IN THE OREGON TAX COURT MAGISTRATE DIVISION Property Tax
USMAN A. MUGHAL ) and ZAHRA S. BALOCH, ) ) Plaintiffs, ) TC-MD 180118R ) v. ) ) MULTNOMAH COUNTY ASSESSOR, ) ) Defendant. ) DECISION
Plaintiffs appealed a Real Property Order from the Multnomah County Board of Property
Tax Appeals, dated March 7, 2018, for the 2017-18 tax year, and Defendant’s real property
assessment for the 2016-17 tax year. A trial was held on February 5, 2019, in the courtroom of
the Oregon Tax Court. Usman A. Mughal (Mughal) and Zahra S. Baloch (Baloch) appeared and
testified on their own behalf. Carlos Rasch and Scott Elliott appeared on behalf of Defendant.
John James testified on behalf of Defendant.
Prior to the start of trial Defendant moved to exclude Plaintiffs’ exhibits because they
were served untimely. At the initial case management conference, the court set the trial date and
advised the parties that trial exhibits must filed with the court and served on the opposing party
and be postmarked by January 22, 2019 or hand-delivered by January 28, 2019. Those dates
were also contained the court’s trial notice. The notice further references Tax Court Rule –
Magistrate Division (TCR-MD) 12. Mughal stated that he hand-delivered Exhibits 1 to 25 to the
court on January 28, 2019, and mailed the Exhibits to Defendant on that date. Plaintiffs served
the Exhibits on Defendant after the deadline set by the court. Mughal stated that all Exhibits,
with the exception of his appraisal report, Exhibit 15, had been exchanged with Defendant
months before the exchange deadline. Consequently, Exhibit 15 was not admitted into evidence.
DECISION TC-MD 180118R 1 I. STATEMENT OF FACTS
The subject property consists of a 5-bedroom house with approximately 8,118 square feet
of gross living area on a 4.79-acre lot located in the hills just west of downtown Portland. (Ex B
at 5, 12.) The interior and exteriors incorporate top quality imported materials and include
marble flooring, solid quartz countertops in the kitchen, custom banisters, a home theater/media
room, and an extensive stone driveway with stone pillars and railings. (Ex B at 6.) The house
was approximately 60 percent complete as of January 1, 2016, and fully complete before January
1, 2017. Plaintiffs purchased the lot in 2012 for $317,000. (Ex B at 7.) Plaintiffs’ construction
worksheet shows the cost to build the home was $1,670,823. (Ex 14.)
Mughal testified that the house was built as a “dream house” inspired by Moorish
architecture he observed while traveling in Spain. Mughal testified that the subject property’s
value should be reduced for three primary reasons: 1) the land has been settling near the NE
corner causing retaining walls to sink down by several feet; 2) the roof was installed incorrectly,
is leaking, and has been estimated to cost more than $100,000 repair; and 3) the geothermal
system was installed improperly and is raising the ground by several feet. Mughal testified that
80 percent of the lot is subject to a “significant environmental concern” which severely limits the
buildable area of the lot. Additionally, a neighbor has asserted a claim for adverse possession for
a driveway on the SE corner of the lot. Mughal also testified that the subject property is on a
road with a 40 mile-per-hour speed limit and it has no city views.
Mughal acknowledged that there have been several prior appraisals of the subject
property for loan purposes, where estimates of value exceeded $2 million, but those appraisals
did not consider the above problems associated with the property. Mughal submitted estimates
to repair all the defects in the property in the range of $250,000. (Ex 19 to 23, 25.)
DECISION TC-MD 180118R 2 II. ANALYSIS
The issue for this case is the real market value of the subject property for the 2017-18 and
2016-17 tax years. “Real market value is the standard used throughout the ad valorem statutes
except for special assessments.” Richardson v. Clackamas County Assessor, TC-MD 020869D,
2003 WL 21263620 at *2 (Or Tax M Div Mar 26, 2003) (citations omitted). Real market value
is defined in ORS 308.205(1),1 which states:
“Real market value of all property, real and personal, means 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.”
The assessment dates for the 2017-18 and 2016-17 tax years are January 1, 2017 and
January 1, 2016, respectively. ORS 308.007; ORS 308.210. The real market value of property
“shall be determined by methods and procedures in accordance with rules adopted by the
Department of Revenue[.]” ORS 308.205(2). There are three approaches to value that must be
considered: (1) the cost approach; (2) the sales comparison approach; and (3) the income
approach. OAR 150-308-0240(2)(a). Although all three approaches must be considered, all
three approaches may not be applicable in a given case. Id.
The sales comparison approach “may be used to value improved properties, vacant land,
or land being considered as though vacant.” Chambers Management Corp v. Lane County
Assessor, TC-MD 060354D, 2007 WL 1068455 at *3 (Or Tax M Div Apr 3, 2007) (citations
omitted). “The court looks for arm’s length sale transactions of property similar in size, quality,
age and location” to the subject property. Richardson, 2003 WL 21263620 at *3.
“In utilizing the sales comparison approach, only actual market transactions of property comparable to the subject, or adjusted to be comparable, may be used. All transactions utilized in the sales comparison approach must be verified to
1 The court’s references to the Oregon Revised Statutes are to 2015.
DECISION TC-MD 180118R 3 ensure they reflect arms-length market transactions. When non-typical market conditions of sale are involved in a transaction (duress, death, foreclosures, interrelated corporations or persons, etc.), the transaction will not be used in the sales comparison approach unless market-based adjustments can be made for the non-typical market condition.”
OAR 150-308-0240(2)(c).
Plaintiffs bear the burden of proof and must establish their case by a preponderance of the
evidence. ORS 305.427. A “[p]reponderance of the evidence means the greater weight of
evidence, the more convincing evidence.” Feves v. Dept. of Revenue, 4 OTR 302, 312 (1971).
“[I]t is not enough for a taxpayer to criticize a county’s position. Taxpayers must provide
competent evidence of the [real market value] of their property.” Woods v. Dept. of Rev., 16
OTR 56, 59 (2002). “[I]f the evidence is inconclusive or unpersuasive, the taxpayer will have
failed to meet his burden of proof * * *.” Reed v. Dept. of Rev., 310 Or 260, 265, 798 P2d 235
(1990).
The main impediment to Plaintiffs’ case is the exclusion of their appraisal report (Ex 15)
Free access — add to your briefcase to read the full text and ask questions with AI
IN THE OREGON TAX COURT MAGISTRATE DIVISION Property Tax
USMAN A. MUGHAL ) and ZAHRA S. BALOCH, ) ) Plaintiffs, ) TC-MD 180118R ) v. ) ) MULTNOMAH COUNTY ASSESSOR, ) ) Defendant. ) DECISION
Plaintiffs appealed a Real Property Order from the Multnomah County Board of Property
Tax Appeals, dated March 7, 2018, for the 2017-18 tax year, and Defendant’s real property
assessment for the 2016-17 tax year. A trial was held on February 5, 2019, in the courtroom of
the Oregon Tax Court. Usman A. Mughal (Mughal) and Zahra S. Baloch (Baloch) appeared and
testified on their own behalf. Carlos Rasch and Scott Elliott appeared on behalf of Defendant.
John James testified on behalf of Defendant.
Prior to the start of trial Defendant moved to exclude Plaintiffs’ exhibits because they
were served untimely. At the initial case management conference, the court set the trial date and
advised the parties that trial exhibits must filed with the court and served on the opposing party
and be postmarked by January 22, 2019 or hand-delivered by January 28, 2019. Those dates
were also contained the court’s trial notice. The notice further references Tax Court Rule –
Magistrate Division (TCR-MD) 12. Mughal stated that he hand-delivered Exhibits 1 to 25 to the
court on January 28, 2019, and mailed the Exhibits to Defendant on that date. Plaintiffs served
the Exhibits on Defendant after the deadline set by the court. Mughal stated that all Exhibits,
with the exception of his appraisal report, Exhibit 15, had been exchanged with Defendant
months before the exchange deadline. Consequently, Exhibit 15 was not admitted into evidence.
DECISION TC-MD 180118R 1 I. STATEMENT OF FACTS
The subject property consists of a 5-bedroom house with approximately 8,118 square feet
of gross living area on a 4.79-acre lot located in the hills just west of downtown Portland. (Ex B
at 5, 12.) The interior and exteriors incorporate top quality imported materials and include
marble flooring, solid quartz countertops in the kitchen, custom banisters, a home theater/media
room, and an extensive stone driveway with stone pillars and railings. (Ex B at 6.) The house
was approximately 60 percent complete as of January 1, 2016, and fully complete before January
1, 2017. Plaintiffs purchased the lot in 2012 for $317,000. (Ex B at 7.) Plaintiffs’ construction
worksheet shows the cost to build the home was $1,670,823. (Ex 14.)
Mughal testified that the house was built as a “dream house” inspired by Moorish
architecture he observed while traveling in Spain. Mughal testified that the subject property’s
value should be reduced for three primary reasons: 1) the land has been settling near the NE
corner causing retaining walls to sink down by several feet; 2) the roof was installed incorrectly,
is leaking, and has been estimated to cost more than $100,000 repair; and 3) the geothermal
system was installed improperly and is raising the ground by several feet. Mughal testified that
80 percent of the lot is subject to a “significant environmental concern” which severely limits the
buildable area of the lot. Additionally, a neighbor has asserted a claim for adverse possession for
a driveway on the SE corner of the lot. Mughal also testified that the subject property is on a
road with a 40 mile-per-hour speed limit and it has no city views.
Mughal acknowledged that there have been several prior appraisals of the subject
property for loan purposes, where estimates of value exceeded $2 million, but those appraisals
did not consider the above problems associated with the property. Mughal submitted estimates
to repair all the defects in the property in the range of $250,000. (Ex 19 to 23, 25.)
DECISION TC-MD 180118R 2 II. ANALYSIS
The issue for this case is the real market value of the subject property for the 2017-18 and
2016-17 tax years. “Real market value is the standard used throughout the ad valorem statutes
except for special assessments.” Richardson v. Clackamas County Assessor, TC-MD 020869D,
2003 WL 21263620 at *2 (Or Tax M Div Mar 26, 2003) (citations omitted). Real market value
is defined in ORS 308.205(1),1 which states:
“Real market value of all property, real and personal, means 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.”
The assessment dates for the 2017-18 and 2016-17 tax years are January 1, 2017 and
January 1, 2016, respectively. ORS 308.007; ORS 308.210. The real market value of property
“shall be determined by methods and procedures in accordance with rules adopted by the
Department of Revenue[.]” ORS 308.205(2). There are three approaches to value that must be
considered: (1) the cost approach; (2) the sales comparison approach; and (3) the income
approach. OAR 150-308-0240(2)(a). Although all three approaches must be considered, all
three approaches may not be applicable in a given case. Id.
The sales comparison approach “may be used to value improved properties, vacant land,
or land being considered as though vacant.” Chambers Management Corp v. Lane County
Assessor, TC-MD 060354D, 2007 WL 1068455 at *3 (Or Tax M Div Apr 3, 2007) (citations
omitted). “The court looks for arm’s length sale transactions of property similar in size, quality,
age and location” to the subject property. Richardson, 2003 WL 21263620 at *3.
“In utilizing the sales comparison approach, only actual market transactions of property comparable to the subject, or adjusted to be comparable, may be used. All transactions utilized in the sales comparison approach must be verified to
1 The court’s references to the Oregon Revised Statutes are to 2015.
DECISION TC-MD 180118R 3 ensure they reflect arms-length market transactions. When non-typical market conditions of sale are involved in a transaction (duress, death, foreclosures, interrelated corporations or persons, etc.), the transaction will not be used in the sales comparison approach unless market-based adjustments can be made for the non-typical market condition.”
OAR 150-308-0240(2)(c).
Plaintiffs bear the burden of proof and must establish their case by a preponderance of the
evidence. ORS 305.427. A “[p]reponderance of the evidence means the greater weight of
evidence, the more convincing evidence.” Feves v. Dept. of Revenue, 4 OTR 302, 312 (1971).
“[I]t is not enough for a taxpayer to criticize a county’s position. Taxpayers must provide
competent evidence of the [real market value] of their property.” Woods v. Dept. of Rev., 16
OTR 56, 59 (2002). “[I]f the evidence is inconclusive or unpersuasive, the taxpayer will have
failed to meet his burden of proof * * *.” Reed v. Dept. of Rev., 310 Or 260, 265, 798 P2d 235
(1990).
The main impediment to Plaintiffs’ case is the exclusion of their appraisal report (Ex 15)
because they did not timely exchange the report as required by Tax Court Rule – Magistrate
Division 12 C(1)(a). That rule requires “all exhibits must be either postmarked at least 14 days
before the trial date or physically received by the court and all other parties at least 10 days
before the trial date.” In this case, at the case management conference and in the court’s written
trial notice, the court informed the parties that the exhibit exchange deadlines were January 22,
2019, if mailed, or January 28, 2019, if hand-delivered. For unknown reasons, Plaintiffs mailed
the documents to Defendant on the last date to hand-deliver them—January 28, 2019. Plaintiffs
acknowledge that the appraiser who prepared the report did not appear to testify because he
“knew” it was likely the court would not admit the report. Nevertheless, Plaintiffs argue their
case should not be eviscerated for a “technical violation of the rules.” The court acknowledges
DECISION TC-MD 180118R 4 that the Magistrate Division is designed to resolve disputes “through an informal and easy to use
process.” TCR-MD (Preface). However, failure to timely exchange the most important evidence
in the case impairs the other party’s ability to prepare their witnesses and evidence for trial;
which is paramount to a fair proceeding. The Magistrate Division has consistently upheld the
exhibit exchange deadlines against taxpayers and government agencies alike. The court does not
have another good remedy at its disposal other than excluding the evidence. Plaintiffs argued
that the trial should be delayed. But considering the court’s docket and the cost to Defendant,
that remedy is neither practical nor fair.
Plaintiffs argue that their property’s value was reduced by ecological and structural
factors. Certainly, the elements highlighted by Plaintiffs may be considered in reaching a
determination of the real market value for the subject property. However, Plaintiffs have failed
to present persuasive competent evidence of the real market value of their home. The court finds
that Plaintiffs have failed to carry their burden of proof as to the value of the subject property.
Consequently, Plaintiffs will have to either accept the values as is, or appeal to the Regular
Division, and be subject to more formal procedural and evidentiary rules.
“[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. In this case Defendant presented evidence of value slightly higher than the
BOPTA value, however, in its closing argument, Defendant asked the court to sustain the
BOPTA order. The court accepts Defendant’s request.
On February 19, 2019, Plaintiffs filed a Motion to Seek Costs and Disbursements. On
February 25, 2019, Defendant filed a response. Plaintiffs filed a reply on May 6, 2019. The
Magistrate Division has discretionary authority under ORS 305.490(2) to award costs and
DECISION TC-MD 180118R 5 disbursements to the prevailing party. Wihtol I v. Dept. of Rev., 21 OTR 260, 267 (2013). In this
case, Plaintiffs were not the prevailing party and therefore an award of costs and disbursements
would be inappropriate.
III. CONCLUSION
Plaintiffs have failed to meet the burden of proof necessary to reduce the real market
value of the subject property. Now, therefore,
IT IS THE DECISION OF THIS COURT that Plaintiffs’ appeal is denied. No costs and
disbursements are awarded.
Dated this day of July 2019.
RICHARD DAVIS 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.
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 Magistrate Richard Davis and entered on July 26, 2019.
DECISION TC-MD 180118R 6