On appeal from the Tax Court of New Jersey, Docket No. 8287-2006.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Lintner and Sabatino.
In this residential property tax appeal, John Kuhn Bleimaier ("appellant") seeks review of a January 9, 2007 decision of the Tax Court concerning the municipal assessment of his home in Hopewell Township ("the Township"). Although the Mercer County Board of Taxation ("the County Board") had slightly reduced the Township's assessment, the Tax Court declined to reduce it any further. The Tax Court determined that appellant had failed to overcome the presumption of correctness for municipal assessments set forth in Pantasote Co. v. City of Passaic, 100 N.J. 408 (1985). We affirm.
Appellant purchased the subject property in 1985 for $185,000. The property consists of a two-acre lot, which is a portion of a larger 66.612-acre tract, also owned by appellant, located in the Township in a residential zone at Block 20, Lot 14. The two acres contain a two-story colonial-style stone dwelling built in or about 1750. The present house includes a 32 foot by 15 foot addition that is attached to the original stone structure. The house is situated at the end of a long unpaved driveway. The property also has an 800 square foot pole barn and a 616 square foot detached garage. The remaining 64.612 acres are assessed as qualified farmland. The property is adjacent to two nonconforming sites, respectively occupied by a roofing business and an excavating company.
The residence, which appellant has occupied since he bought it twenty-two years ago, consists of seven rooms. The first floor includes a living room, kitchen, large recreation room, and a full bathroom. On the second floor, there are two bedrooms and another full bathroom. The walls are plaster and the floors are hardwood and tile. It is undisputed that the house, although continuously occupied by appellant, is in need of substantial repairs.
In 2006, the Township completed a municipal-wide revaluation. During the course of that revaluation, appellant's property was inspected and assessed at $570,600, consisting of $350,000 for the two acres of land and $220,600 for the two-story residence. In connection with the assessment, a thirty-two page report was prepared for the Township by Robert J. Edgar, SCGREA, CTA, a State-certified real estate appraiser. As part of his valuation, Edgar referred to recent comparable sales of four homes in the Township built between 1800 and 1900, making various downward and upward adjustments.
Appellant challenged the Township's assessment before the County Board. In doing so, he presented what he contended were four comparable sales of two-bedroom homes sold in the Township between 2002 and 2005. Appellant did not retain an expert. Based upon his own calculations and assumptions, relying upon his list of comparable sales, appellant requested that the land and buildings be assessed at no more than $323,999.*fn1 The County Board reduced the Township's assessment by $20,600 with respect to the improvements, leaving intact the land valuation, yielding a total revised valuation of $550,000.
Appellant subsequently filed an appeal with the Tax Court. His matter was heard on January 9, 2007. The sole witnesses were appellant and Edgar, the Township's expert appraiser. Appellant stipulated to Edgar's qualifications as an expert.
In his appraisal report, Edgar opined that the highest and best use for the subject property is residential, notwithstanding the need for repairs in appellant's house. However, Edgar took into account the disrepair of the dwelling, by making various negative adjustments to the comparable sales of the four pre-20th century homes he used in his analysis. In his expert testimony before the Tax Court, Edgar noted that it would be up to an arms-length purchaser to decide whether to keep and renovate the house or demolish it. Thus, it would be inappropriate to value the property on a land-only basis.
Edgar testified that the dimensions of the house are 2,702 square feet, measured by conventional techniques utilizing the exterior, rather than the interior, walls. Edgar applied to those dimensions a value of $222 per square foot, derived from his averaging of the adjusted square foot value of the four comparables. He acknowledged on cross-examination that his four comparables all had more than two bedrooms. Nonetheless, Edgar maintained that he had adequately taken into account the smaller nature of appellant's premises by adjusting the comparables downward based on the number of bathrooms rather than the number of bedrooms. Edgar also utilized an upward annual inflationary adjustment of twelve percent, in recognition that his comparable sales were from 2004 and earlier in 2005. Based upon his analysis, Edgar valued the subject property, as of an October 1, 2005 valuation date, at $600,000 and within a market range of $502,000 to $779,000.
Edgar opined that the comparable sales posited by appellant were not reliable because appellant had not presented sufficient information to demonstrate their similarity to the subject premises. He noted that appellant's comparables were all much smaller than the subject property, ranging from 1,080 square feet to 1,490 square feet. Additionally, two of the properties were ranch houses, which Edgar considered inappropriate to liken to appellant's two-story historic colonial home. As for the two other properties that were not ranch homes, one was only 1,080 square feet in size and situated on a parcel about one-eighth of the size of appellant's lot, while the other involved a sale occurring almost three years prior to the 2005 valuation date.
In his testimony, appellant stated that he had utilized his own interior measurements of living space because the house has considerable "dead wall" space, yielding a measurement of 2,041 square feet. Using his own comparables, appellant applied to those interior dimensions an average price per square foot of $162. Based upon those calculations and ...