PRESENT: All the Justices

CITY OF RICHMOND 

OPINION BY

v. Record No. 110820 CHIEF JUSTICE CYNTHIA D. KINSER

June 7, 2012

JACKSON WARD PARTNERS, L.P.

FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND

Melvin R. Hughes, Jr., Judge

The City of Richmond (the City) appeals from a judgment of 

the circuit court correcting erroneous tax assessments on real 

property owned by Jackson Ward Partners, L.P. (JWP). Because we 

conclude that JWP failed to carry its burden to prove the fair 

market value of the eight parcels of real property at issue, we 

will reverse the judgment of the circuit court.

FACTS AND PROCEEDINGS

JWP owns real property, designated as Jackson Ward 

Apartments (the Properties), in the Jackson Ward area of the 

City of Richmond, which it operates as an affordable housing 

development.1

 The Properties are considered a "scattered site 

community" and consist of 11 structures with 18 residential 

rental units situated on eight, non-contiguous tax parcels 

located on three different streets, West Clay, West Marshall, 

and North 1st Streets. The Properties consist of various types 

of dwellings: three parcels contain a single duplex, i.e., one 

 1 The Properties were originally purchased by Jackson Ward 

Associates, an affiliated company, and subsequently assigned to 

Jackson Ward Partners, L.P. In this opinion, these companies 

will be referred to collectively as JWP.
2

structure with two units, four parcels contain single-family 

homes, and one parcel contains four attached duplexes with a 

total of eight units. The parcels are zoned R-6, single family 

or duplex,2 and contain both two-bedroom and three-bedroom units.

In purchasing the eight parcels, JWP agreed to renovate the 

structures and operate the Properties as affordable rental 

housing. The required renovations were financed through 

Virginia Housing & Development Authority (VHDA) loans, the terms 

of which were pre-negotiated by the Richmond Redevelopment & 

Housing Authority (RRHA) and United States Department of Housing 

and Urban Development (HUD) through the Properties' 

participation in HUD's Section 8 affordable housing program.

The eight, non-contiguous tax parcels are subject to a deed 

of trust and a regulatory agreement with VHDA. Under that

agreement, the parcels are required to be operated as an 18-

unit, affordable, multifamily rental housing development for a 

40-year period.3 The VHDA treats the Properties as comparable to 

an 18-unit apartment complex. The regulatory agreement

prohibits the sale of individual structures or parcels and 

requires that the units be rented to persons whose income is 40% 

 2 See Richmond City Code § 114-412.1.

3 In addition, a regulatory agreement restricting the 

property for a 30-year period was required for participation in 

the low income housing tax credit program. VHDA administers the 

low income housing tax credit.
3

or less than the area median income.4 Pursuant to the various

agreements, HUD dictates the rental rates on the Properties and 

conducts periodic inspections to ensure compliance with certain 

regulatory requirements.

Pursuant to Code § 58.1-3984, JWP filed a second amended 

complaint in the circuit court for correction of erroneous tax 

assessments on the Properties for the tax years 2005-2008. In 

its complaint, JWP claimed the assessments were "clearly 

erroneous and in excess of fair market value in violation of the 

Constitution of Virginia, Article X, § 2," and "lacked 

uniformity . . . with respect to the same class of subjects

within the City in violation of the Constitution of Virginia, 

Article X, § 1."

At a five-day bench trial, Eugene Joseph, a licensed

commercial real estate appraiser, testified for JWP regarding 

his appraisal of the Properties for the tax years in question.

Joseph stated that the "cornerstone of any appraisal" is 

determining the highest and best use. He explained the "four 

general areas of the highest and best use": what is "legally 

permissible, . . . physically possible, financially feasible, 

and . . . maximally productive." Because the eight parcels were 

"restricted by an extended use regulatory agreement" and could 

 4 By receiving the low income housing tax credit, JWP must 

rent the units to individuals whose income is 50% or less than 

the area median income.
4

not "be sold off as a single family [home] or duplex," Joseph 

opined that the only legally permissible use, and thus the 

highest and best use, was a multifamily, 18-unit parcel.

According to Joseph, he had "to value the property as what it 

truly is and that is a scattered site single, multifamily 

property per what's legally permissible."

To determine fair market value, Joseph considered the cost, 

sales comparison, and income approaches to valuing the 

Properties. Joseph deemed the income approach to be the primary 

indicator of value but used the sales comparison approach for 

"some additional support." According to Joseph, the income 

approach is more reliable because "typical buyers and investors 

consider the income potential of a property." In applying the 

income approach, Joseph considered the contract rents set by 

HUD, the typical vacancy and collection losses, typical 

operating costs for such a property, and the historical 

operating expenses of the Properties to arrive at the net 

operating income. Joseph then determined a capitalization rate, 

primarily by "extract[ing] capitalization rates from . . . other 

sales," and capitalized the net operating income to arrive at 

his value estimate.5 Under the sales comparison approach, Joseph 

 5 Because the real estate taxes were in dispute, Joseph 

excluded them from the operating expenses in determining net 

operating income and compensated for the real estate taxes by 

adjusting the capitalization rate.
5

compared the sale of similar properties, which in this case 

meant multifamily apartment complexes. Joseph then made "lump 

sum adjustment[s] to account for" the rent restrictions, again 

because "the property is encumbered and you have to account for 

that."

Using these methods, Joseph determined that the fair market 

value of the Properties as a whole was $600,000 for each of the 

tax years 2005-2008. Joseph opined that "the overall value of 

$600,000 should be allocated on a per unit basis to reflect the 

individual tax parcels as identified by the City." According to

Joseph, "you can simply allocate on a per unit basis to the 

various parcels and to the various units." By allocating the 

$600,000 value equally on a per unit basis to the 18 units, 

Joseph determined the fair market value of each unit to be 

$33,333. Joseph then determined the fair market value of each 

tax parcel based on the number of units located on the parcel.

On cross-examination, Joseph conceded that the parcels 

could be assessed individually, though only as a "fractional 

appraisal" because the highest and best use of the Properties

was as one multifamily housing development. According to 

Joseph, "you have to value the property as one" because of the

restrictions contained in the regulatory agreement. He further 

admitted that his appraisal was not a fee simple valuation for 

the same reason. When asked if his allocation method "was 
6

simply a mathematical calculation," Joseph indicated that it was 

and opined that the method was "a valid technique."

Several witnesses who testified for JWP stated that the 

Properties operate at a loss due, in large part, to the City's 

tax assessments. According to those witnesses, the Properties

could neither generate sufficient income to justify the assessed 

value nor be sold at the assessed value. 

Richard Woodson, the Deputy Assessor for the City and also 

a licensed real estate appraiser, testified regarding the City's

assessment of the Properties for tax years 2005-2008. In 

contrast to Joseph, Woodson stated that the "true test of 

highest and best use" is "[w]hat use produces the highest 

value." Woodson explained that in the Jackson Ward area of the 

City, the trend is for "rooming houses" to be converted back to 

single family dwellings. That factor, along with the applicable 

zoning and the type of construction on each parcel led Woodson 

to conclude that the highest and best use of the Properties is 

as single-family homes and duplexes. Woodson did not consider 

the Properties to be a scattered site apartment complex because 

he was required to assess the "fee simple interest [de]void of 

any encumbrances." Woodson stated the City's assessment method 

was not restricted by the deed of trust or the regulatory 

agreement's treatment of the Properties as a multifamily housing 

development and, with one exception, he did not consider the 
7

restrictions imposed by the regulatory agreement in arriving at 

the assessed value of the eight parcels.6 Doing so, he opined, 

would mean assessing a leasehold interest rather than a fee 

simple interest.

Woodson believed the City was required to assess each 

parcel individually: "Each parcel gets a separate tax bill, so 

it has to have a separate assessment." He pointed out that the 

RRHA has numerous single-family dwellings scattered throughout

the City that have similar rent restrictions. Nevertheless, the 

City assesses each parcel individually under a fee simple 

valuation. Woodson opined that other than the fact that the 

parcels are owned by one entity and are rented as a package, 

they do not resemble an apartment complex.

To determine the fair market value of each of the eight tax 

parcels, Woodson considered the income, cost, and sales 

comparison approaches. Unlike Joseph, Woodson utilized the

sales comparison approach because it provided "[t]he most 

 6 As of the 2007 tax year, to determine fair market value, a 

taxing authority had to consider restrictions on rent and 

alienation of title, and the actual operating expenses for real 

property "containing more than four residential units operated 

in whole or in part as affordable rental housing." Former Code 

§ 58.1-3295 (as in effect prior to amendments by 2009 Acts ch. 

264, 2010 Acts chs. 552, 791, 824, and 2011 Acts ch. 137). 

Woodson applied that statute only to the parcel on Clay Street, 

with four attached duplexes, for tax years 2007 and 2008. Under 

the statute, Woodson accounted for the "below market rents and 

higher than normal expenses" by applying a "lower gross rent 

multiplier."
8

readily identifiable and trackable information for single family 

and duplex houses" that was "readily available" to the City. To 

apply the sales comparison approach, Woodson used properties 

"most similar in size, location, condition, quality, land sizes, 

et cetera." As Woodson noted, the structures on the parcels 

have unique "individual characteristics" with respect to 

setbacks, entries, porches, and square footage. The City

assessed the eight tax parcels at the following fair market 

values for the years in question:

Address 2005 2006 2007 2008

509 N. 1st St. $150,000 $150,500 $162,000 $186,000

511 N. 1st St. $150,000 $133,000 $155,000 $171,000

517 N. 1st St. $185,000 $185,000 $190,000 $200,000

519 N. 1st St. $169,000 $153,000 $163,000 $174,000

521 N. 1st St. $155,000 $182,000 $215,000 $220,000

315-321 W. Clay St. $565,000 $725,000 $605,000 $605,000

409 W. Marshall St. $165,000 $185,000 $225,000 $225,000

411 W. Marshall St. $155,000 $194,000 $215,000 $235,000

TOTAL VALUES $1,694,000 $1,907,500 $1,930,000 $2,016,000

Woodson criticized Joseph's assessment as not valuing the 

fee simple interest but instead the leased fee, an "entirely 

different subject[]." In addition, Woodson believed the

properties used by Joseph as comparable properties were 

completely different types of property. Joseph, Woodson stated, 

should have assessed each parcel individually and his assessment 

was "nothing more than an appraisal for investment value in a 

leasehold context."
9

Following the close of evidence, JWP asked the circuit

court to correct the City's assessments on the eight tax 

parcels. According to JWP, the City, in assessing the 

Properties, ignored their highest and best use as an 18-unit,

multifamily housing development. Because the regulatory 

restrictions required that the Properties be operated as an 

affordable housing development, JWP argued, the City committed 

manifest error by basing its assessment on a false premise: that 

the units were single-family homes and duplexes. While JWP 

conceded that the Properties consisted of distinct tax parcels 

and that "the law require[d] that all property be taxed," it 

argued there was no requirement for an "individual appraisal on 

each parcel."

Responding, the City argued that it was not a party to the 

restrictions placed on the Properties and the restrictions, 

therefore, could not alter its assessment obligations. The City 

argued that "the biggest flaw" in JWP's appraisal was the

determination of highest and best use, which ignored the 

Properties' R-6 zoning and the fact that there are eight, noncontiguous tax parcels. The City also claimed that by 

appraising all the parcels as a whole and then allocating that 

value to each of the individual parcels with a "mathematical 

calculation," JWP ignored this Court's holding in West Creek 

Associates, LLC v. County of Goochland, 276 Va. 393, 665 S.E.2d 
10

834 (2008), that each parcel must be assessed individually. In 

addition, the City noted that JWP’s appraisal failed to account 

for differences in size, location, age, and features of the 

individual structures, as well as the fact that some units had 

recently been renovated.

The circuit court held that JWP satisfied its burden of 

proving the City's assessments for years 2005-2008 were 

erroneous and ordered the City to correct its assessments and

issue refunds to JWP for taxes it overpaid based on the 

erroneous assessment, plus interest. The circuit court agreed 

with JWP that consideration of the Properties' highest and best 

use compelled consideration of the applicable regulatory

restrictions. Invoking the definition of fair market value as 

"[w]hat a willing buyer while under no compulsion to buy" will 

pay, the court held that the "deed restrictions have to come 

into play." Because the City's assessments failed to consider 

the restrictions on the Properties, the court concluded that JWP 

had carried its burden to show by a clear preponderance of the 

evidence that the City committed manifest error in its 

assessments of the eight tax parcels. The City, according to 

the court, did not "take into account the reality of the 

situation."

The circuit court stated:
11

[Valuing the property as an apartment 

complex is] the best way to approach it given the 

deed restrictions and the regulatory agreement. 

It has to be. It just defies reality . . . that 

any purchaser approaching a seller of these 

properties wouldn't have to take these things 

into account, and the fee simple analysis is just 

not appropriate. 

In addition, the court opined that "the income approach as urged 

by [JWP] is the correct and more readily available vehicle for 

determining . . . the fair market value." The circuit court 

thus concluded that the City’s tax assessments should be 

"adjusted according to [JWP's] evidence and the refunds 

allowed."

The circuit court denied the City's motion to reconsider,

and this appeal followed.

ANALYSIS

We granted the City an appeal on the following assignments 

of error:

1. The Circuit Court of the City of Richmond 

erred in ruling that eight non-contiguous 

tax parcels should be valued as one 

apartment complex.

2. The Circuit Court of the City of Richmond 

erred by accepting Plaintiff's values, which 

were determined in bulk.

3. The Circuit Court of the City of Richmond 

erred by ruling that the City's values had 

to be determined under the income approach 

to valuation at less than fee simple 

interest.

4. The Circuit Court of the City of Richmond 

erred by determining that Plaintiff overcame 
12

the presumption of correctness under 

Virginia Code § 58.1-3984.

With regard to these issues, the parties make essentially the 

same arguments on appeal as they did before the circuit court. 

If the City is correct on any one of the issues raised in the

assignments of error, the circuit court's judgment must be 

reversed.

The question presented by the first two assignments of 

error is dispositive of the appeal, i.e., whether the circuit 

court erred as a matter of law by holding, based on JWP's 

appraisal of the Properties, that eight separate, non-contiguous 

parcels of real property can be appraised as one parcel and that 

the appraised value could then be allocated among the individual 

parcels based solely on the number of rental units situated on 

each parcel. This question is a mixed question of law and fact, 

and we thus conduct a de novo review. See Ford Motor Credit Co. 

v. Chesterfield Cnty., 281 Va. 321, 334, 707 S.E.2d 311, 317 

(2011).

The Constitution of Virginia, with certain exceptions not 

relevant here, requires that all property be taxed, and that all 

taxes "shall be uniform upon the same class of subjects within 

the territorial limits of the authority levying the tax." Va. 

Const. art. X, § 1. In addition, all assessments of real

property "shall be at their fair market value." Va. Const. art. 
13

X, § 2. A taxing authority's assessment is presumed to be 

correct, and a taxing authority need not "prov[e] the 

correctness of its assessment." TB Venture, LLC v. Arlington 

Cnty., 280 Va. 558, 563, 701 S.E.2d 791, 794 (2010). The lack 

of such evidence " 'does not impeach [the correctness of an 

assessment] since the taxpayer has the burden of proving the 

assessment erroneous.' " Id. (quoting West Creek, 276 Va. at

409, 665 S.E.2d at 843).

A taxpayer challenging an assessment must show, "by a clear 

preponderance of the evidence," that the taxing authority 

"totally disregarded controlling evidence in making the 

assessment" or "committed manifest error." TB Venture, 280 Va. 

at 563, 701 S.E.2d at 794 (internal quotation marks omitted). 

To establish manifest error in the assessment, the taxpayer must

prove 

that the taxing authority employed an improper 

methodology in arriving at a property's assessed 

value or by establishing "a significant disparity 

between fair market value and assessed value 

. . . so long as the assessment [does not come] 

within the range of a reasonable difference of 

opinion, . . . when considered in light of the 

presumption in its favor."

Id. (quoting West Creek, 276 Va. at 414, 665 S.E.2d at 845)

(alterations in original) (internal quotation marks omitted).

Regardless of the manner in which a taxpayer attempts to 

establish manifest error, 
14

to satisfy the statutory requirement of showing 

that real property is assessed at more than its 

fair market value, a taxpayer must necessarily 

establish the property's fair market value. This 

is so irrespective of whether a taxpayer is 

attempting to show manifest error or disregard of 

controlling evidence by proving a significant 

disparity between fair market value and assessed 

value, or by establishing a flawed methodology by

the taxing authority in setting the assessed 

value.

West Creek, 276 Va. at 417, 665 S.E.2d at 847 (citation omitted)

(emphasis added).

"[F]air market value 'is the present actual value of the 

land with all its adaptations to general and special uses, and

not its prospective, speculative or possible value, based on 

future expenditures and improvements.'" Id. at 416, 665 S.E.2d 

at 846 (quoting Fruit Growers Express Co. v. City of Alexandria, 

216 Va. 602, 609, 221 S.E.2d 157, 162 (1976)); see also Keswick 

Club, L.P. v. County of Albemarle, 273 Va. 128, 136, 639 S.E.2d 

243, 247 (2007) (fair market value of real property is the "sale 

price when offered for sale by one who desires, but is not 

obliged, to sell it, and is bought by one who is under no 

necessity of having it") (internal quotation marks omitted).

There are many factors to be considered in 

arriving at the fair market value of property. 

While size and cost of the property may be 

factors to be given weight, there are many other 

factors which tend to increase or diminish such 

value; for instance, the design, style, location, 

appearance, availability of use, and the economic 

situation prevailing in its area, as well as 

other circumstances.
15

Smith v. City of Covington, 205 Va. 104, 108-09, 135 S.E.2d 220,

223 (1964).

In West Creek, 144 separate limited liability companies

(collectively, West Creek) challenged the tax assessments of 144 

parcels of real property comprising a total of 2,500 acres, a 

portion of which had been deeded to each company. 276 Va. at 

397-98, 665 S.E.2d at 836. Citing the lack of metes and bounds 

descriptions of the parcels, an approved subdivision, and 

infrastructure on many of the parcels, West Creek's expert real 

estate appraiser valued the parcels "as a whole" and then 

"assigned a per acre value . . . based on the availability of 

infrastructure." Id. at 401, 665 S.E.2d at 838. On appeal, one 

of the issues was whether the trial court erred in concluding 

that the taxpayer had failed to establish the fair market value 

of certain parcels of real estate because the taxpayer "had done 

nothing more than spread the value of the development across the 

individual parcels." Id. at 414, 665 S.E.2d at 845 (internal 

quotation marks omitted).

This Court affirmed the trial court's judgment "that West 

Creek failed to present credible evidence of the parcels' fair 

market values." Id. at 416-17, 665 S.E.2d at 847. We held that 

"[i]n order to satisfy the statutory requirement of showing that 

real property is assessed at more than its fair market value, 
16

see Code § 58.1-3984(A), a taxpayer must necessarily establish 

the property's fair market value." Id. at 417, 665 S.E.2d at 

847. Citing Code § 58.1-3290, we pointed out that even West 

Creek agreed the County was required to assess the 144 parcels 

individually. Id. at 414, 665 S.E.2d at 846.

In relevant part, Code § 58.1-3290 provides 

that, "[w]hen a tract or lot becomes the property 

of different owners in two or more parcels, 

subsequent to any general reassessment of real 

estate in the city or county in which such tract 

or lot is situated each of the two or more 

parcels shall be assessed and shown separately 

upon the land books, as required by law." 

Although the assessments at issue in this appeal 

were part of the County's quadrennial 

reassessment, other statutes also require the 

parcels to be assessed individually. See, e.g., 

Code § 58.1-3281 (commissioner of revenue shall 

annually, on January 1, "ascertain all the real 

estate in his county or city, . . . and the 

person to whom the same is chargeable with taxes 

on that day"); Code § 58.1-3303 (requiring clerk 

of each circuit court to provide commissioner of 

revenue with deed recordation receipt showing, 

among other things, description of real property 

conveyed and names of grantor and grantee); Code 

§ 58.1-3309 (requiring information appearing in 

receipts provided pursuant to Code § 58.1-3303 to 

be transferred "on the land book and charged to 

the person to whom the transfer is made").

Id. at 414 n.8, 665 S.E.2d at 846 n.8 (emphasis added).

In response to West Creek's argument that the trial court

had failed "to consider the recent purchase price for the 

amassed parcels as evidence of [their] fair market value," we 

held that West Creek was required to establish the fair market 

value of each parcel, regardless of any error on the part of the 
17

taxing authority. Id. at 415-17, 665 S.E.2d at 846-47. 

Continuing, we explained that West Creek's expert appraiser had 

"accepted the sale price of the 2,500 acres as controlling and 

assigned portions of the price as the per acre value for parcels 

depending on the developmental phase in which the parcels were 

located." Id. at 417, 665 S.E.2d at 847. We noted that the 

appraiser's methodology was "'an arithmetic formula,' which is 

not an accepted appraisal method." Id. Thus, we concluded that 

"West Creek's evidence did not rebut the presumption of 

correctness afforded the assessments." Id. at 417-18, 665 

S.E.2d at 847.

This Court's decision in TB Venture is even more 

compelling. There, TB Venture, LLC (TB Venture) alone owned a 

condominium development containing 21 units that were subject to 

an agreement requiring the units "to be rented to qualifying, 

low-income households for a period of 40 years and specif[ying] 

limitations on rental amounts and occupancy." 280 Va. at 560-

61, 701 S.E.2d at 792. TB Venture challenged the taxing 

authority's tax assessments on the condominium units and at 

trial presented testimony from an expert qualified in real 

estate appraisal. Id. at 561, 701 S.E.2d at 793. Valuing the 

units on a "'leased fee' rather than a fee simple basis" to 

account for the 40-year rental restrictions encumbering the 

units, the expert admitted that he appraised " 'all 21 units as 
18

a whole' " and "then allocated a value to each unit 'based on 

the pro rata share of the income of each of the units derived by 

the overall income.' " Id. at 561-62, 701 S.E.2d at 793. Like 

JWP's appraiser, Joseph, TB Venture's expert appraiser testified 

that "he did not determine the fair market value of each unit 

because 'the units [could not] be sold individually as 

condominiums' but are 'basically tied together through this 

covenant.' " Id. at 562, 701 S.E.2d at 793 (alteration in 

original).

The trial court sustained the taxing authority's motion to 

strike TB Venture's evidence. Id. at 562, 701 S.E.2d at 793. In 

part, the court concluded that TB Venture had " 'failed to prove 

the value of the subject properties.' " Id. On appeal, we 

affirmed the trial court's judgment. Id. at 565, 701 S.E.2d at 

795. Noting that "the taxpayer's burden to prove that real 

property is assessed at more than its fair market value 

necessarily requires that the taxpayer establish the property's 

fair market value," we held that TB Venture did not carry its 

"burden to establish each unit's fair market value." Id. at 

564-65, 701 S.E.2d at 794-95.

We explained that "just as the [taxing authority] was 

required to separately assess each unit, TB Venture was required 

to establish the fair market value of each unit." Id. at 564, 

701 S.E.2d 795. According to Code § 55-79.42, "each condominium 
19

unit constitutes for all purposes a separate parcel of real 

estate" and, "[i]f there is any unit owner other than the 

declarant, each unit, together with its common element interest 

. . . shall be separately assessed and taxed."7 See also West 

Creek, 276 Va. at 414 n.8, 665 S.E.2d at 846 n.8 (listing 

statutes that require parcels of real property to be assessed 

individually).

Addressing TB Venture's argument that "each unit's location 

in the complex, its amenities, and even its view [were]

irrelevant because of the restrictions" applicable to all the 

units, the Court stated: 

To the extent there are market-driven 

impediments to selling the units individually and 

limitations on the rental income that can be 

realized, such factors may affect each unit's 

fair market value. But, they do not alter the 

statutory requirement that condominiums be 

treated as separate parcels of real estate and 

separately assessed. Nor do such factors alter 

TB Venture's burden to establish each unit's fair 

market value in order to show that its real 

property is assessed at more than fair market 

value.

Id. at 565, 701 S.E.2d at 795 (citations omitted) (emphasis 

added).

The statutes at issue in TB Venture and West Creek

requiring individual assessments of the real properties at issue 

in those cases are not unique in the realm of real property

 7 TB Venture was not the "declarant." Id. at 564, 701 

S.E.2d at 794.
20

assessments by taxing authorities. Instead, both statutes, Code 

§§ 55-79.42 and 58.1-3290, respectively, merely apply to unique

circumstances the general rule that each tax parcel must be 

assessed individually. Regarding Code § 55-79.42, at issue in 

TB Venture, it is essential to note that "condominiums are 

creatures of statute wholly unknown at common law." Orchard 

Glen East, Inc. v. Board of Supervisors, 254 Va. 307, 311, 492 

S.E.2d 150, 153 (1997). Thus, being a creature of statute, the 

General Assembly had to direct the treatment of condominium 

units for purposes of assessment by taxing authorities. It did 

so by requiring taxing authorities to assess each condominium 

unit as a separate tax parcel, like all other parcels of real 

property.

The same can be said of time-shares and cooperatives. 

Because both are creatures of statute, Code § 55-363 directs how 

to treat time-share estates for purposes of tax assessment, and 

Code § 55-428 does the same for cooperative interests. 

Specifically, Code § 55-363(B) states that "[e]ach time-share 

estate constitutes for purposes of title a separate estate or 

interest in a unit," and subsection C requires that each timeshare unit be taxed as if it were owned by a single taxpayer. 

Code § 55-363(C). Similarly, Code § 55-428(A) states that a 

cooperative interest "is real estate for all purposes" and 

subsection C commands that in certain instances, "[t]he fair 
21

market value of each such cooperative apartment unit shall be 

established by determining its fair market value for sale as an 

individual unit, determined in the same manner . . . as the fair 

market value of condominium units."

The statute at issue in West Creek states that 

[w]hen a tract or lot becomes the property of 

different owners in two or more parcels, 

subsequent to any general reassessment of real 

estate in the city or county in which such tract 

or lot is situated each of the two or more 

parcels shall be assessed and shown separately 

upon the land books, as required by law.

Code § 58.1-3290. Similarly, Code § 58.1-3285 provides:

Whenever a tract of land is subdivided into 

lots under the provisions of law and plats 

thereof are recorded, subsequent to any general 

reassessment of real estate in the city or county 

in which such real estate is situated, each lot 

in such subdivision shall be assessed and shown 

separately upon the land books, as required by 

law.

Rather than imposing a unique requirement for the assessment of 

a tract of real property that has been subdivided or has become 

the "property of different owners in two or more parcels," these 

statutes simply require that such real property be assessed like 

all other tracts of real property, as individual parcels.

As we noted in West Creek, numerous statutes require that

separate parcels of real property be assessed on an individual 

basis. Code § 58.1-3281 requires the commissioner of the 

revenue to annually "ascertain all the real estate in his county 
22

or city, . . . and the person to whom the same is chargeable 

with taxes." In addition, the commissioner "shall assess the 

value of any building and enclosure not previously assessed" and 

the "value shall be added to the value at which the land was 

previously charged." Id. Under Code § 58.1-3302, the 

commissioner of the revenue is required to "enter separately" in 

the table of town or city lots "each lot and [to] set forth 

. . . the value of the buildings on the lot [and] the value of 

the lot including buildings." Code § 58.1-3303 requires the 

clerk of each circuit court to provide the commissioner of the 

revenue with a deed recordation receipt for "all deeds for the 

partition and conveyance of land" that states, among other 

things, a description of the real property conveyed and the 

names of the grantor and grantee. Furthermore, the Attorney 

General expressed the opinion that certain statutes, Code §§ 58-

772, -772.1, -773 and -805 (now Code §§ 58.1-3285, -3290, -

3302), "provide a general legislative mandate that separate 

parcels of real property shall be separately assessed." 1974-

1975 Op. Atty. Gen. 89.

Despite opining that the highest and best use of the eight 

tax parcels is a single apartment complex, Joseph, as JWP's 

appraiser, nonetheless recognized that he had to establish the 

fair market value of each parcel when he allocated a numerical 

value to each of the eight parcels. But, the methodology used
23

by Joseph to value each tax parcel, which was in turn sanctioned 

by the circuit court, is the same methodology this Court 

rejected in TB Venture. Joseph opined that the fair market 

value of the eight parcels was $600,000 for each of the tax 

years in question. When asked how that value translated to the 

eight tax parcels, he responded that "you can simply allocate on 

a per unit basis to the various parcels and to the various 

units." During cross-examination, Joseph admitted that he took 

the $600,000 value and performed a "mathematical calculation" to 

arrive at the fair market value of each parcel. He also 

admitted that he appraised the eight parcels as a single 

apartment complex only because of the applicable restrictions

contained in the regulatory agreement.

Admittedly, TB Venture involved condominium units, not 

parcels of real property. But, as we have already explained, 

Code § 55-79.42 requires each condominium unit to be assessed as 

a separate parcel of real estate, just like all other individual 

parcels of real property. TB Venture's expert appraiser, like 

Joseph, valued numerous condominium units in bulk and placed a 

single value on all the units. He then assigned a fair market 

value to each unit by performing a mathematical calculation. TB 

Venture, 280 Va. at 561-62, 701 S.E.2d at 793. We affirmed the 

trial court's judgment granting the taxing authority's motion to 

strike TB Venture's evidence on the basis that, as a matter of 
24

law, TB Venture failed to carry its burden of establishing the 

fair market value of each unit.8 TB Venture, 280 Va. at 564-65, 

701 S.E.2d at 794-95. Interestingly, the same methodology was 

also employed and rejected in West Creek, 276 Va. at 401-02, 

417-18, 665 S.E.2d at 838-39, 847-48. In other words, TB 

Venture and West Creek are dispositive of the case before the 

Court.

As we explained in City of Covington, fair market value 

includes considerations of a parcel's unique characteristics 

such as "size and cost[,] design, style, location, [and] 

appearance." City of Covington, 205 Va. at 108-09, 135 S.E.2d 

at 223. A value that has been mathematically assigned to 

individual tax parcels from a bulk appraisal of multiple parcels

considers none of these factors. As the City correctly argued

to the circuit court, JWP's appraisal failed to account for 

differences in the eight parcels with respect to size, location, 

style, unique features like porches, and the fact that certain 

units had received recent renovations. According to Woodson, 

one of the parcels has "the original [wrought] iron porch 

columns and filigree." Thus, like TB Venture, JWP failed as a 

matter of law to carry its burden to establish the fair market 

 8 If TB Venture's methodology of valuing the condominium 

units had been an issue for the fact-finder, it would have been 

error for the trial court to strike TB Venture's evidence.
25

value of the eight tax parcels. See West Creek, 276 Va. at 417, 

665 S.E.2d at 847.

The circuit court's decision implies that a taxpayer's 

burden of proving the fair market value of each tax parcel is 

somehow vitiated by the requirement to assess real property 

according to its highest and best use. See Shoosmith Bros., 

Inc. v. County of Chesterfield, 268 Va. 241, 246, 601 S.E.2d 

641, 644 (2004) ("[I]n assessing all tangible properties for tax 

purposes such properties should be assessed at their highest and 

best use.") (internal quotation marks omitted). Because the 

Properties are subject to certain regulatory restrictions, the 

circuit court held, the highest and best use is a single

apartment complex. But, the principle that real property be 

assessed at its highest and best use does not mean real property 

should be assessed as something other than what it actually is. 

In this case, there is no dispute that the real property at 

issue is eight separate, non-contiguous parcels. Appraising the 

Properties according to their highest and best use does not 

justify treating the Properties as if they were not eight 

individual parcels.

Our decision in TB Venture makes clear that assessing 

according to a property's highest and best use is compatible 

with assessing each individual parcel even when there are 

restrictions on the property. There, the taxpayer justified its 
26

bulk assessment because the condominium units at issue could not 

be sold individually. 280 Va. at 561-62, 701 S.E.2d at 793. We 

held that this restriction did not alter either the requirement 

that the units be assessed individually or the taxpayer's burden 

to establish fair market value. Id. at 565, 701 S.E.2d at 795. 

Such "market-driven impediments to selling the units 

individually and limitations on the rental income that can be 

realized" could, however, "affect each unit's fair market 

value." Id. The same applies here. The particular 

restrictions that apply to the Properties undoubtedly affect the 

fair market value of each of the eight parcels, but they do not 

obviate JWP's burden to prove the fair market value of each 

parcel. See West Creek, 276 Va. at 417, 665 S.E.2d at 847 ("to 

satisfy the statutory requirement of showing that real property 

is assessed at more than its fair market value, a taxpayer must 

necessarily establish the property's fair market value"). That 

burden also is not affected by the circuit court's finding that 

the City committed manifest error in its assessments of the 

eight parcels. See TB Venture, 280 Va. at 563, 701 S.E.2d at 

794 (because the taxpayer has the burden of proving a tax

assessment erroneous, the taxing authority's failure to prove 

the correctness of its assessment does not impeach that 

assessment).
27

CONCLUSION

In sum, "to satisfy the statutory requirement of showing 

that real property is assessed at more than its fair market 

value, a taxpayer must necessarily establish the property's fair 

market value." West Creek, 276 Va. at 417, 665 S.E.2d at 847

(citation omitted). By appraising the eight separate, noncontiguous parcels of real property in bulk as a single

apartment complex, i.e., as one tax parcel, and then assigning a 

value to each constituent tax parcel based on a mathematical 

calculation, JWP failed as a matter of law to carry its burden 

of proving the fair market value of each parcel.

For these reasons, we will reverse the judgment of the 

circuit court and remand for entry of an order reinstating the 

City's tax assessments on the eight parcels for the tax years in 

question.

Reversed and remanded.

JUSTICE McCLANAHAN, with whom JUSTICE POWELL joins, dissenting.

I disagree that either TB Venture, LLC v. Arlington Cnty., 

280 Va. 558, 701 S.E.2d 791 (2010) or West Creek Associates, LLC 

v. County of Goochland, 276 Va. 393, 665 S.E.2d 834 (2008) is

dispositive of this case. Applying an overly simplistic 

analysis, the majority has isolated one aspect of the holdings 

in TB Venture and West Creek to formulate its own policy of 
28

appraisal methodology in Virginia.1 Furthermore, the majority 

has summarily judged the highest and best use of the parcels 

comprising Jackson Ward Apartments – a determination which 

necessarily drives methodology, but which neither TB Venture nor 

West Creek address. In short, the majority has placed its 

judicially created policy of appraisal methodology above the 

constitutional mandate requiring assessment of property at fair 

market value, and appointed itself both finder of fact and 

expert to justify its reversal of the circuit court's judgment.

The circuit court properly recognized that the 

determination of fair market value, not methodology, was the 

controlling issue for its consideration. As the circuit court 

stated, "[u]nder the constitution, we have to approach these 

assessments with the aim of determining what the fair market 

value is. We know from the experts that we have to determine 

what the highest and best use is." See Va. Const. art. X, § 2 

(All assessments of real estate and tangible personal property 

"shall be at their fair market value."); Code § 58.1-3201; 

 1 The majority concludes that "[b]y appraising the eight 

separate, non-contiguous parcels of real property in bulk as a 

single apartment complex, i.e., as one tax parcel, and then 

assigning a value to each constituent tax parcel based on a 

mathematical calculation, JWP failed as a matter of law to carry 

its burden of proving the fair market value of each parcel." 

Although it is not entirely clear what component of Joseph's 

appraisal the majority rejects, or whether the majority rejects 

his appraisal in its entirety, what is clear is that the 

majority deems the appraisal improper as a matter of law. 
29

Shoosmith Bros. v. County of Chesterfield, 268 Va. 241, 246, 601 

S.E.2d 641, 644 (2004) (in assessing fair market value, property 

should be valued at its highest and best use). Thus, as the 

circuit court correctly noted, determining the fair market value 

of the property is the overriding objective. The method by 

which the value is determined is dependent on the highest and 

best use of the property to be valued. "The Constitution does 

not prescribe that the valuation of all property for taxation 

shall be ascertained in the same way or manner. It is not even 

implied. In the nature of things, it could not be done. The 

many kinds or species of property with their diverse 

characteristics render it impossible." R. Cross, Inc. v. City 

of Newport News, 217 Va. 202, 206-07, 228 S.E.2d 113, 116 (1976) 

(internal quotation marks omitted).2

Joseph, a commercial real estate appraiser specializing in 

multifamily VDHA and low income tax properties, testified in 

detail as to how he determined the fair market value of each tax 

 2 The majority discusses at length two basic principles –

that each tax parcel must be individually assessed by the taxing 

authority and that the taxpayer must establish the fair market 

value of the property. See, e.g., West Creek, 276 Va. at 414-15 

& n.8, 665 S.E.2d at 846 & n.8 (discussing requirement that tax 

parcels be "assessed individually"); TB Venture, 280 Va. at 563-

64, 701 S.E.2d at 794 (discussing requirement that taxpayer 

establish the property's fair market value). But these 

principles are not disputed by JWP and the application of these 

principles does not compel reversal of the circuit court's 

judgment since Joseph did value each tax parcel. The majority 

simply rejects his values as a matter of law.
30

parcel. His values were based on his appraisal of the parcels 

comprising Jackson Ward Apartments according to their highest 

and best use as part of a single multifamily apartment 

community. Joseph explained that under the Uniform Standards of 

Appraisal Practice, he must consider the eight tax parcels as 

one property from a legally permissible point of view, and that 

it would have been appraisal error for him to value the Property 

as single-family homes, duplex homes, or anything other than an 

18-unit affordable multifamily rental housing community. He 

further testified his determination of value for each parcel 

using an "allocation method" was a valid technique for apartment 

communities and the same method used by the City on other 

apartment communities.

Persuaded by Joseph's opinion regarding the highest and 

best use for the parcels comprising Jackson Ward Apartments and 

his utilization of the income method appropriate for appraisal 

of apartment communities, the circuit court ruled that JWP 

proved the fair market value of each parcel. In doing so, the 

circuit court found that the City's determination of highest and 

best use ignored "the reality of the situation" in light of 

evidence, found credible by the circuit court, that the parcels 

are bound together, must legally be operated as multifamily 

affordable rental housing, and could not be sold as separate 

parcels. In fact, the evidence established that the City 
31

initially worked with RRHD to bind these parcels together for 

multifamily affordable rental housing and has continued to 

approve the operation of the parcels as an apartment community.3 

As we have previously held, "[i]n cases where the circuit court 

is presented with such conflicting testimony, we 'will defer to 

the circuit court's judgment of the weight and credibility to be 

given [the witness'] testimony.' " County of Albemarle v. 

Keswick Club, L.P., 280 Va. 381, 388, 699 S.E.2d 491, 495 (2010)

(quoting Board of Supervisors v. HCA Health Servs., 260 Va. 317,

 3 Before the parcels were acquired by JWP, the City of 

Richmond and the RRHA presented JWP with a purchase contract 

that packaged these tax parcels together for renovation and 

operation as one affordable rental housing development. The 

project resulted from an application made by the City and RRHA 

to HUD for Section 8 funds in an effort to rejuvenate 

deteriorated areas of the City and decentralize assisted housing 

in connection with the City's Neighborhood Strategies program. 

A subsequent renovation was undertaken by JWP thirteen years 

following its purchase and was also financed through VHDA. The 

renovations were endorsed by the City in a letter to the Deputy 

Director of the Department of Housing & Community Development 

stating as follows:

The construction or rehabilitation of the Jackson 

Ward Apartments and the allocation of loan and/or 

grant money from the Virginia Housing Partnership and 

federal housing tax credits available under Internal 

Revenue Code Section 42 for that development will help 

meet the housing needs and priorities outlined in the 

City of Richmond's 1993 Comprehensive Housing 

Affordability Study (CHAS).

This project meets the stated priority of 

neighborhood preservation to conserve and improve 

physical structures. This project is in census tract 

302 which the City has targeted as an area in which to 

concentrate its rehabilitation efforts.
32

332, 535 S.E.2d 163, 171 (2000)). Departing from this general 

rule, the majority judges Joseph's opinion not worthy of 

credibility and rejects his values as being the product of 

appraisal methodology it deems improper as a matter of law.

Neither the Constitution nor the Code mandates, however,

that the value of each tax parcel comprising Jackson Ward 

Apartments be determined without consideration of the other 

parcels, or that the highest and best use of the parcels be 

anything other than an apartment community.4

 That, alone, 

distinguishes TB Venture from this case. In TB Venture, we 

upheld the circuit court's determination that the taxpayer 

failed to establish the fair market value of each condominium 

unit where the taxpayer's expert valued the condominium units as 

a whole and allocated an amount to each unit based on the unit's 

pro rata share of overall income. 280 Va. at 565, 701 S.E.2d at 

795. Although the taxpayer appraised the condominium units as 

rental units, because Code § 55-79.42 requires each unit to be 

 4 Although Code § 58.1-3302, relied on by the City, requires 

the table of town or city lots to contain the name of the owner, 

the number of each lot, the value of the buildings on the lot, 

the value of the lot including buildings, and the amount of tax 

at the legal rate, this administrative record-keeping provision 

does not address the methodology to be used in determining the 

value of each lot. The majority cites several additional 

statutory provisions to reinforce its point that tax parcels 

must be individually assessed, see Code §§ 58.1-3281, -3285, -

3290, -3303 and -3309, none of which addresses appraisal 

methodology applicable in this case.
33

appraised independently from the other units, the condominium 

complex could not be appraised as an apartment community 

notwithstanding testimony that there was no market for sale of 

one condominium. This was so because the highest and best use 

of condominium units, registered as such, is mandated by 

statute. See Orchard Glen East, Inc. v. Board of Supervisors, 

254 Va. 307, 311-12, 492 S.E.2d 150, 153 (1997) (Under Code 

§ 55-79.42, upon recordation of the condominium units, a 

condominium complex may not be treated as an apartment complex 

for purposes of valuing the condominium units for tax 

assessment). Since Code § 55-79.42 does not apply to the 

parcels comprising Jackson Ward Apartments, it does not prohibit 

appraisal of the parcels as an apartment community.5

Instead of analyzing whether the evidence supports the 

circuit court's finding that JWP proved the fair market value of 

the parcels comprising Jackson Ward Apartments, as the Court did 

in West Creek, the majority singles out methodology as the 

guiding principle in valuing real property and disregards the 

significance of the property's highest and best use to that 

methodology. In West Creek, we affirmed the circuit court's 

 5 While acknowledging Code § 55-79.42 does not govern this 

case, the majority reasons that individual assessment is a 

requirement applicable to all tax parcels. Under the majority's 

reasoning, then, any methodology comparable to that used by the 

taxpayer in TB Venture is improper, as a matter of law, for all 

tax parcels. But this rationale ignores a property's highest 

and best use, which necessarily controls the methodology.
34

ruling that the taxpayer failed to prove the fair market value 

of the parcels at issue after reviewing the totality of evidence 

considered by the circuit court and the basis for its ruling.6 

In upholding the circuit court's findings, we recognized that 

"[i]t was within the province of the court, as the fact-finder, 

to determine the credibility of the witnesses." West Creek, 276 

Va. at 416, 665 S.E.2d at 847 (internal quotation marks 

omitted). Reviewing the evidence before the circuit court and 

deferring to its role as fact-finder, we could not say that the 

circuit court's findings were "plainly wrong or without evidence 

to support them." Id. at 417, 665 S.E.2d at 847. The majority, 

however, dispenses with the review it undertook in West Creek, 

 6 The circuit court ruled the taxpayer failed to prove fair 

market value of the parcels at issue for "several reasons." 

West Creek, 276 Va. at 417, 665 S.E.2d at 847. It found the 

taxpayer's expert appraiser "had not conducted an independent 

appraisal" but valued the 144 parcels at the sale price, which 

was negotiated as a bulk sale due to the large acreage. Id. 

The circuit court also noted that the method of spreading the 

value of the 2,500-acre development across the 144 parcels was 

"not persuasive" since the expert ignored the " 'economy of 

scale' " realized considering the sale price was discounted due 

to the large number of acres. In weighing the evidence before 

it, the circuit court found the testimony from the County's 

expert " 'the most compelling.' " Id. at 416, 665 S.E.2d at 

847. The circuit court was persuaded by the expert's testimony 

that the highest and best use of the Park property was sale as 

individual parcels, not as a sale of "in excess of 2,000 acres"

and that "[r]elying on [the bulk sale of the 2,500 acres] as an 

independent indicator of value for any of the 144 parcels would 

produce an appraisal report that would lack total credibility" 

and "be grounds for possible dismissal from The Appraisal 

Institute and probably revocation of one's appraisal license." 

Id. at 406, 665 S.E.2d at 841.
35

extrapolates from West Creek a finding that was affirmed because 

it was supported by the evidence, and adopts it as the 

determining principle of law in this case to rationalize its 

reversal of the circuit court's judgment.

In sum, TB Venture and West Creek do not support the 

majority's conclusion that Joseph's appraisal of the parcels 

comprising Jackson Ward Apartments was improper as a matter of 

law. Neither case purports to establish any rule of appraisal 

methodology or dictates the determination of highest and best 

use of the parcels comprising Jackson Ward Apartments. In 

removing issues involving appropriate appraisal methodology from 

the realm of expert opinion and assuming for itself the role of 

final arbiter of proper appraisal practice in Virginia, I 

believe the majority has set a dangerous precedent. More 

importantly, I believe the majority's singular focus on 

methodology jeopardizes the constitutional right to just 

valuation of property.