SF which sold for $2.2 million. In addition, her general analysis under the abstraction method (taking comparables with their costs and then abstracting land values) showed that the rates were between $55 PSF (teardowns) to $75 PSF (close to the ocean) to $100 PSF (on the ocean block).

The Borough s expert used $1.5 million per acre (or $34.44 PSF, one acre consisting of 43,560 SF) based upon her analysis of two vacant land sales in the Borough and her knowledge and experience of acreage prices in the locality which ran between $1.3 million to $1.5 million in the last three years. Neither expert produced evidence of the relied upon data, nor did their reports include the same.

It may be true that generally surplus land is not as valuable. The Appraisal of Real Estate, supra, at 214 ( extra or remaining land not needed to support the land s specific use may have a different value than land area needed to support the improvement. ). However, the appraiser has to determine how much of the land is required to support the existing or ideal improvement, before deciding whether the balance is surplus, and then determine or provide a reason why the land is deemed surplus (such as, for instance, lacking necessary street access if an industrial building). Id. at 214-15. Here, Plaintiff s expert s basis for surplusage is simply that the lot size exceeds the minimum lot size of 18,750 SF permitted under the zoning regulations. However, and if the word minimum means that the lot size cannot exceed 18,750 SF, this does not render all land in excess of 18,750 SF as automatically surplus. Although reliance upon a lot size limitation or setbacks can impact the use of land, and thus its value, a summary conclusion that these zoning limitations (again, presuming here minimum lot size means no more than ) are the only decisive factors for determining that a certain area of land is surplus, removes any appraisal judgment or methodologies, out of the analyzing process.

Consequently, the expert s summary conclusion that the Subject has surplus land is not credible. Further, she did not balance her summary conclusion of surplus land with her own statement that the Borough is unique because land is more valuable. There is nothing to show that the land sales she had relied upon indicated one value for the Borough s minimum zoning requirements in the R-2 zone, and another value (at a lesser amount) for the balance.6 The court thus finds the Borough s expert s conclusion of $34 PSF as more credible.

(ii) GLA

Plaintiff s expert used $95 PSF and the Borough s expert used $125 PSF as an adjustment for GLA. Plaintiff s expert used the PSF improvement costs from the Marshall and Swift handbook which for the dwelling was $107.35, and deducted 20% for depreciation, thus, arriving at $95. The Borough s expert quantum was based upon her knowledge/experience, her discussions with realtors, and review of the njactb.org website maintained by the Monmouth County Board of Taxation.

Plaintiff s expert did not elucidate why depreciation was merited at 20% (given the Subject s age of 100+ years, and her own conclusion that its effective age is 15 years). Further, if she deemed the depreciated value determinative of the PSF value, she did not explain why she needed to provide an additional adjustment for the Subject s age vis- -vis the comparables, and whether the depreciation she afforded the improvements already accounted for the age factor. In any event, depreciation is used under the cost approach, which is not employed here. The court thus finds that $125 PSF is appropriate.7

(iii) Market Conditions

Plaintiff s expert provided a negative 2% per year based upon statistical research, a study of the Chapter 123 ratios which showed a general decline of about 2% to 3%, and a study of land sales which showed a down market of about 10% in Monmouth County. She testified that properties closer to the ocean were more valuable and thus experienced declines at much lower rates, thus, requiring lesser time adjustments. She noted that although the Borough was a unique and exclusive community, predominantly consisting of summer homes, with home owners being primarily business persons, nonetheless, the general market conditions affected the Borough like any other town as evidenced by at least one distressed sale and some foreclosures.

The Borough s expert agreed that the Borough was a closed community; residential sales in the Borough are generally not listed on the MLS; the self-contained market exposure was about one or two weeks; and sales were mostly all-cash deals. She maintained that all of these factors required a conclusion that the real estate in the Borough was unaffected by the national market conditions. She also testified that her research did not disclose any foreclosures or distressed sales, nor did she see any NU (non-usable) category to the sales in this regard. She therefore opined that the comparables did not require adjustments for time, i.e., general market conditions.

Neither expert had any supporting documentation to either their reports or their testimony. The court finds Plaintiff s expert s reliance upon Chapter 123 ratios is not per se unreasonable. See Newport Center v. City of Jersey City, 17 N.J. Tax 405, 427 (Tax 1998) (although Chapter 123 ratios are not a wholly reliable or accurate measure of real estate value trends because the ratios are influenced by changes in assessments . . . and by the nature and number of properties which sell they can nonetheless suggest a pattern of the market conditions); cf. Township of Parsippany-Troy Hills, supra, 16 N.J. Tax at 531 (use of Chapter 123 ratios as indication of the market conditions less reliable because the study of ratios [are] influenced not only by market trends in residential properties but also by trends in commercial and industrial properties and by prior years market conditions ). However, national real estate market trends are not automatic indictors of local market trends. See generally The Appraisal of Real Estate, supra, at 333 (while a recession tends to deflate all real estate prices, . . . specific submarkets may be affected differently ).

The Chapter 123 ratio for the Borough for 2010 was 93.84% and for 2011 was 91.48% thus indicating a decline of about 2.3%. This data indicates a very slight increase in residential prices. Additionally, the unadjusted sale prices of the Plaintiff s expert s comparable sales in the Borough indicate a fairly stable market in 2010 and a very slight drop in 2011 (sale of 58 Ocean Avenue). Moreover, Plaintiff s expert s report also indicated that property values in the Borough were stable, the demand/supply of real estate for the area was in balance and that although the market declined since 2007 purchasers with good credit rating were able to obtain traditional 15-30 year mortgages at favorable rates.

In light of all of this information, the court finds a 2% negative adjustment per year for declining market conditions in the Borough is not persuasive.

(iv) Location/View

Plaintiff s expert provided a -$148,750 (or -5%) adjustment for superior location for 18 Jerome, and the same amount for its partial ocean view. She testified that location was a distinct factor from view but merited equal quantum of adjustments. She also provided -5% adjustments for 232 Ocean and 58 Ocean for their partial ocean view. She testified that homes east of the Subject were more desirable and valuable being closer to the ocean. Her report noted that the -5% was derived by the market abstraction method. She did not provide any details or data in this regard. Nor did she attach any photographs showing the comparables ocean view.

The Borough s expert, noting that proximity to the beach a significant factor in value conclusions, provided a -$100,000 adjustment for location for 49 Phillips because it was 1 blocks from the ocean as compared to the Subject which was two blocks away from the ocean, but no adjustment for the other two comparables ( 61 Darlington and 10 Milan) which were also two blocks away from the beach. Her report did not explain the data source for this specific adjustment, but indicated she had relied upon certain web sources and real estate appraisal publications.

Given the testimony that the Borough is unique as a beach and ocean attraction, the court is persuaded that proximity to the beach and an ocean view are valid adjustment factors. See also The Appraisal of Real Estate, supra, at 336 (there can be a difference in a residence with a pleasant view of the park and one located two blocks away without such view, and location adjustments may be needed for . . . the value contribution of an ocean view ).

Plaintiff s expert did not explain which sales she analyzed to abstract the -5% adjustment for ocean view. Even if her own comparables were taken to indicate a market trend in this regard, the difference in the unadjusted sales prices of the three comparables with the partial ocean view and the one without (10 Milan) does not support the quantum of adjustment. 10 Milan, which is south of the Subject and has no partial ocean view, sold for the same price as 232 Ocean (which the expert deemed had such view), and for $50,000 more than 58 Ocean (which the expert deemed had such view and is located northeast of the Subject, thus more valuable per the expert). While 10 Milan did sell for $75,000 less than 18 Jerome, which is northeast of the Subject with the partial ocean view, this difference is not 5% of the sales price.8 Additionally, there are no photographs to show the ocean view. Indeed, the location map attached to Plaintiff s expert report (using Google) does not appear to support a partial ocean view for either 58 Ocean or 232 Ocean. Thus, the court is not satisfied with the credibility of the expert s negative adjustment for view.

That same location map however clearly indicates 18 Jerome s closer proximity to the ocean than any other comparable or the Subject. Accordingly, the court will allow the negative 5% adjustment for superior location for this comparable.

The Borough s expert s adjustment amount for proximity to the beach (block-wise) is also unsupported. For instance, 49 Phillips is not as close to the beach as 18 Jerome, or 58 Ocean, yet it sold for about $800,000 to $850,000 more than those comparables. Similarly, 49 Phillips is closer to the beach than 61 Darlington yet sold for $845,000 less than the latter.

In the absence of any reliable market driven data or evidence, the adjustment for view by Plaintiff s expert and for beach block location by the Borough s expert cannot be considered nor estimated by the court. Suffness, supra, 225 N.J. Super. at 414.

(v) Age/Effective Age

Plaintiff s expert provided an adjustment of $3,000 for every 10 years of age (as compared to the Subject which was built in 1928). Thus, she made an adjustment of +$6,000 for 232 Ocean (built 1903); -$6,000 for 58 Ocean (built 1940); -$9,000 for 10 Milan (built 1958); and -$15,000 for 18 Jerome (built 1973). She stated that the adjustment was purely for the chronological age of the building regardless of its upkeep or renovations, i.e., effective age, or its interior/exterior condition. She agreed that an older age does not necessarily indicate a property s inferiority because older homes are usually built sturdier and with better quality construction materials/standards.

The Borough s expert provided an adjustment for effective age of $10,000 per year, which adjustment accounted for the chronological age and rolled into the upkeeps and renovations. She stated that her personal inspection of the Subject revealed its new looks and extensive renovations as confirmed by the owner s niece, and used public records to verify the renovations of the comparables. She testified that if she observed the property to be newer looking or nicer during her drive-by inspection, she considered the property to have a younger effective age. Thus she, made positive adjustments of $100,000 for 49 Phillips (age 38; effective age 10 to 15+ years); and $200,000 for 10 Milan (age 53; effective age 20 to 25+ years). She provided no adjustments for 61 Darlington since its effective age was like the Subject s, i.e., 5 to 10+ years (though chronologically older at 102 years compared to the Subject s 83 years).

Plaintiff s expert s chronological age adjustments are not supported by objective data. Indeed, her report explicitly notes that the Borough is an exclusive New Jersey seashore community with ocean recreation being a major draw. Thus, homes are very well maintained and older homes have been upgraded and improved over the last 100 years. Her report thus does not explain her opinion that regardless of the upgrades and improvements, an age adjustment is nonetheless required.

The Borough s expert s methodology is not unreasonable. However, the basis and for and quantum of the adjustments is entirely subjective. Effective age is indicated by a building s condition and utility and is based on an appraiser s judgment and interpretation of market perceptions. The Appraisal of Real Estate, supra, at 412. Having not inspected the interiors of any comparable, nor having provided objective evidence of recent/substantive renovations (e.g., building permits), the court is hard-pressed to accept an adjustment based purely on a drive-by exterior inspection, regardless of that home s curb appeal. Therefore, the court will disregard these adjustments.

(vi) Condition

Plaintiff s expert provided an upward adjustment of $142,500 (5%) for the average condition of 58 Ocean (although the exterior MLS picture of the comparable shows an attractive, newer home). Her report noted that the quantum was supported by market abstraction and supported by the cost of the improvements. Although the expert personally inspected the interior of this comparable, her report did not include any pictures of the same.

No details were provided as to the nature or type of improvements in the comparable she considered when she compared the costs (since her cost approach only addressed the Subject s improvements, which included the GLA, basement, amenities, garage, landscaping). It is unclear whether the costs were the same regardless of the Subject s age and the comparable s age. Nonetheless, since she personally inspected the interior of the comparable, in light of her expertise, and as the quantum is not unreasonably excessive, the court will allow the adjustment.

(vii) Other Adjustments

Both appraisers made various adjustments for number of bathrooms and other amenities. They relied upon data in the tax records and based upon their familiarity with sales and properties in the Borough.

The court does not find persuasive Plaintiff s expert s additional adjustment for number of bedrooms because that would be accounted for in her adjustment to the GLA. See The Appraisal of Real Estate, supra, at 340 (adjusting for size and for extra area in an extra room should be avoided). Similarly, the court does not accept the Borough s expert +$10,000 adjustment to 10 Milan for lack of a pool. Since the Subject also lacks one, this adjustment lacks reason. The court also rejects the Borough s expert adjustment of +$25,000 for the finish status of the basement at 10 Milan because she testified that the comparable was on a slab, thus had no basement. The court accepts Plaintiff s expert s adjustments and count for the bathrooms in the comparables; basement status (except for 10 Milan which will have a +$10,000 since it has no basement); and garages ($5,000 per garage; and $3,000 per carport).

To the extent there are discrepancies in the adjustments for site size, heating/cooling and garage/carport for the commonly used comparable, 10 Milan, and the exterior photographs in this regard do not assist the court, the adjustments will be disregarded because the factual basis for the same are unproven. For the same reason, the adjustment for fireplaces will not be considered since the experts were conflicted about a non-disputable fact, namely, the existence or otherwise of a fireplace in the Subject. The court also has no credible evidence such as a photograph to establish this fact.

Subject s Value Conclusion

Based on the above analysis, the court finds the following as the adjusted sale prices for the 6 comparables as follows:9


232 Ocean

58 Ocean

10 Milan

18 Jerome

49 Phillips

61 Darlington

Sale Price

$2,900,000

$2,850,000

$2,900,000

$2,975,000

$3,475,000

$4,320,000

Sale Date

04/05/11

05/09/11

12/14/10

08/13/10

01/13/11

05/13/10

Site

+255,000

-61,200


+224,940

+255,000

+459,000

Location




-148,750



Condition


+142,500





Bathrooms

-5,000

+2,500

-15,000


-15,000

GLA

+142,750

+325,875

+174,125

+131,875

+226,000

+47,000

Basement

-5,000

+10,000

-5,000

-5,000


Garage/Carport


+3,000

+3,000

+3,000

+13,000

+13,000

Porch/Patio

+ 3,000

+3,000

+3,000

-2,000



Inground Pool





-35,000


Net Adj

+395,750

+410,675

+190,125

+189,065

+454,000

+504,000

Adjusted Price

$3,295,750

$3,260,675

$3,090,125

$3,164,065

$3,929,000

$4,824,000

 

Placing weight in accordance with the proximity of the sale dates to the assessment dates, most but equal weight to 232 Ocean and 58 Ocean, and slightly lesser weight to 49 Phillips, and then even lesser but equal weights to 10 Milan and 18 Jerome, and the least weight to 61 Darlington being the least proximate to the assessment date, the court finds the Subject s value as $3,350,000. The assessed-to-true value ratio is 104.6% requiring the application of the Chapter 123 ratio of 98.88%, providing the Subject s true value as $3,312,480, rounded to $3,313,000.

CONCLUSION

The Clerk of the Tax Court will enter a judgment reducing the assessment as follows:

Land: $2,540,000

Improvements: $ 773,000

Total: $3,313,000


Very truly yours,


Mala Sundar, J.T.C.

1 According to Plaintiff s expert s report, the Subject was purchased by Plaintiff on January 4, 2000 for $1 per the website njactb.org (maintained by the Monmouth County Board of Taxation), while the Borough s expert s report indicated that the Subject was purchased for $1 as a transfer on December 24, 2012 per the tax report.

2 A copy of the property card/sketch attached to the Borough s expert s report notes that the first story has 2,483 SF; the upper story has 1,912 SF and the half story has 1, 840 SF. This totals 6,235 SF.

3 This comparable was knocked down post-assessment date and is currently vacant land.


4 Pursuant to N.J.A.C. 18:12-1.1, the NU-10 category is for sales by a guardian, executor, trustee, or administrator.

 

5 This includes a sale between a corporation and its stockholder, its subsidiary, its affiliate or another corporation whose stock is in the same ownership. N.J.A.C. 18:12-1.1(a)(3)

6 The expert had determined a land value for the Subject as $2.25 million under her cost approach and noted that it exceeded 50% of the total value of the Subject, which was typical to the area and consistent with assessed values since land was more desirable in the Borough.

7 If the expert s value conclusion of $3,030,000 is subtracted from the land value of $2,250,000 (used by the expert in her cost approach), and the remaining $780,000 (attributable to improvements) is divided by the Subject s GLA of 5,530 SF, it provides a PSF value of about $141.

8 The adjustment quantum is also suspect if the land values testified to by Plaintiff s expert (in connection with the PSF value of land) were subtracted from the unadjusted sale prices of the comparables and 5% applied to the balance of the sales prices.

9 Unless the court has found otherwise, lack of an adjustment by an expert for an amenity feature will not be provided an adjustment by this court due to lack of evidence or data before it in this regard.