Lincoln Cty. Bd. of Equal v. Western Tabor Ranch Apts.
314 Neb. 582
Neb.2023Background:
- Western Tabor purchased a 49‑unit, rent‑restricted apartment complex in 2017 for $1,340,000; property subject to long‑term rent restrictions.
- Nebraska law (§ 77‑1333) requires county assessors to use an income‑approach calculation using the prior year’s actual income/expense data for rent‑restricted projects.
- For the 2018 assessment the County Assessor received two different 2016 income/expense reports, but instead used a three‑year average (2014–2016) as its practice and assessed value at $1,519,000.
- Western Tabor did not file the required income/expense reports for 2019 and 2020; the County carried forward the 2018 income‑approach valuation ($1,519,000) for both years.
- Western Tabor protested to the county board (which affirmed the assessments); TERC reversed for 2018–2020 as arbitrary/unreasonable and adopted a 2017 private appraisal ($1,350,600) as actual value. The Board appealed.
Issues:
| Issue | Plaintiff's Argument (Western Tabor) | Defendant's Argument (Board/County) | Held |
|---|---|---|---|
| Did the County violate §77‑1333 by using multi‑year averages (2014–2016) instead of only prior‑year data for the 2018 income approach? | County failed to use the single prior‑year data required by statute; averaging was improper. | Averaging prior years is a reasonable appraisal practice when data conflict. | Court held the statute mandates use of prior‑year data only; averaging multiple years violated §77‑1333 and made the 2018 assessment arbitrary/unreasonable. |
| Was it permissible to carry forward the 2018 income‑approach valuation into 2019–2020 where the owner failed to file reports? | Carrying forward a valuation calculated in violation of §77‑1333 is not permitted; no evidence the County used a professionally accepted method for 2019–2020. | Where owners fail to file, assessor may use any professionally accepted method; carryover is reasonable. | Court held carryover compounded the §77‑1333 violation; assessor did not apply a proper §77‑112 method for 2019–2020, so those assessments were arbitrary/unreasonable. |
| Was TERC limited to using the income approach on appeal, or could it consider and adopt the private 2017 appraisal and sale price? | TERC may consider all competent evidence and substitute an appropriate valuation method on appeal. | TERC should have been limited to the income approach mandated by §77‑1333. | Court held TERC has authority to consider all evidence, substitute methods, and properly relied on the independent 2017 appraisal and sale price as competent evidence. |
Key Cases Cited
- Betty L. Green Living Trust v. Morrill Cty. Bd. of Equal., 299 Neb. 933 (discusses appellate review of TERC decisions)
- JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb. 120 (presumption that board acted upon sufficient competent evidence)
- Overbeck v. Estate of Bock, 198 Neb. 121 (appraisal of real estate is not an exact science)
- Cain v. Custer Cty. Bd. of Equal., 298 Neb. 834 (appraisal subjectivity and valuation framework)
- Brenner v. Banner Cty. Bd. of Equal., 276 Neb. 275 (burden and standard when competent contrary evidence is adduced)
- Upper Republican NRD v. Dundy Cty. Bd. of Equal., 300 Neb. 256 (TERC authority to consider valuation methods)
- US Ecology v. Boyd Cty. Bd. of Equal., 256 Neb. 7 (independent appraisal using professional standards is competent evidence)