Renzo 11 LLC v. Clackamas County Assessor
TC-MD 130076D
| Or. T.C. | Dec 3, 2013Background
- Plaintiff Renzo 11, LLC appealed the 2012–13 assessed real market value of eight unimproved townhouse lots in the Yorkfield subdivision, Canby, Oregon (eight accounts). Trial occurred Sept. 11, 2013; decision finalized Dec. 3, 2013.
- Plaintiff offered broker Holcom and appraiser Harper: plaintiff purchased lots from a bank at $12,500/lot, sold some lots post-assessment for $19,000–$25,500, and relied on comparable lot sales (including bulk sales) to support a per-lot value.
- Harper used the sales-comparison approach, relying on six comparables (three single-lot sales, three bulk sales) and applied bulk-sale discounts (10% used; parties acknowledged discounts might be higher). Harper concluded $25,000/lot (or up to $27,000 with a 20% bulk adjustment).
- Defendant (Clackamas County Assessor) through appraiser Valasek rejected sales-comparison reliability and used the extraction/land-residual (cost/land abstraction) method, extracting land value from sales of four completed townhouses in the same subdivision, concluding average land value ≈ $47,000/lot.
- The court evaluated reliability of approaches, noting problems with using single-family-lot comparables for lots designed as paired townhouse parcels, limitations of small samples for extraction, and questionable applicability of extraction here because improvements represented a large portion of sale price.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper method to determine RMV of unimproved townhouse lots | Harper: sales-comparison using adjusted single-lot and bulk sales (apply bulk discount) yields market value per lot ≈ $25,000–$27,000 | Valasek: extraction/land-residual from new townhouse sales and cost data yields land value ≈ $44,000–$50,000 per lot; sales-comparison unreliable without market-supported bulk adjustments | Court: sales-comparison (adjusted for bulk purchases) is more reliable here; extraction method is unreliable given small sample and large contribution of improvements to sale prices |
| Reliability of bulk-sale adjustments | Harper: used 10% (experience-based); plaintiff argued 20% could be applied to some comps | Assessor: bulk discounts may be greater and require market support; uncertainty undermines comparables | Court: acknowledged discounts could exceed 20% but found plaintiff’s adjusted comparables and post-assessment sales bracket reasonable; adopted bulk-adjusted sales evidence as best evidence |
| Use of single-lot comparables that permit detached homes for paired townhouse lots | Plaintiff: some comparables were very similar and resulted in reasonable adjustments | Defendant: several comparables permitted detached homes and thus are not clearly comparable to lots designed for attached townhouses | Court: comparability to single-family lots was inconclusive for some comps but overall bulk-adjusted sales provided best evidence of RMV |
| Weight of post-assessment sales and contracts | Plaintiff: July 2013 sale and Nov 2013 contract (to builders) support per-lot value within range of adjusted comparables | Defendant: post-assessment transactions and contracts are less probative than extraction of contemporaneous townhouse sales | Court: post-assessment sales and contracts, together with adjusted comparables, bracketed the assessment-date value and supported plaintiff’s valuation |
Key Cases Cited
- Reed v. Dept. of Rev., 310 Or. 260 (state high court on burden and sufficiency of evidence for valuation challenges) (sets standard that inconclusive evidence is insufficient)
- Pacific Power & Light Co. v. Dept. of Rev., 286 Or. 529 (discusses valuation approach selection as a question of fact and that all applicable approaches must be considered)
Outcome: Court found plaintiff’s bulk-adjusted sales-comparison evidence the best evidence and set RMV at $30,000 per lot, total $240,000 for the eight lots.