City of Columbus Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision (Slip Opinion)
148 Ohio St. 3d 700
| Ohio | 2016Background
- Metro Partners owned a 20-unit condominium building; as of the tax-lien date (Jan. 1, 2009) 16 units remained unsold and were being rented. Four units had sold in 2008.
- The county auditor valued the 16 unsold units collectively at $5,986,400 (treating them as separate condo parcels at auditor-determined values).
- Metro submitted an appraisal at the Board of Revision (BOR) treating the 16 unsold units as a single economic unit (an apartment complex) and valuing them at $2,900,000 ($180,000 per unit); the BOR adopted that valuation.
- The Columbus City Schools Board of Education appealed to the Board of Tax Appeals (BTA); the BTA rejected the appraisal, found the appraisal impermissibly treated condominium parcels as an assemblage and failed to use the cost approach, and reinstated the auditor’s valuation.
- On appeal to the Ohio Supreme Court Metro argued the BOR correctly adopted the appraisal; the Supreme Court held the BTA reasonably rejected the appraisal but remanded because the BTA should perform an independent valuation using record evidence (including four 2008 condo sale prices).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether condominium units may be valued collectively as one economic unit for tax assessment | Metro: market realities (stalled condo) justify treating unsold units as an apartment complex and valuing them collectively | BTA/BOE: R.C. 5311.11 requires each condo unit be treated as a separate taxable parcel; common ownership does not permit assemblage | Court held condo units must be valued and assessed as individual units under R.C. 5311.11; collective valuation impermissible |
| Whether BOR’s adoption of owner’s appraisal bars BTA from reinstating auditor’s value under the Bedford rule | Metro: BOR’s reduction based on owner’s evidence eclipses auditor’s value; BTA must accept BOR value absent BOE rebuttal | BOE/BTA: appraisal contains legal error (economic-unit approach) so Bedford rule does not apply | Court held Bedford rule inapplicable because BOR’s valuation rested on legal error (assemblage) |
| Whether the appraisal was reliable evidence of true value | Metro: appraiser’s income and sales-comparison approaches reflect market (absorption) and justify discount | BOE/BTA: appraiser used non-comparable apartment comparables, applied an implicit bulk discount and omitted the cost approach | Court held BTA reasonably rejected the appraisal as unreliable for tax valuation purposes |
| Whether BTA must perform independent valuation when it rejects appraisal and record contains sale data | Metro: BOE failed to present alternative valuation so BTA should have accepted BOR value | BOE/BTA: BOE did present sales evidence (four 2008 condo sales) which permits BTA to value units independently | Court held record contains sufficient evidence (four sales) to allow BTA to perform an independent valuation and remanded for that task |
Key Cases Cited
- Park Ridge Co. v. Franklin Cty. Bd. of Revision, 29 Ohio St.3d 12 (assemblage may be proper when true value depends on economic unit)
- Dublin Senior Cmty. Ltd. P’ship v. Franklin Cty. Bd. of Revision, 80 Ohio St.3d 455 (absorption theory recognized for staged sales)
- Colonial Village Ltd. v. Washington Cty. Bd. of Revision, 123 Ohio St.3d 268 (BTA may perform independent valuation when record permits)
- Dublin City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 139 Ohio St.3d 212 (R.C. 5311.11 bars treating all condo units as a single taxable parcel due to common ownership)
- Worthington City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 140 Ohio St.3d 248 (explains Bedford rule regarding BOR reductions based on owner evidence)