2020 Ohio 3596
Ohio Ct. App.2020Background
- Hersh purchased a residential property from HUD in March 2017 for $70,400; the county fiscal officer valued it at $83,000 for tax year 2017 and Hersh sought reduction to $70,400.
- At the Cuyahoga County Board of Revision (BOR) hearing Hersh did not testify; counsel submitted listing info, a HUD settlement statement, a conveyance-fee statement, and a sale-verification questionnaire indicating broker involvement.
- The BOR found the transaction was a HUD sale and presumptively not arm’s-length, retained the $83,000 valuation, and noted no evidence the sale price reflected market value.
- The Board of Tax Appeals (BTA) affirmed, concluding Hersh failed to rebut the statutory presumption that HUD sales are not arm’s-length, citing lack of firsthand testimony, hearsay MLS listing, and absence of market data.
- Hersh appealed, arguing the BTA imposed extra requirements (e.g., substantial marketing period), that the sale was openly marketed and brokered, and that Dauch should control; the appellate court affirmed the BTA as reasonable and lawful.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the BTA unlawfully added requirements to rebut the HUD-sale presumption | Hersh: BTA demanded proof of a significant marketing period and other extra elements not required by statute/case law | County/BTA: BTA merely distinguished Schwartz; it did not impose new requirements | Court: No extra burden imposed; BTA’s comparison to Schwartz was proper |
| Whether Hersh rebutted the presumption that the HUD sale was not arm’s-length | Hersh: Documents (listing, settlement, conveyance fee, verification) and broker involvement show the sale was arm’s-length | County: Documents and counsel statements are insufficient; no firsthand witness, MLS is hearsay, and no market comparables | Court: Hersh failed to rebut the presumption; BTA reasonably upheld fiscal officer valuation |
| Whether Dauch requires a different outcome (conveyance-fee statements suffice without testimony) | Hersh: Dauch permits relying on conveyance-fee statements and documentary evidence without appearing | County: Dauch does not govern HUD/forced sales, which are presumptively non-arm’s-length | Court: Dauch is inapplicable to HUD sales; Fenco/Schwartz controlling for HUD/forced-sale presumption |
Key Cases Cited
- Schwartz v. Cuyahoga Cty. Bd. of Revision, 39 N.E.3d 1223 (Ohio 2015) (HUD/forced sales presumptively not arm’s-length but can be rebutted by evidence showing a voluntary arm’s-length transaction)
- Dauch v. Erie Cty. Bd. of Revision, 77 N.E.3d 943 (Ohio 2017) (conveyance-fee statements and related documents can support a taxpayer’s initial burden absent an appearance at the BOR)
- Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision, 936 N.E.2d 489 (Ohio 2010) (HUD sales are treated as forced sales and generally not indicative of market value)
- Terraza 8, L.L.C. v. Franklin Cty. Bd. of Revision, 83 N.E.3d 916 (Ohio 2017) (recent arm’s-length transactions are best evidence of value)
- Columbus City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision, 740 N.E.2d 276 (Ohio 2001) (appellant bears burden on appeal to BTA to prove entitlement to valuation decrease)