1. (a) Sales time frame.

   1. (1) In counties with at least fifty thousand (50,000) real property parcels, the ratio study will use:

      1. (A) One (1) year of sales for vacant and residential properties; and
      2. (B) Two (2) years of sales for commercial and industrial properties.

   2. (2) For all other counties the study will use:

      1. (A) Two (2) years of sales for vacant and residential properties; and
      2. (B) Three (3) years of sales for commercial and industrial properties.
2. (b) Audit of county submissions. The Assessment Coordination Division will compare county sales submissions against records maintained by county recorders to ensure that all warranty deeds have been timely submitted.

3. (c) Sales validation codes.

   1. (1) Counties shall assign one (1) of the following validation codes to each sale to be included on all sales submitted to the division: 00 UV Unverified sale 01 VS Valid sale 02 GO Sale to or from a government agency 03 CH Sale to or from a charitable, religious, or educational institution 04 FI Sale in which a financial institution is the buyer in lieu of foreclosure, or in which a financial institution is the seller and the property is not exposed to the open market 05 RL Sale between related parties (Ex. Family transaction, employer/employee transaction, inter-company transaction) 06 CV Sale of convenience, e.g., to correct a title defect or create a joint tenancy 07 ES Sale settling an estate 08 FS Forced sale – seller is sheriff, receiver, or court officer 09 DT Sale of doubtful title 10 TR Sale involving a trade 11 PI Sale of a partial interest in the property 12 CT Sale involving a land contract (including payoff of the contract) 13 CS Significant improvement (e.g., room addition or renovation) to a property between sale date and assessment date 14 AS Assemblage sale – purchase of an adjoining property at a premium price 15 MU Sales that fail to constitute an economic unit of multiple properties (includes bulk sales of properties to a developer or builder) 16 PP Sale involving personal property of significant but undeterminable value (see discussion in 26 CAR § 213-204(c)) 17 OF Sale involving non-market financing or other non-real estate considerations of significant but undeterminable value (see discussion in 26 CAR § 213-204(d)) 18 FD Future Development/Sale includes new dwelling to be assessed 19 MH Sale includes mobile home 20 AL Land priced as AG, not priced at market value
   2. (2) Information codes considered valid sales: 25 VA Primary parcel of a group of parcels that have sold 26 AP Additional parcels that are linked to the primary parcel

4. (d) Audit of county validation codes.

   1. (1) The division will audit a random sample of sales submitted by each revaluation county to ensure that validation codes have been correctly assigned, including:

      1. (A) Residential sales;
      2. (B) Commercial sales; and
      3. (C) Vacant sales, if available.
   2. (2) The division shall share its audit findings with the county, and the county shall have an opportunity to dispute its findings.

   3. (3) If the division determines that more than ten percent (10%) of sampled vacant, residential, or commercial sales are incorrectly coded, it shall not use validation codes submitted by the county for that property class, but rather shall:

      1. (A) Use electronic edits;
      2. (B) Select and validate a random sample of sales; or
      3. (C) Take other measures deemed appropriate to ensure a valid study.

5. (e) Sales valid for study.

   1. (1) The division shall use sales coded as 01 (VS), 00 (UV), 25 (VA), and 26 (AP) in its ratio studies.
   2. (2) If there is a disagreement between a county and the division as to the proper validation code for a sale, the division shall use the code it considers most appropriate.
   3. (3) The 01 (VS), 00 (UV), 25 (VA), and 26 (AP) sales shall be subject to electronic edits (see 26 CAR § 212-209).
6. (f) Multiple sales of the same property. If more than one (1) valid sale occurs for a property during the time frame of the study, all sales considered valid shall be used in the study.

7. (g) Multiple parcel sales.

   1. (1) Sales of multiple parcels that constitute a single economic unit should be included in the study by summing the assessments and comparing the total assessed value with the sale price.
   2. (2) Such sales should be screened in the same manner as individual parcel sales to determine whether they are legitimate representations of market value.
8. (h) New construction sales. To help ensure that vacant land sales are not compared with assessments that reflect recent improvements and to prevent the study from being disproportionately influenced by new construction, sales involving new construction (e.g., as indicated by the year built) shall not be used in the ratio study.

9. (i) Low-value properties.

   1. (1) The lowest ten percent (10%) of residential assessed values and the lowest ten percent (10%) of commercial/industrial assessed values shall be excluded from the study.
   2. (2) The lowest ten percent (10%) of vacant land assessed values or all vacant land assessed values less than or equal to four hundred dollars ($400) (two thousand dollars ($2,000) full value), whichever is higher, shall be excluded from the study.
   3. (3) These properties will be removed prior to conducting electronic edits.

10. (j) High-value commercial properties.

    1. (1) Any property that constitutes more than five percent (5%) of the total assessed value of commercial and industrial properties in a county will be excluded from the study.
    2. (2) These properties will be removed prior to electronic edits.

11. (k) Electronic edits.

    1. (1) The division may conduct statistical-based edits to filter properties with atypical features, sales prices, or assessment-to-sale ratios from the study.
    2. (2) Not more than approximately five percent (5%) of sales shall be filtered from the study based on ratio alone.

12. (l) Appraisals.

    1. (1) In order to achieve adequate sample size and representativeness for commercial and industrial properties, the division may appraise a random sample of such properties.
    2. (2) All three (3) approaches to value shall be considered.
    3. (3) The approach emphasized in a particular appraisal shall be appropriate for the type of property in question.

    4. (4) The assessor and appraisal contractor shall be afforded an opportunity to:

       1. (A) Review the appraisals; and
       2. (B) Submit information supporting different value conclusions.
    5. (5) Conflicts will be resolved by an independent third party review if different value conclusions will materially affect the outcome of the study.
    6. (6) The appraisal will serve as surrogate commercial/industrial sales in the study.
    7. (7) The division will not conduct appraisals of vacant or residential properties.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "Adopted as corrected 10/14/2008 Amended by emergency procedure 06/12/09 Amended by permanent procedure 04/26/10 Amended 07/23/2014"