Solomon v. Multnomah County Assessor

CourtOregon Tax Court
DecidedJanuary 20, 2015
DocketTC-MD 140121N
StatusUnpublished

This text of Solomon v. Multnomah County Assessor (Solomon v. Multnomah County Assessor) is published on Counsel Stack Legal Research, covering Oregon Tax Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Solomon v. Multnomah County Assessor, (Or. Super. Ct. 2015).

Opinion

IN THE OREGON TAX COURT MAGISTRATE DIVISION Property Tax

RICHARD B. SOLOMON ) and ALYCE E. FLITCRAFT, ) ) Plaintiffs, ) TC-MD 140121N ) v. ) ) MULTNOMAH COUNTY ASSESSOR, ) ) Defendant. ) FINAL DECISION

This Final Decision incorporates without change the court’s Decision entered

December 30, 2014. The court did not receive a request for an award of costs and disbursements

within 14 days after its Decision was entered. See TCR-MD 16.

Plaintiffs appeal the exception real market value and maximum assessed value of

property identified as Account R241257 (the subject property) for the 2013-14 tax year. Trial

was held in the courtroom of the Oregon Tax Court, Salem, Oregon, on October 28, 2014. Jack

L. Orchard, Attorney at Law, appeared on behalf of Plaintiffs. Plaintiff Richard B. Solomon,

Certified Public Accountant (Solomon), and Mark Hepner, SRA (Hepner), testified on behalf of

Plaintiffs. Barry Dayton appeared on behalf of Defendant. Defendant called no witnesses at

trial. Plaintiffs’ Exhibit 1 was received without objection. Defendant’s Exhibits B, C, and D,

and its Rebuttal Exhibits E, F, and J were received without objection. Defendant’s Rebuttal

Exhibits B, C, and D were received over Plaintiffs’ objection.

I. STATEMENT OF FACTS

In his appraisal report, Hepner described the subject property as a townhouse built in

1996 in Portland’s Pearl District with three levels, a private courtyard, and a two-car garage

surmounted by a studio workspace. (Ptfs’ Ex 1 at 7-8, 20.) Solomon testified that the three

FINAL DECISION TC-MD 140121N 1 levels of the main house contained 1,750 square feet of living space, and that the studio

contained an additional 360 square feet. At trial, the parties stipulated that the 2013-14 real

market value of the subject property was $760,000, the real market value that Hepner concluded

in his report. (Id. at 4.) Defendant’s representative stated at trial that Defendant’s appraiser had

concluded a value of $759,000.

Solomon testified that Plaintiffs added an elevator to the subject property in 2012. (See

also Def’s Rebuttal Ex E). Solomon testified that the elevator is a “pneumatic vacuum elevator,”

operated by air pressure rather than by cable or piston. He testified that the elevator shaft is a 37-

inch diameter cylinder housed in the corner of the courtyard and accessible only from inside the

townhouse. (See also Def’s Rebuttal Exs F, J at 3-4.) Solomon testified that the ground-level

door to the courtyard was removed to install the elevator, necessitating use of a sliding glass door

in the bedroom for access to the courtyard and garage. He testified that the remodeling made

necessary by the elevator reduced kitchen storage space and the size of a bathroom.

Solomon testified that Plaintiffs’ total cost to install the elevator was about $255,000,

with $43,400 attributable to the cost of the elevator equipment and the remainder attributable to

building modifications required by the elevator. (See also Def’s Ex B.) He testified that the

elevator was installed solely for the benefit of his wife, whose knee ailment impeded climbing

the stairs to her pottery studio and to the upstairs bedroom. Solomon testified that he did not ride

in the elevator because its ride was bumpy and its small size reminded him of a coffin. He

testified that they installed the elevator rather than moving because they had lived at the subject

property for 14 years, knew all their neighbors, and wanted to stay there.

///

FINAL DECISION TC-MD 140121N 2 A. Plaintiffs’ Appraisal

Hepner completed an appraisal report valuing the subject property as of January 1, 2013.

(Ptfs’ Ex 1 at 3.) Hepner wrote that he relied exclusively on the sales comparison approach and

concluded the subject property’s real market value was $760,000 as of January 1, 2013. (Id. at

4.) He wrote that the cost and income approaches were not applicable for the following reasons:

“The cost approach is not considered reliable in this case and it will not be presented. The need to estimate accrued depreciation and value contribution from common elements weakens its reliability. Townhome units like the subject are seldom purchased based on their income potential. The income approach is not meaningful in the appraisal of this property * * *.”

(Id.) In his report, Hepner identified four comparable sales. (See Ptfs’ Ex 1 at 8-9.) The

comparables ranged in size from 1,850 to 2,831 square feet, and in adjusted sale price from

$659,700 to $855,100. (Id.) Hepner testified under cross-examination that his appraisal report

erroneously stated the subject property’s gross living area. A sketch in his appraisal recorded

“16” instead of “19” in three sets of wall measurements, resulting in a calculated gross living

area of the subject property that understated its actual square footage by at least 243 square feet.1

Hepner testified that the error in his calculation of the subject property’s gross living area

resulted in the adjusted sale price for the largest comparable sale being too low.

Comparable sale 2, which Hepner described in his report as the “most comparable” sale,

was the May 2012 sale of another townhouse of identical age and size to the subject property and

within the subject property’s development. (Ptfs’ Ex 1 at 8.) Solomon testified that sale 2 was

one of seven similarly designed townhouses that included the subject property. (Cf. Def’s

Rebuttal Ex J.) Its unadjusted sale price was $750,000. (Ptfs’ Ex 1 at 8.) Hepner made an

1 The square footage given in the appraisal is 1,867 square feet, which is 243 square feet less than the square footage to which Solomon testified. Recalculating the area from the building sketch would yield an understatement of 264 square feet.

FINAL DECISION TC-MD 140121N 3 upward adjustment for rising market prices and a downward adjustment to reflect that it had a

“completely finished workspace[,]” arriving at an adjusted sale price of $762,500. (Id.)

B. Plaintiffs’ Evidence of Elevator Value

Hepner wrote that the “primary function” of his appraisal was “to determine if the

installation of an elevator has resulted in an increase of value.” (Ptfs’ Ex 1 at 10.) In his

appraisal report, Hepner described the elevator as follows:

“[T]he elevator in question is a unique design using a pneumatic operating system powered by compressed air. Elevators of this type are sometimes selected for use in retrofit installations because they do not require construction of a shaft, pit, or machine room. The car is elevated between floors using a vacuum system. I have personally experienced the ride on two occasions and found it to be below expectations. The car moves slowly and the ride is jerky. In addition, this particular elevator is very small with an interior cabin dimension of just 32 [inches] and a door width of 21 [inches]. It is not large enough to comfortably accommodate a wheelchair * * *. This is a one-person elevator which cannot effectively serve a care-giver and a non-ambulatory user in the same trip.”

(Id. at 1.) Hepner testified that, in order to identify any value contribution from the

elevator, he considered two sets of “directly paired sales” and four more pairs analyzed by price

per square foot. (Ptfs’ Ex 1 at 10-12.) Hepner testified that he also considered interviews with

real estate professionals and builders and included notes from those interviews in his report. (Id.

at 12-13.)

1.

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Solomon v. Multnomah County Assessor, Counsel Stack Legal Research, https://law.counselstack.com/opinion/solomon-v-multnomah-county-assessor-ortc-2015.