Title: Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d 516, 
2008-Ohio-1473.] 
 
 
CUMMINS PROPERTY SERVICES, L.L.C., APPELLEE, v. FRANKLIN COUNTY 
BOARD OF REVISION ET AL., APPELLEES; BOARD OF EDUCATION OF THE 
WORTHINGTON CITY SCHOOL DISTRICT, APPELLANT. 
[Cite as Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision,  
117 Ohio St.3d 516, 2008-Ohio-1473.] 
Taxation — Real property — Valuation — R.C. 5713.03 — Recent, arm’s-length 
sale between willing buyer and willing seller establishes true value of real 
property. 
(No. 2007-0195—Submitted December 12, 2007—Decided April 3, 2008.) 
APPEAL from the Board of Tax Appeals, No. 2005-R-591. 
__________________ 
 
CUPP, J. 
{¶ 1} In this appeal, we address whether the Board of Tax Appeals 
(“BTA”) properly applied the precepts of our decision in Berea City School Dist. 
Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 269, 2005-Ohio-
4979, 834 N.E.2d 782, when it considered and rejected various arguments against 
using a recent, arm’s-length sale price to determine the value of property for 
taxation purposes.  In this case, the property owner introduced the sale price as 
evidence of value, and the BTA accepted that price as determinative. 
{¶ 2} The Board of Education of the Worthington City School District 
(“BOE”) contends that two factors militate against regarding the sale price as 
indicative of the value of the property.  First, the BOE contends that because the 
deed contained a particular use restriction, the sale price did not relate to the full 
value of the fee simple interest in the property.  As a result, the sale price was not 
indicative of the value of the property.  Second, the owner undertook renovations 
between the date of the sale and the tax lien date, and the BOE asserts that unless 
SUPREME COURT OF OHIO 
2 
the owner proves that there was no effect on value, those renovations constitute an 
intervening improvement to the property that makes it inappropriate to use the 
sale price to determine value. 
{¶ 3} We agree with the BTA’s conclusion that the evidence in this 
record supports the propriety of using the sale price to determine value.  We 
therefore affirm. 
I 
{¶ 4} On March 30, 2004, the property owner, Cummins Property 
Services, L.L.C. (“Cummins” or “the L.L.C.”) filed its complaint against the 
auditor’s valuation of the property for tax year 2003.  The complaint sought a 
reduction from the assigned true value of $530,000 ($274,900 for the land, 
$255,100 for the building).  Cummins proposed a true value of $300,000 based on 
an allocation of the August 23, 2002 contract price of $385,000 to the parcel at 
issue.  The BOE filed a countercomplaint seeking retention of the auditor’s 
valuation. 
{¶ 5} The purchase contract on which Cummins based its claim was 
signed on April 30, 2002, and involved purchasing the fee interest in a former Star 
Bank building and grounds (parcel 610-214526) as well as an undivided one-half 
interest in an adjoining parking area (parcel 610-200937). The interest in both 
parcels formed the consideration for the purchase price in the same purchase 
agreement and was conveyed to Cummins by the same deed. The deed, which like 
the purchase contract related to both parcels, was dated August 21, 2002; among 
other things, the deed stated that “[n]o portion of the Property shall be used or 
occupied for the principal or incidental purpose of banking, financial, brokerage 
or for the operation of any automated or remote teller machine or credit union,” a 
restriction that would last for a period of 15 years from the date of the deed. 
{¶ 6} A single conveyance-fee statement was filed with the Franklin 
County auditor with respect to both parcels, and it evidenced the transfer of the 
January Term, 2008 
3 
parcels to Cummins as of August 23, 2002, in consideration of the full contract 
price for both parcels of $385,000. 
{¶ 7} Cummins apparently filed separate complaints with respect to each 
of the adjacent parcels, but only the complaint on the former bank parcel is before 
us in this appeal.  At the hearing before the Franklin County Board of Revision 
(“BOR”), Cummins presented the purchase agreement and the deed and asked 
that the BOR reduce the value of the parcel from the auditor’s value of $530,000 
to $300,000, the suggested allocation of sale price. The BOR retained the 
auditor’s valuation of the property.  Cummins then appealed to the BTA.1 
{¶ 8} At the BTA, Cummins presented the testimony of its principal, 
Robert Cummins.  Mr. Cummins testified that the L.L.C. purchased the former 
bank building after it had been on the market for approximately four years and 
offered evidence that the combined price of both the bank property and the 
interest in the adjacent parking was $385,000. On cross-examination, Mr. 
Cummins acknowledged the deed restriction and stated his view that the 
restriction did not depress the property’s value at the time of sale. Mr. Cummins 
testified that an appraisal supported the purchase price and that the appraisal had 
(Mr. Cummins was “99% sure”) taken into account the voluntary deed restriction. 
{¶ 9} Mr. Cummins also responded to questions concerning the 
renovation of the property.  The BOR’s attorney examined Mr. Cummins 
concerning building permits, but no building permits, construction documents, or 
certificates of occupancy were offered into evidence.  The attorney suggested that 
the L.L.C. had applied for permits authorizing $120,000 worth of renovation in 
the autumn of 2002, and Mr. Cummins did not deny that.  (The property record 
card reflects a $120,000 building permit as of October 2002.)  On redirect 
                                                 
1.  The BOR’s disposition of the complaint Cummins had filed with respect to the parking area is 
not part of the record of the present case.  It appears that Cummins appealed that disposition to the 
BTA, where it became case No. 2005-T-590.  It appears that that case was voluntarily dismissed.  
SUPREME COURT OF OHIO 
4 
examination, Mr. Cummins testified that the renovations involved removing the 
bank vault and adapting the space for use as a medical office.  Mr. Cummins 
testified that removing the bank vault freed up 20 to 25 percent of the interior 
space of the building for office use, but he could not remember whether the vault 
was removed before or after the tax lien date. 
{¶ 10} No evidence was presented to support the requested allocation of 
$300,000 of the $385,000 contract price to the bank parcel. 
{¶ 11} The BTA issued its decision on January 5, 2007.  Relying on Berea 
City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 
269, 2005-Ohio-4979, 834 N.E.2d 782, the BTA found that Cummins had 
presented a recent, arm’s-length sale price, that the price presumptively reflected 
the value of the property on the tax lien date, and that “the BOE did not present 
sufficient competent, probative, and reliable evidence to rebut the presumption to 
be afforded” to the sale price as an indicator of value.  Specifically, the BTA 
characterized the deed restriction as “akin to a sale-leaseback or special financing, 
which the Supreme Court has determined does not prevent the sale price from 
being competent and probative of value.”  As for the renovation to the property, 
the BTA found that “there is no reliable evidence of the extent of the change to 
the subject property as of the tax lien date.”  Moreover, the BOE “provided no 
quantification or independent evidence of the increase in value of the subject 
property because of the removal of the safe and increase in the square footage.” 
{¶ 12} In sum, the BTA regarded the sale price as probative of value and 
placed the burden of proving otherwise on the shoulders of the party advocating 
some other measure of value.  Against this holding, the BOE argues that the very 
presence of the deed restriction, and the existing state of evidence regarding 
renovation of the property, deprives the sale price of its probative force.  The 
BOE therefore urges that the sale price be disregarded and the auditor’s valuation 
restored. 
January Term, 2008 
5 
II 
{¶ 13} In Berea, we held that “when the property has been the subject of a 
recent arm’s-length sale between a willing seller and a willing buyer, the sale 
price of the property shall be ‘the true value for taxation purposes.’ ”  Berea, 106 
Ohio St.3d 269, 2005-Ohio-4979, 834 N.E.2d 782, ¶ 13, quoting R.C. 5713.03.  
At the very heart of Berea lies the rejection of appraisal evidence of the value of 
the property whenever a recent, arm’s-length sale price has been offered as 
evidence of value.2  Thus, if the BTA correctly found that the sale by which 
Cummins acquired the property constituted a recent, arm’s-length sale, it follows 
that the value equals the sale price.  Under Berea, such a sale price is deemed to 
be the value of the property, and the only rebuttal lies in challenging whether the 
elements of recency and arm’s-length character between a willing seller and a 
willing buyer are genuinely present for that particular sale. 
III 
A 
{¶ 14} The BOE contends that the existence of the deed restriction takes 
this case outside the holding of Berea.  Citing Alliance Towers, Ltd. v. Stark Cty. 
Bd. of Revision (1988), 37 Ohio St.3d 16, 523 N.E.2d 826, and Muirfield Assn., 
Inc. v. Franklin Cty. Bd. of Revision (1995), 73 Ohio St.3d 710, 654 N.E.2d 110, 
the BOE asserts that the property acquired by Cummins, because it represented a 
legal fee interest encumbered by the deed restriction, “was not the same property 
that the County Auditor was required to value for real property tax purposes as of 
January 1, 2003.”  According to the BOE, the auditor was required to value the 
fee simple unencumbered, as this court proclaimed in Alliance Towers and 
                                                 
2.  In an introductory passage to its argument, the BOE decries the BTA’s decision as “default 
valuation” and argues in essence for a very strong presumption in favor of the auditor’s initial 
determination of value.  That argument conflicts with our holding in Dayton-Montgomery Cty. 
Port Auth. v. Montgomery Cty. Bd. of Revision, 113 Ohio St.3d 281, 2007-Ohio-1948, 865 N.E.2d 
SUPREME COURT OF OHIO 
6 
Muirfield.  As a result, the sale price of the encumbered fee represented only a 
portion of the value of the property, because the existence of the encumbrance 
putatively made the legal fee interest less valuable than it would be without the 
deed restriction. 
{¶ 15} We find that Alliance Towers and Muirfield are inapposite and that 
the holding of Berea controls our decision of this point of law.  Alliance Towers 
and Muirfield both addressed the valuation of property by appraisal; in neither of 
those cases did the court confront a recent, arm’s-length sale price as evidence of 
value.  On the other hand, Berea did involve a recent, arm’s-length sale price, and 
it confronted and rejected the very argument the BOE is making here. 
{¶ 16} In Berea, we addressed the 1997 tax-year valuation of a 10.719-
acre parcel.  The tract contained a 113,000-square-foot retail space and was 
subject to a 1967 25-year lease with Kmart as lessee, pursuant to which Kmart 
held an option to extend the lease for three additional five-year periods.  Rent 
consisted of a base amount plus a percentage of gross sales.  Additionally, a 
second portion of the tract was subject to a 1985 20-year lease for a 3,454-square-
foot Burger King restaurant, with the Burger King franchisee holding an option to 
extend the lease for four additional five-year periods. 
{¶ 17} Among other things, the owner in Berea contended before the 
BTA and then before this court that the March 1996 sale price for the parcel ought 
to be regarded as the value of the property as of January 1, 1997.  In a prior 
decision, the BTA had already rejected the use of the sale price to determine value 
for the 1996 tax year:  the BTA had held that “the sale was not unencumbered and 
does not reflect the fee simple value of the subject property.”  Berea City School 
Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision (Oct. 13, 2000), B.T.A. Nos. 
96-L-1382, 
96-L-1383, 
96-L-1424, 
and 
96-L-1425, 
at 
31, 
found 
at 
                                                                                                                                     
22, ¶ 27.  It also fails to reflect the state of the law by exalting the auditor’s appraised value over 
the legislative policy of using a recent, arm’s-length sale price. 
January Term, 2008 
7 
http://bta.ohio.gov/96L1382.PDF.  In the case involving the 1997 tax year, the 
BTA adopted the same approach.  Berea City School Dist. Bd. of Edn. v. 
Cuyahoga Cty. Bd. of Revision (Nov. 21, 2003), B.T.A. Nos. 2003-J-143, 2003-J-
144, and 2003-J-150, 2003 WL 22848297.  It was this very holding that we 
reversed in our decision in Berea. 
{¶ 18} The central tenet of the BOE’s argument is that the sale price of 
the legal fee interest is not indicative of value because of the existence of an 
encumbrance – in this context, a relatively minor deed restriction.  Berea holds 
that the arm’s-length sale price of a legal fee interest should not be adjusted on 
account of the mere existence of an encumbrance.  We therefore reject the BOE’s 
contention that the imposition of the deed restriction requires that the sale price be 
adjusted or that the restriction otherwise calls into question the validity of using 
the sale price to determine value. 
B 
{¶ 19} We now turn to those prior decisions from this court that address 
how to value property that is subject to encumbrances.  As already noted, the 
BOE relies heavily on Alliance Towers, Ltd. v. Stark Cty. Bd. of Revision, 37 Ohio 
St.3d 16, 523 N.E.2d 826, and Muirfield Assn. v. Franklin Cty. Bd. of Revision, 73 
Ohio St.3d 710, 654 N.E.2d 110.  Those cases explicitly state that “[f]or real 
property tax purposes, the fee simple estate is to be valued as if it were 
unencumbered.”  Alliance Towers, paragraph one of the syllabus, cited and 
followed in Muirfield,  at 711, 654 N.E.2d 110. 
{¶ 20} In the previous section of today’s opinion, we quickly 
distinguished those cases by observing that they involved situations in which 
value was determined not by sale price, but by appraisal.  We recognize, however, 
that standing alone, that observation does not quite suffice.  Quite simply, the 
principle articulated by those cases could easily be understood to require 
adjustment of a sale price to account for the effect of an encumbrance on value. 
SUPREME COURT OF OHIO 
8 
{¶ 21} Moreover, Section 2, Article XII of the Ohio Constitution requires 
that real property be taxed by “uniform rule according to value.”  Arguably, 
uniformity means that the rule for appraised properties must also be applied to 
properties that are subject to a recent, arm’s-length sale.  Indeed, in a case not 
cited by the parties, we have so stated. 
{¶ 22} In New Winchester Gardens, Ltd. v. Franklin Cty. Bd. of Revision 
(1997), 80 Ohio St.3d 36, 684 N.E.2d 312, we confronted a situation in which a 
landlord purchased government-subsidized housing.  Among other things, we 
agreed with the owner’s assertion that the subsidies and their effect on the value 
of the real property must be disregarded.  Id. at 44, 684 N.E.2d 312.  Our 
reasoning was that the syllabus rule cited above from Alliance Towers must be 
applied to cases where a recent, arm’s-length sale price was utilized, because 
failing to do so would violate constitutionally required uniformity.  Id. at 45, 684 
N.E.2d 312. 
{¶ 23} This case calls for us to revisit that ruling,3 because it cannot be 
reconciled with Berea. We hold that we erred in New Winchester when we 
authorized the use of appraisals to adjust the price set in a recent, arm’s-length 
transaction. To do so places the cart (appraisal) before the horse (an actual arm’s-
length sale). As we explained more than 40 years ago, the best method of 
determining value is an actual sale of the property, but because such information 
is not usually available, an appraisal becomes necessary. State ex rel. Park Invest. 
Co. v. Bd. of Tax Appeals (1964), 175 Ohio St. 410, 412, 25 O.O.2d 432, 195 
N.E.2d 908. When value is determined by appraisal, “the various methods of 
evaluation, such as income yield or reproduction cost, come into action,” but the 
goal of the appraisal is “to determine the amount which such property should 
bring if sold on the open market.” Id. The legislature reinforced these points 
                                                 
3.  Although the BOE does not press this point in its brief, paragraph one of the notice of appeal 
raises the issue. 
January Term, 2008 
9 
through the 1976 enactment of the now familiar language at R.C. 5713.03 that 
“[i]n determining the true value of any tract, lot, or parcel of real estate under this 
section, if such tract, lot, or parcel has been the subject of an arm’s length sale 
between a willing seller and a willing buyer within a reasonable length of time, 
either before or after the tax lien date, the auditor shall consider the sale price of 
such tract, lot, or parcel to be the true value for taxation purposes.” Am.Sub.H.B. 
No. 920, 136 Ohio Laws 3182, 3247. 
{¶ 24} The primacy of the sale price mandated by the statute and endorsed 
in Park Inv. Co. and Berea simply cannot be reconciled with the contention that 
an actual sale price must be adjusted because the legal fee interest is subject to 
encumbrances.  Because the legal fee interest in real property is so often subject 
to some type of encumbrance, one could as a practical matter rarely utilize the 
sale price to determine value if the fee interest had to be valued as though the 
encumbrances did not exist. 
{¶ 25} Finally, our decision in this case does not raise a constitutional 
uniformity issue, and to the extent we expressed a contrary holding in New 
Winchester, we overrule it.  Quite simply, the uniform rule is that property should 
be valued in accordance with an actual sale price where the criteria of the recency 
and the arm’s-length character of the sale are satisfied.  Where there is no such 
sale, the uniform rule envisions that an appraisal will be prepared, and 
constitutional uniformity does not prohibit the differential treatment of 
encumbrances when property is being appraised in materially different contexts. 
{¶ 26} For example, the appraisal of subsidized housing in Alliance 
Towers, 37 Ohio St.3d 16, 523 N.E.2d 826, raised the issue of how government 
subsidies affected the value of the realty, and how prospective buyers would view 
the subsidy in determining what they would be willing to pay for the property.  In 
Muirfield, 73 Ohio St.3d 710, 654 N.E.2d 110, a parcel owned by an association 
of property owners was subject to easements owned by those same property 
SUPREME COURT OF OHIO 
10 
owners.  Arriving at an appraised value of such a parcel presented significant 
challenges, given the common ownership and the easements, and the manner in 
which the surrounding owners currently realized the value of the parcel at issue 
through those easements.  But no such complexity afflicts a case like the present 
one; here, a recent sale was presented, and no evidence impugned its arm’s-length 
character.  The sale price in such a situation becomes the measure of the value of 
the property. 
C 
{¶ 27} Perhaps the most significant flaw in the BOE’s argument lies in the 
failure to recognize that encumbering property typically represents an owner’s 
attempt to realize the full value of the property.  The mall developer in Berea, for 
example, had exercised business judgment 20 or more years before the tax year 
when it entered into long-term leases with certain terms.  As it happened, the rent 
paid under those leases might appear to be below market 20 years later, but that 
does not mean the tax assessor is required to second-guess the earlier exercise of 
business judgment. 
{¶ 28} Even more directly relevant to this case is the example of a 
residential developer creating a new subdivision.  Such a developer may write 
restrictions into the deeds of all lots within the new subdivision, and in doing so, 
the developer intends to optimize value for all the landowners in the development.  
When each lot is sold, it is subject to the deed restrictions; but the arm’s-length 
sale price of the lot reflects its value, and no adjustment for the deed restrictions 
would be appropriate. 
{¶ 29} The matter of business judgment received extensive discussion by 
the Wisconsin Supreme Court in a well-reasoned opinion.  In Darcel, Inc. v. 
Manitowoc Bd. of Review (1987), 137 Wis.2d 623, 405 N.W.2d 344, the court 
addressed the question whether a January 1, 1984 tax assessment ought to be 
based on an arm’s-length sale in August 1983.  In August, all shares of Darcel, 
January Term, 2008 
11 
Inc. were sold. Darcel’s sole asset was the shopping mall whose value was at 
issue in the case.  The mall was subject to long-term leases entered into at fair 
market rates in 1968.  The taxing authority sought to value the mall based upon 
current market rent, which exceeded the contract rent under the long-term leases 
and which generated a value that exceeded the August 1983 sale price.  The 
owner objected and prevailed below.  Wisconsin’s highest court affirmed the use 
of the sale price to determine the value of the property, observing that the 
presence of long-term leaseholders “may give stability to a mall” such that “the 
mall itself might never have begun construction or started as a business entity”; 
had that occurred, the taxing district “never would have had the mall within its tax 
base.”  Darcel, 137 Wis.2d at 639-640, 405 N.W.2d 344. 
{¶ 30} According to the Wisconsin court, the legitimate question raised by 
encumbrances is whether agreements creating those encumbrances themselves 
were entered into at arm’s length.  The court stated that “the sale price should be 
conclusive of market price unless there is evidence that the leases themselves 
were not entered into at arms-length and in good faith.  Sale-leaseback situations, 
for instance, may be undertaken with terms to avoid property tax and might not be 
entered at arms-length.”   Id. at 631, 405 N.W.2d 344.  Accord S. 
Euclid/Lyndhurst Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision (1996), 74 Ohio 
St.3d 314, 317, 658 N.E.2d 750 (in a sale-leaseback situation, “a willing buyer 
would pay less for a property if the leaseback arrangement limited the amount of 
rent the buyer could collect”).  Ultimately, such a situation presents an issue of the 
arm’s-length character of the transaction, and Berea does not stand in the way of 
such an inquiry. 4 
                                                 
4.  Consistent with S. Euclid, a sale-leaseback may not furnish an arm’s-length sale price.  
Namely, even if the contract as a whole is entered into at arm’s length, the existence of a sale 
element and a leaseback element in the same contract may deprive both of those elements of their 
arm’s-length character, because the existence of the one element makes the otherwise unrelated 
parties related with respect to the other element. 
SUPREME COURT OF OHIO 
12 
{¶ 31} But the record of this case involves neither a sale-leaseback nor an 
otherwise collusive relationship between seller and buyer.  Indeed, the BOE has 
never contended that the sale at issue was anything but an arm’s-length 
transaction, and the BTA found that it was one.  Thus, the deed restriction at issue 
was imposed in the context of the arm’s-length sale.  Nor was there any evidence 
that either the bank that sold the property or Cummins as purchaser was somehow 
not acting as a typically motivated participant in the market place.  At the BTA 
hearing, Mr. Cummins testified that the restriction made no difference to his 
calculations in purchasing the property.  We understand that statement to mean 
that the restriction affected neither his own intended use of the property nor the 
prospect that he could resell it in the open market if need be and obtain an 
acceptable price. 
{¶ 32} Accordingly, Berea controls the present case, and we reject the 
BOE’s contention that the existence of the deed restriction rendered the sale price 
not indicative of the true value of the property. 
D 
{¶ 33} In its decision, the BTA compared the deed restriction to “a sale-
leaseback or special financing, which the Supreme Court has determined does not 
prevent the sale price from being competent and probative of value.”  The 
foregoing discussion shows that, contrary to the BTA’s assertion, there may be 
situations in which a sale price derived from a sale-leaseback might not reflect 
true value.  Nonetheless, the BTA’s ultimate conclusion correctly applies Berea 
by regarding the sale price as determinative of value. 
IV 
{¶ 34} The BOE’s other main argument concerns the building permit and 
the renovation of the property.  The BOE contends that the evidence in the record 
shows that the property was a different one on the tax lien date from what was 
purchased a little over four months previously, or, at a minimum, that the 
January Term, 2008 
13 
evidence was sufficient to place a burden on the property owner to show the 
property was not so different as to affect its value.  We now examine these 
contentions. 
A 
{¶ 35} R.C. 5713.03 contains two provisions that are relevant to the issue.  
First, the arm’s-length sale price is to be utilized to determine true value, but only 
if the sale was “within a reasonable length of time, either before or after the tax 
lien date.”  The reasonableness of the length of time – sometimes expressed as 
whether the sale was “recent” relative to the tax lien date – encompasses all 
factors that would, by changing with the passage of time, affect the value of the 
property.  As we have previously held, general developments in the marketplace 
are relevant.  See New Winchester Gardens, 80 Ohio St.3d at 44, 684 N.E.2d 312 
(one factor in determining reasonableness is “consideration of changes that have 
occurred in the market”).  Also relevant are those conditions that are specific to 
the property itself.  Deane v. Miami Cty. Bd. of Revision (Dec. 12, 2003), B.T.A. 
No. 2003-N-560 (combination of improvements made between sale and tax lien 
date and passage of 47 months made sale not “recent”); M.H. Murphy Dev. Co. v. 
Franklin Cty. Bd. of Revision (Dec. 3, 2004), B.T.A. No. 2003-R-1177 
(documented changes in zoning and construction made sale price unreliable).  It 
follows that, with respect to the standard of reasonableness under the statute, the 
BOE’s allegation that the property had been improved could affect the validity of 
using the sale price. 
{¶ 36} Additionally, R.C. 5713.03 specifically provides that the sale price 
should not be considered the true value of the property if either of the following 
conditions occurs subsequent to the sale:  (i) “[t]he tract, lot, or parcel of real 
estate loses value due to some casualty” or (ii) “[a]n improvement is added to the 
property.”  Cummins’s renovations raise the question whether an “improvement” 
was “added” to the property between the sale and the tax lien date. 
SUPREME COURT OF OHIO 
14 
B 
{¶ 37} We first address whether the record demonstrates that an 
“improvement” was “added” that would make it inappropriate to utilize the sale 
price in determining value.  The property record card reflects $120,000 of 
building permits obtained in October 2002, a time between the sale and the tax 
lien date.  Other than that, the only evidence on point consists of the cross-
examination of Mr. Cummins at the hearing. 
{¶ 38} The BTA found this evidence inconclusive, in that it failed to 
“definitively establish when [removal of the bank vault] took place” and fell short 
of showing “when any other modifications to the building were accomplished and 
at what cost.”  The BTA’s evaluation of the evidence typically merits our 
deference, and we see no reason as a matter of law to disturb the BTA’s 
conclusion in this case. 
{¶ 39} Accordingly, the evidence failed to show an “improvement” being 
“added” to the property, nor did it otherwise demonstrate that the length of time 
elapsed between the sale and the lien date was not reasonable under the statute. 
C 
{¶ 40} Our discussion of the state of the evidence does not end the 
analysis.  The BOE contends that Cummins as owner and as proponent of using 
the sale price had a burden to make a definitive showing that its renovation of the 
building had not changed the value of the property by the tax lien date.  
According to this argument, even if the evidence in the record did not establish 
that an “improvement” was “added,” the evidence at least sufficed to place a 
burden on Cummins to show that no improvement was added by the tax lien date.  
We disagree. 
{¶ 41} In Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of 
Revision (1997), 78 Ohio St.3d 325, 327, 677 N.E.2d 1197, we held that “a 
rebuttable presumption exists that the sale has met all the requirements that 
January Term, 2008 
15 
characterize true value.”  The initial burden on a party presenting evidence of a 
sale is not a heavy one, where the sale on its face appears to be recent and at 
arm’s length.  Were we to require a definitive showing by the proponent that no 
evidence controverted the recency and arm’s-length character of the sale, then 
most cases involving a sale price would require the proponent to introduce 
appraisals and other extrinsic evidence showing the absence of any reason not to 
use the sale price to determine value.  We believe that such a requirement would 
defeat the legislative purpose of R.C. 5713.03, which is to promote the use of the 
recent sale to determine the value of the property and thereby minimize the need 
for other evidence when a recent sale price is available. 
{¶ 42} Additionally, the structure of the statute supports our conclusion in 
this case.  The legislature deliberately composed the statute in a manner that first 
recognizes a general rule concerning the use of the sale price to determine value, 
and then makes the addition of an improvement an exception to that general rule.  
See In re Estate of Roberts (2002), 94 Ohio St.3d 311, 314-315, 762 N.E.2d 1001 
(language of subsequent paragraph of statute stated exclusions from the broad 
general rule stated in the first paragraph); H.R. Options, Inc. v. Zaino, 100 Ohio 
St.3d 373, 2004-Ohio-1, 800 N.E.2d 740, ¶ 15 (statute stated general rule and then 
set forth four “exclusions” from that general rule).  In this case, presenting an 
August 2002 sale that appeared to be at arm’s length satisfied the initial burden of 
invoking R.C. 5713.03, and the burden lay on the opponent to show that the 
condition set forth at division (B) was present.  Since neither the BOE nor the 
county proved the addition of an improvement by the tax lien date, the BTA 
properly used the sale price to determine value. 
{¶ 43} The BOE strenuously argues that the burden of proof should be 
placed upon Cummins because Mr. Cummins was “[t]he only party at the BTA 
who had any idea of the exact condition of [the] property.”  We find no merit in 
this assertion.  Other than the reference to the building permit on the property 
SUPREME COURT OF OHIO 
16 
record card, the BTA had no documentation before it of the changes to the 
property, yet this information would have been available to the auditor, the BOR, 
and the BOE.  By law, county auditors receive notice of all construction that 
exceeds two thousand dollars. R.C. 5713.17. Also, the law requires county 
auditors to include such information on property record cards and consult it when 
valuing the property.  Ohio Adm.Code 5703-25-09 and 5703-25-09(D)(23).  
Ohio’s municipalities require building permits for improvements; in this case, the 
city of Columbus imposed the general requirement for a building permit, 
Columbus City Code 4113.37(B)(1), and also required issuance of a certificate of 
occupancy when the work was done.  Columbus City Code 4117.06.  The BOE 
could have obtained this documentation and submitted it to the BTA, but failed to 
do so. 
{¶ 44} Furthermore, at the BTA the BOE utilized discovery only to obtain 
disclosure of Cummins’s hearing witnesses and exhibits.  The BTA rules permit 
the BOE to obtain specific discovery with respect to the state of improvements to 
the property and to subpoena persons and documents to the hearing.  Ohio 
Adm.Code 5717-1-11(A) and 5717-1-13(A). 
{¶ 45} Under all these circumstances, we decline to place the burden of 
showing a negative – the fact of not adding an improvement – on the party that 
proposes to use a recent sale price to determine value.  Instead, the burden lay 
where the BTA placed it:  the parties opposing the use of the sale price had to 
show that an improvement had been added to the property as of the tax lien date. 
V 
{¶ 46} For all the reasons set forth in this opinion, we conclude that the 
BTA acted reasonably and lawfully in using the sale price to determine the value 
of the property.  The BTA also correctly declined to honor Cummins’s attempt to 
allocate $300,000 of the $385,000 sale price to the property, because Cummins 
failed to show the propriety of the allocation.  See St. Bernard Self-Storage, 
January Term, 2008 
17 
L.L.C. v. Hamilton Cty. Bd. of Revision, 115 Ohio St.3d 365, 2007-Ohio-5249, 
875 N.E.2d 85, ¶ 19.  We therefore affirm the decision of the BTA. 
Decision affirmed. 
 
MOYER, C.J., and LUNDBERG STRATTON, O’CONNOR, and O’DONNELL, JJ., 
concur. 
 
PFEIFER and LANZINGER, JJ., concur in judgment only. 
__________________ 
 
Wayne E. Petkovic, for appellee Cummins Property Services, L.L.C. 
 
Rich, Crites & Dittmer, L.L.C., Mark H. Gillis, and Jeffrey A. Rich, for 
appellant. 
______________________