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### S T A T E O F M I C H I G A N

**C O U R T O F A P P E A L S**

VERONICA SMITH,

Petitioner

- Appellant, UNPUBLISHED February 15, 2018

v No. 335547

Tax Tribunal CITY OF HAMTRAMCK, LC No. 15

- 005843

- TT

Responde nt

- Appellee.

Before: M ARKEY , P.J., and M. J. K ELLY and C AMERON , JJ.

P ER C URIAM

.

Petitioner

, Veronica Smith

, appeals by right the Tax Tribunal’s f inal o pinion and j udgment which upheld the true cash value and taxable value assigned to p etitioner’s home by

r espondent, the c ity of Hamtramck, for the years 2015 and 2016. We affirm.

Petitioner’s home was one of approximately two hundred constructed in settlement of a racial discrimination lawsuit filed in 1968 against the c ity of Hamtramck. During the 1950s and 1960s, the c ity made plans to construct th e Chrysler Freeway through the c ity and to build new housing. Using federal funds, the city cleared out existing homes in three separate neighborhood s, displacing many residents; h owever, after the freeway was constructed, the new homes were never built. In 1968 a class action lawsuit was brought in f ederal d istrict c ourt against the c ity on behalf of displaced homeowners and descendants of original displaced

homeowners. The class acti on plaintiffs claimed that the city had violated the Fourteenth

A mendment in that over 70% of the displaced residents were African American. In 1971 a

settlement was reached wherein the c ity and Wayne County agreed to construct approximately

200 new homes, giving the class action plaintiffs the option of purchasing a home with a partial

subsid y from a housing fund that was established for that purpose . Petitioner exercised the

opt ion and purchased the home at issue. She paid $55,000 out of pocke t; t he remainder of the purchase price came out of the housing fund.

Petitioner’s home is a 1728 square

- foot, two

- story colonial. The b uilding p ermit was issued on March 18, 2013, to the contractor, NHS

- Hamtramck #1, LLC. The home was finished

in November 2 013. Petitioner formally purchased the home in March 2014.

In 2014 p etitioner’s home was assessed with a taxable value of $27,500 and an assessed value of $27,500. The February 2015 n otice of a ssessment listed a taxable value of $58,600 and

an asse ssed value of $58,600. Petitioner appeared before respondent’s b oard o f r eview in March- 2

- 2015, objecting that her 2015 assessment s were too high. The board of r eview reduced both the

taxable value and assessed value to $56,000. In 2016

, r espondent assessed p etitioner’s home at a taxable value of $62,468 and an assessed value of $65,300. Petitioner appeared before the bo ard of review in March 2016 to challenge the 2016 assessments, but the b oard did not change them

.

On or about August 4, 2015

, p etitio ner , acting in propria persona, filed a property tax appeal with the Tax Tribunal, challenging the true cash value and taxable value for the year 2015. Under MCL 205.737(5)(b) the t ribunal added the year 2016 to the consideration of the

appe al. 1 In her p etition, p etitioner claimed that the 2015 taxable value should have been $23,000 rather than $56,000. Petitioner pointed to the fact that since she paid $55,000 for the home , that should be the true cash value for the home in 2015, with the property being assessed for one

- half that amount, or $27,500.

On April 13, 2016, r espondent filed written value e stimates with the t ribunal. Respondent sta ted that p etitioner only paid one half of the actual cost of the new home out of pocket, with the other half coming out of the housi ng fund. Respondent noted that there are three methods for assessing taxable value: the sales approach, cost approach, and income approach. Respondent stated that the sales approach does not give accurate results in p eti tioner’s

case because most of the homes surrounding p etitioner’s home are older and had depreciated significantly . The income approach is not appropriate because p etitioner’s home is not income

producing property. The most logical method is the cost meth od, which is the preferred method for new construction. Utilizing that approach, r espondent ’s assessor noted that the cos t of the structure was $111,000 . He estimated the cost of heating/cooling, electrical, and plumbing as totaling $23,000, and added a builder’s premium of 5%. From that total of $140,700, he deducted physical, economic and neighborhood depreciation of $14,800, resulting in a value of $125,900. To that, he added the land value of $4,700, which results in a final property true cash

value of $130,600. Res pondent went on to explain that the 2014 ca lculations were not fully completed because the h ome was newly built at that time; the previous assessor had left in the spring of 2014

, and the new assessor did not arrive until later. Also, in 2015, an estimate of $56,000 was used. Respondent explained that it was not until sometime in 2015 that the home was “measured and properly priced in the assessing s ystem.”

On June 14, 2016, the t ribunal issued a p roposed opinion and judgment. The t r ibunal

held that the 2015 and 2016 assessments were properly made and upheld the assessments in their

total ity as adjusted in 2015 by the b oard of review. The tr ibunal noted that r espondent provided a cost less depreciation approach and included the calcu lations resulting in the assessment value for both 2015 and 2016 using the State Tax Manual. Petitioner filed written exceptions to the proposed o pinion and j udgment, but the t ribunal subsequently adopted it as its f inal o pinion and j udgment . Petitioner now appeal s by right.

Initially, p etitioner claims that the t ribunal clearly erred in finding that her home was

constructed over a two

- year period (2013 to 2014), instead of during calendar year 2013 alone.

1 MCL 205.737(5)(b) states that when a petition for a particular year is filed, an appeal for each subsequent year is added automatically to the petition.- 3

- Petitioner claims that this erroneously caused a doubling of the true cash value between 2014 and

2015. Petitioner is mistaken . The t ribunal’s findings of fact are final if they are supported by competent, material, and substantial evidence on the whole record. Meadowlanes, Ltd Dividend Housing Ass’ n v City of Holland , 437 Mich 473, 482; 473 NW2d 636 (1991). In this case , the

tr ibunal did not find as a matter of fact that p etitioner’s home was built over a two

- year period. Rather, the tribunal’s final o pinion and j udgment states that the t ribunal f ound that

, although the home was completed in November of 2013, it was assessed in 2014 as if it were not completed

until 2014. This was clear from r espondent’s value e stimates, where r espondent stated that the home was given an estimate of $56,000 in 201 5 because it had not yet been properly measured and placed on the assessment rolls until 2016.

Secondly, p etitioner claims that if the reason for the increase in the assessment is because of previously “omitted property,” the law requires that there be a property record card or other documentation showing that the omitted property was not previously inc luded in the assessment. Petitioner claims that here the property record cards show only that the bathrooms and a chain

link fence were omitted . These t wo items alone cannot be the basis for a doubling in the

assessment between 2014 and 2015. Petitioner consequently claims that the Tax Tribunal erred

in its finding s regarding the true cash and taxable value s for 2015 and 2016.

Our review of the Tax Tribunal ’s decisions is limited. Mt Pleasant v State Tax Comm , 477 Mich 50, 53; 729 NW2d 833 (2007). Absent fraud, this Court’s review of a Tax Tribunal decision is

limi ted to determining whether the t ribunal made an error of law or adopted a wr ong principle.

Id ., citing Const 1963, art 6, § 28. The Tax Tribunal’s findings of fact are final if they are supported by competent, material, and substantial evidence on the whole record. Meadowlanes,

Ltd

, 437 Mich at 482. The petitioner has the burd en of proof in establishing the property’s true cash value. MCL 205.737(3); Kern v Pontiac Twp, 93 Mich App 612 , 620 ; 287 NW2d 603 (1979). The assessment of real property in Michigan shall not exceed 50% of its true cash value. Mich Const 1963, art IX, § 3. “ ‘True cash value’ means the usual selling price at the place where the property to which the term is applied is at the time of the assessment, being the price that could be obtained for the property at private sale, and not at auction sale except a s otherwise provided in this section, or at forced sale. ” MCL 211.27(1). The Tax Tribunal is required to make an independent determination of true cash value. Jones & Laughlin Steel Corp v City of

Warren , 193 Mich App 348 , 353 ; 483 NW2d 416 (1992). The t ribunal is not bound to accept either of the parties’ theories of valuation. It may accept one theory and reject the other; it may reject both theories, or it may use a combination of both in arriving at its determination. Id . at
356. The Tax Tribunal may select any valuation methodology that is accurate and bears a reasonable relationship to the property’s true cash value. Safran Printing Co v Detroit, 88 Mich App 376 , 380 ; 276 NW2d 602 (1979).

Regarding additions and omitted property, MCL 211.27a (2) states in pertinent part:

[F] or taxes levied in 1995 and for each year after 1995, the taxable value of each parcel of property is the lesser of the following:

(a) The property’s taxable value in the immediately preceding year minus any losses, multip lied by the lesser of 1.05 or the inflation rate, plus all

additions.

. . .- 4

- (b) The property’s current state equalized valuation. [ Emphasis added. ]

MCL 211.34d(1)(b) provides :

For taxes levied after 1994, “ additions ” means . . . all of the following:

( i ) Omitted real property. As used in this subparagraph, “ omitted real

property ” means previously existing tangible real property not included in the

assessment. Omitted real property shall not increase taxable value as an addition unless the assessing ju risdiction has a property record card or other

documentation showing that the omitted real property was not previously

included in the assessment.

. . . [Emphasis added.]

In this case, the Tax Tribunal record contains a n April 6

, 2016

, property record card for

p etitioner’s home which states specifically for the year 2016:

Other additions:

(13) Plumbing

3 fixture bath 2400

2 fixture bath 1600

Because a property record card document s the additions, the requirements of MCL 211.34d have

been met . The Tax Tribunal recognized this and found that the two ba throoms were previously

omitted and that was the reason for the increase in the assessment from 2015 to 2016. This factual finding is supported by competent, material and substanti al evidence on the record.

Respondent used the cost approach in its deter mination of true cash value. Respondent’s

valuation was based upon actual numbers and calculated with the methodology set forth in the

State Tax Manual. In contrast, p etitioner d id not provide a valuation method. The Tax Tribunal

found r espo ndent’s methodology to be sound and in accordance with an accepted assessing

method discussed in the State Tax Manual. There was no error. The Tax Tribunal did not adopt a wrong principle or make a n error of law

. Further, the findings of the t ribunal were supported by competent, material

, and substantial evidence on the record.

We a ffirm.

/s/ Jane E. Markey /s/ Michael J. Kelly

/s/ Thomas C. Cameron